Started the new week at 1.1520. The US dollar finished last week with gains of more than 1% following a strong US labor market report. In May 2026, the US economy added 172,000 jobs, well above the market forecast of 85,000. The data beat expectations, reinforcing confidence in the resilience of the US economy.
The strong jobs numbers reinforced expectations that the Federal Reserve will maintain its hawkish stance and could even raise interest rates before the end of the year.
Markets have little doubt that the Federal Reserve will leave rates unchanged at its next meeting. However, expectations for further policy tightening by the end of 2026 continue to rise.
The situation in the Middle East continues to support the US dollar. Negotiations between the United States and Iran have effectively stalled, while renewed tensions have kept oil prices above $90 a barrel. High energy prices are increasing inflation risks and boosting demand for the dollar as a safe-haven asset.
In this context, the euro has come under significant pressure. Energy-related risks facing European economies remain a key factor weighing on the single currency.
Technical analysis
On the H4 chart, EUR/USD is trading within a consolidation range around the 1.1525 level, which currently extends between 1.1510 and 1.1538. An upward break could trigger a corrective move towards 1.1570, while a downward break would open the way for a fall towards 1.1444.
The MACD indicator supports the bearish scenario, with its signal line below zero and pointing firmly downwards, indicating sustained bearish momentum.
On the first half chart, EUR/USD has reached the level of 1.1525 and is now consolidating around this level. Further consolidation within the range is expected, with possible extensions towards 1.1500 on the downside and 1.1570 on the upside. After that, a move lower towards 1.1444 remains the preferred scenario.
The stochastic oscillator confirms this outlook, with its signal line at 80 and falling towards 20, indicating growing bearish momentum in the near term.
Conclusion
EUR/USD remains under pressure as strong US economic data, expectations of prolonged Federal Reserve tightening and geopolitical tensions continue to support the dollar. While a short-term corrective bounce cannot be ruled out, technical indicators suggest that the broader downtrend remains intact.
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.
