fell to 1.1598 on Wednesday, keeping the pair at its lowest level in six weeks. The US dollar is supported by the escalation of the conflict between the United States and Iran, which is increasing inflationary risks and raising expectations of a possible tightening by the Federal Reserve.
US President Donald Trump warned that Washington could resume attacks on Iran in “two or three days” if Tehran does not accept the terms of a peace deal. The ongoing conflict continues to restrict shipping through the Strait of Hormuz, driving up oil prices and adding to global inflationary pressures.
Against this backdrop, market expectations of a Fed rate cut this year have largely evaporated. Investors increasingly anticipate another rate hike before the end of 2026.
The statements of the president of the Federal Reserve Bank of Philadelphia, Anna Paulson, also attracted attention. He expressed support for maintaining current interest rates and noted that any reduction in borrowing costs would likely only be feasible with a sustained slowdown in inflation.
Technical analysis
On the H4 EUR/USD chart, the pair is trading within a consolidation range around 1.1600, with a possible drop towards 1.1550. A corrective bounce to 1.1600 is possible (testing from below), followed by a further decline towards 1.1460. The MACD indicator confirms this bearish scenario, with its signal line below zero and pointing firmly downwards, reflecting continued bearish momentum.
On the first half chart, EUR/USD has reached the level of 1.1614 and is now moving lower towards 1.1550. There could be a bounce to 1.1615 before a further decline towards 1.1460. The stochastic oscillator supports this outlook, with its signal line below 50 and pointing firmly downwards.
Conclusion
The EUR/USD pair remains under pressure amid ongoing geopolitical tensions and rising oil prices, supporting the US dollar. Technical indicators suggest that further declines are likely, although short-term corrective action is possible. Market attention will remain focused on developments between the United States and Iran and on upcoming US economic data for guidance.
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.
