The EUR/USD is likely to open the week with a gap higher after US president Donald Trump announced over the weekend that a peace agreement between the United States and Iran has been “largely negotiated”.
EUR/USD's extended decline suggests that corrective rebound from 1.1408 has completed at 1.1848. But as a temporary low was formed at 1.1575, initial bias remains neutral this week first.
Euro slips as Iran deal doubts lift demand for the US Dollar
The Euro managed to push below 1.1600 as US Bond yields rose. The market has started testing of support zone at 1.1530-80 since yesterday.
In what had been another choppy week dominated by contradictory geopolitical headlines surrounding the US-Iran conflict, stock markets have largely taken the more optimistic route, even though crude oil refuses to give back its large geopolitical risk premium built in. Wall Street trades near record highs thanks to a select handful of tech names doing all the heavy lifting, while Europe has been more measured.
Euro: Conflict risks keep pressure against US Dollar – Commerzbank
The trading week is almost over and, for now, one of the most relevant factors is the indecision that has developed around EUR/USD in recent sessions. The pair has barely moved, posting a variation of around 0.2% over the last three sessions, reflecting a lack of clear short-term direction.
Euro pressured by stronger US Dollar amid uncertainty over US-Iran negotiations
The Euro to Dollar (EUR/USD) exchange rate came under fresh pressure after disappointing Eurozone business activity data reinforced concerns over the region's economic outlook and prompted investors to reassess expectations for further European Central Bank tightening. At the time of writing, EUR/USD traded at 1.15854, down 0.34% on.
The EUR/USD gave back its entire gains from yesterday, even if European equity markets maintained much of those moves. Renewed optimism around a potential US-Iran agreement, which was met with far more scepticism than earlier this month, faded.
Euro: Growth worries cap upside against US Dollar – Rabobank
Euro: Pressured versus US Dollar with ECB repricing – Societe Generale