EUR/USD hit a one-week high on Wednesday, although its gains were held just below the 1.1600 round figure.
The market is currently in a transitional phase, trying to balance optimism over the end of the Iran war with the lingering risk of energy inflation in the Eurozone.
✅ Fundamental Background: Optimism vs. Geopolitical Reality
Current market-driving sentiments are contradictory:
- ⚡Bullish Factors (Euro): President Donald Trump's statement regarding the potential end of military operations in Iran in 2-3 weeks has weakened the safe-haven US dollar, giving the euro some breathing room.
- ⚡Bearish Factors (Dollar): Reports that the UAE is pushing for military action to open the Strait of Hormuz have kept oil prices high. This has fueled inflation concerns, forcing the Fed to remain hawkish, which automatically limits EUR/USD appreciation.
- ⚡Data Focus: Investors now await the release of ADP, ISM Manufacturing, and US Retail Sales data tonight for clues on the direction of future monetary policy.
✅ Key Levels to Watch
- ⚡Key Upside Target (1.1641): The most recent swing high. A breakout of this level would confirm a broader recovery.
- ⚡Resistance (~1.1600): The immediate obstacle. A sustained candle close above this level is required before placing any new bullish bets.
- ⚡Key Demand Zone (1.1520): This is a critical support area; as long as it holds, the short-term uptrend remains intact.
- ⚡Last Support (1.1492): A break below this level would invalidate this week's recovery scenario.
The market is currently in a transitional phase, trying to balance optimism over the end of the Iran war with the lingering risk of energy inflation in the Eurozone.
✅ Fundamental Background: Optimism vs. Geopolitical Reality
Current market-driving sentiments are contradictory:
- ⚡Bullish Factors (Euro): President Donald Trump's statement regarding the potential end of military operations in Iran in 2-3 weeks has weakened the safe-haven US dollar, giving the euro some breathing room.
- ⚡Bearish Factors (Dollar): Reports that the UAE is pushing for military action to open the Strait of Hormuz have kept oil prices high. This has fueled inflation concerns, forcing the Fed to remain hawkish, which automatically limits EUR/USD appreciation.
- ⚡Data Focus: Investors now await the release of ADP, ISM Manufacturing, and US Retail Sales data tonight for clues on the direction of future monetary policy.
✅ Key Levels to Watch
- ⚡Key Upside Target (1.1641): The most recent swing high. A breakout of this level would confirm a broader recovery.
- ⚡Resistance (~1.1600): The immediate obstacle. A sustained candle close above this level is required before placing any new bullish bets.
- ⚡Key Demand Zone (1.1520): This is a critical support area; as long as it holds, the short-term uptrend remains intact.
- ⚡Last Support (1.1492): A break below this level would invalidate this week's recovery scenario.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.