was trading at 1.1613 on Friday. As the week draws to a close, the US dollar remains on track to post gains, supported by ongoing uncertainty in the Middle East and continued demand for safe haven assets.
US President Donald Trump stated that negotiations aimed at resolving the conflict are approaching their final stage and that Washington has no interest in returning to a full-scale confrontation with Iran. However, Iranian Foreign Minister Abbas Araghchi noted that no significant progress has yet been made in the talks.
Adding to market concerns, the Iran-backed Hezbollah movement rejected a US-backed ceasefire proposal between Israel and Lebanon.
Investors' attention is firmly focused on today's nonfarm payrolls report. The labor market data is expected to provide new insights into the health of the U.S. economy and the likely direction of future Federal Reserve policy.
Recent jobs numbers have highlighted the resilience of the US economy, reinforcing expectations that the Federal Reserve will maintain a hawkish stance. Against a backdrop of high energy prices and inflation risks linked to the Middle East conflict, markets continue to price in the possibility of another interest rate hike before the end of the year.
Technical analysis
On the H4 chart, EUR/USD is trading within a compact consolidation range around the 1.1620 level. The current structure suggests a move lower towards 1.1525, with room for an extension to 1.1500.
The MACD indicator supports this scenario, with its signal line below zero and pointing firmly downwards, reflecting persistent bearish momentum.
On the first half chart, EUR/USD reached 1.1644 before falling to 1.1607. In fact, the pair has formed the boundaries of a consolidation range around 1.1620.
A break above the range could trigger another bullish move towards 1.1660, with room for an extension to 1.1675 before the broader downtrend towards 1.1500 resumes.
A break lower would strengthen the case for a direct move towards 1.1500, which could mark the completion of the third wave within the current downtrend.
The stochastic oscillator confirms this outlook, with its signal line falling from 80 and pointing towards 20, indicating the beginning of a short-term decline.
Conclusion
EUR/USD remains under pressure as geopolitical uncertainty and expectations of prolonged US monetary tightening continue to support the dollar. The non-farm payrolls report will be the key catalyst for the market, while technical indicators suggest that downside risks remain dominant in the near term.
By RoboForex Analysis Department
Disclaimer: Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
