has steadily declined, falling to 1.1688 on Thursday. The US dollar has hit ten-day highs again amid lack of progress in US-Iran peace talks, boosting demand for the currency as a safe haven asset.
The Strait of Hormuz remains effectively closed. Tehran continues to control this strategically vital waterway, with reports indicating it previously seized two vessels in the area. At the same time, the US blockade of Iranian ports persists, contributing to rising energy prices and increasing the risk of inflation.
Meanwhile, US President Donald Trump stated that the current truce will remain in effect indefinitely, while Washington awaits a new peace proposal from Iran.
Investors remain concerned about US inflation, reinforcing expectations that the Federal Reserve will keep interest rates unchanged for the rest of the year. Previously, Federal Reserve nominee Kevin Warsh emphasized the importance of maintaining the independence of the White House central bank.
Market attention now turns to weekly jobless claims and PMI data, which should provide more insight into the outlook for the US economy.
Technical analysis
On the H4 chart, EUR/USD is trading within a consolidation range around 1.1736, which currently extends to 1.1693. The pair is likely to decline towards 1.1680. The MACD indicator supports this scenario, with its signal line below zero and pointing firmly downwards, indicating sustained bearish momentum.
On the H1 chart, EUR/USD is developing a downward movement towards 1.1680. There could be a corrective bounce to 1.1711, before a further decline towards 1.1620. The stochastic oscillator confirms this view, with its signal line below 20 and pointing firmly downwards, suggesting continued short-term bearish pressure.
Conclusion
EUR/USD has fallen for the third consecutive session amid geopolitical tensions and a stronger dollar. The lack of progress in US-Iran peace talks, combined with Tehran's control over the Strait of Hormuz and the ongoing US blockade of Iranian ports, has kept high energy prices and inflation risks in the spotlight. Trump's indication that the truce will continue indefinitely, pending a new proposal from Iran, offers little immediate relief. With markets not pricing in any Fed rate cuts this year and key US data approaching, the euro remains under pressure. Technical signals suggest a further decline towards 1.1680 and potentially 1.1620 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.
