Summary:EUR/USD traded near 1.1440 after recovering from recent lows, supported by expectations that the European Central Bank could raise interest rates again in September. The euro's advance remains limited as escalating US-Iran tensions and oil prices above $90 increase safe-haven demand for the US dollar.
Euro: Upside bias holds above key support against US Dollar – UOB
EUR/USD Price Forecast: Edges higher to near 1.1450 but remains capped below 100-day SMA
Looking at the 4-hour chart, the pair traded as high as 1.1482 and recently started a downside correction. There was a move toward the 50% Fibonacci retracement level of the upward move from the 1.1376 swing low to the 1.1482 high.
Strong credit growth and rising energy prices may keep Fed rate hike risks alive, support the US Dollar Index, and leave EURUSD vulnerable to further losses.
EUR/USD heads into the new week at a critical technical inflection point after spending the past month holding above a major multi-year support pivot. The pair remains trapped within a well-defined July opening range, leaving traders focused on the next breakout for confirmation of the broader directional bias.
The EUR/USD forecast remains biased to the downside as geopolitical tensions in the Middle East continue to underpin demand for both crude oil and the US dollar. Although this week's softer US inflation readings briefly encouraged hopes that the Fed may not have to tightening after all, the renewed rise in oil prices has complicated that narrative and prompted investors to reassess the outlook.
Weaker-than-expected US inflation data led markets to scale back expectations of an imminent Federal Reserve rate hike. At the same time, escalating US-Iran tensions continue to sustain inflationary concerns.
Euro flattens against US Dollar while entering the weekend
Euro: Bullish bias but capped by resistance against US Dollar – UOB
Euro: Looking for direction against US Dollar – Commerzbank
EUR/USD Price Forecast: Stays pressured below mid-1.1400s after failing near 200-SMA on H4