fell to 1.1919 on Friday. Despite this move, the week ends with the US dollar experiencing its second consecutive decline.
The pressure on the dollar is driven by rising geopolitical tensions and uncertainty over economic policy in Washington, which is reducing investor confidence in the dollar.
The focus is on recent statements by US President Donald Trump. He threatened to impose tariffs on countries that supply oil to Cuba and also warned Iran of possible military attacks if it refused to sign a nuclear deal. An additional source of uncertainty was Trump's promise to announce the nomination of a new Federal Reserve chair on Friday morning, following sustained pressure on Jerome Powell to cut rates more aggressively.
In parallel, the White House and Senate Democrats reached a preliminary agreement that avoids a government shutdown. This partially reduced short-term fiscal risks.
Earlier in the week, the dollar fell to levels not seen in nearly four years after Trump expressed no concern about its weakening. The US currency was subsequently supported by statements from US Treasury Secretary Scott Bessent, who remains committed to a strong dollar policy.
Technical analysis
On the H4 chart, EUR/USD has formed a wave of growth towards 1.2080. A repeated break of this resistance level may indicate a continuation of the uptrend. At this moment the pair continues the correction wave towards the support level 1.1875. Technically, the correction scenario is confirmed by the MACD indicator, with its histogram and signal line above zero, forming a descending wave. Once the correction is complete, we anticipate that the uptrend will continue towards 1.2045 and subsequently to 1.2200, with possible corrections along the way.
On the H1 chart, the pair is forming a correction after testing the resistance level. A bounce from the 1.1860 support level would signal the formation of a new wave of growth. The signal lines of the stochastic oscillator are pointing towards the 80 level, suggesting that the uptrend may continue. Subsequently, the growth target can be 1.2045.
Conclusion
In summary, while the EUR/USD pair has seen a corrective pullback, the fundamental context of geopolitical tensions and political uncertainty continues to weigh on the US dollar, underpinning the relative strength of the euro. Technically, the correction appears to be nearing completion near key support levels, with indicators on the fourth and first half time frames suggesting a high probability of resuming the prevailing uptrend. The general bias remains bullish with a possible test of areas of greater resistance.
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.
