The EUR/USD currency pair was another example, opening the week with a bearish gap as fears over deteriorating geopolitical conditions in Eastern Europe rose. As concerns spread about US President Donald Trump’s surprise attack on Middle East targets, the duo quickly found a receptive audience. They witnessed the first signs of interest at 1.1450. Although it had a short-lived rally that closed the gap, EUR/USD soon continued its path south. It is trading today around a new euro record low of 1.1453.
As you would expect, this decline in the EUR/USD pair coincided with momentous military actions taken by the United States over this past weekend. In reaction, the US attacked Iran’s production and research facilities at Fordow, Natanz and Isfahan. President Trump later said that these strikes “completely and totally obliterated” targets like Al–Kibar, which housed vital nuclear enrichment facilities. This increased tensions in the entire region immensely.
Foreign exchange analysts were noted that the EUR/USD as finding it difficult to remain above the neutral 100 Simple Moving Average (SMA). This SMA serves as a key predictor of support. On the other hand, a mildly bearish 20 SMA has capped the pair, adding to its woes. Overall, the current market sentiment is a neutral-to-bearish outlook for the EUR/USD in the short term. This bullish trend is most evident on the 4-hour chart.
Given the crisis that has already taken a heavy toll on civilians, even greater military escalation is an ongoing danger. Tehran’s Major General Kowsari commented on the situation, stating, “The Parliament has reached the conclusion that the Strait of Hormuz should be closed, but the final decision in this regard lies with the Supreme National Security Council.” This announcement highlights the increasing fragility of Middle Eastern geopolitics and its possible implications for global markets.
The EUR/USD is the most traded currency pair in the world. It trades a few pips above the mildly bullish 20 SMA, which is offering dynamic support near the 1.1440 mark. Support for the currency pair has been identified by analysts at 1.1425, 1.1380, and 1.1335. On the other hand, they have created alignments of resistance at 1.1530, 1.1580, and 1.1620. As traders watch these important levels looking for a breakout or a reversal, the market’s attention will arguably turn that way.
Yet things have recently turned in what would appear to be an anti-dollar development EUR/USD is rolling over. A new major collapse does not appear to be in the cards at this time. Traders on edge Traders are on edge as the effects of persistent geopolitical tensions have the potential to shake currency movements dramatically.