The EUR/USD pair trades in positive territory around 1.1445 during the early European trading hours on Monday, bolstered by a hawkish tone from the European Central Bank (ECB). The ECB is expected to hold interest rates on ThThursday butill hike for the second time this year in September as a renewed energy price surge raises the risk of more intense inflation pressures, according to Reuters.
However, escalating tensions in the Middle East could boost safe-haven flows, supporting the US Dollar (USD) against the Euro (EUR). Bloomberg reported that the US has launched the ninth night of Iran strikes, with Washington saying that airstrikes on Sunday aimed to “punish” Iran over the first US military deaths since renewed hostilities with the Islamic Republic began.
Iran‘s Islamic Revolutionary Guard Corps (IRGC) said that the Strait of Hormuz will not be safe for petrochemical products or ’single drop of oil and gas transit as long as US actions in the region continue.
Technical Analysis:
In the daily chart, EUR/USD keeps a bearish near-term tone as it holds beneath the 100-day Simple Moving Average (SMA). Price sits just under the upper Bollinger Band near, hinting that the latest bounce is running into overhead supply, while the middle Bollinger Band offers nearby dynamic support. The Relative Strength Index (14) at roughly 48 remains below the neutral 50 line, suggesting only modest upside momentum and reinforcing the idea of a capped recovery while the pair trades under its longer-term average.
On the topside, immediate resistance is located at the upper Bollinger Band around 1.1470, with a stronger barrier higher up at the 100-day SMA near 1.1585, where selling interest is likely to re-emerge if tested. On the downside, initial support is seen at the middle Bollinger Band around 1.1415, followed by the lower Bollinger Band near 1.1358; a clear break below this lower band would open the door to a continuation of the broader decline.
(The technical analysis of this story was written with the help of an AI tool. Know more.)