rose to 1.1667 on Thursday. The US dollar partially recovered its losses from the previous session as market sentiment remains cautious amid a fragile truce between the US and Iran.
The situation around the Strait of Hormuz remains tense. According to Iranian media, the passage of oil tankers remains restricted after new attacks in the region. Iranian representatives have reported violations of several conditions of the ceasefire.
The dollar fell sharply the previous day following the announcement of a two-week truce, sending oil prices tumbling and temporarily easing inflation fears.
An additional factor was the publication of the minutes of the Federal Reserve meeting. Some participants acknowledged the possibility of raising rates to contain inflation, although many still anticipate further policy easing.
Investors' attention is now focused on macroeconomic data, including consumer spending reports, the PCE index and the upcoming CPI release, which will provide more information on inflation. All of this could determine the direction of the markets in the short term.
Technical analysis
On the EUR/USD H4 chart, the market is forming a consolidation range around 1.1683. A bearish wave is expected, with a continuation to 1.1606 as a local target. Subsequently, a bullish movement is anticipated back to 1.1683. Technically, this scenario is confirmed by the MACD indicator, with its signal line above zero but pointing firmly downward, reflecting continued bearish momentum and the possibility of the downtrend persisting.
According to the H1 chart, the market is forming the structure of the next downward wave to the level of 1.1616. After reaching this level, a rise to 1.1666 is expected, followed by a further decline to 1.1494. Technically, this scenario is confirmed by the stochastic oscillator, with its signal line below 50 and pointing firmly towards 20.
Conclusion
EUR/USD remains ahead, although the dollar has managed to regain some ground as the truce between the United States and Iran shows signs of strain. Reports of continued restrictions on oil tanker movements through the Strait of Hormuz and alleged ceasefire violations have reintroduced caution into the markets. The Federal Reserve minutes revealed a divided committee, with some members open to rate hikes while others lean toward eventual easing, adding to uncertainty. With key US inflation and consumption data on the horizon, the direction of the pair remains uncertain. Technically, a short-term decline appears likely, but the broader trend will depend on whether the fragile truce holds or geopolitical tensions reignite.
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.
