FX.co ★ Wiking | EUR/USD

EUR/USD begins the new week on the defensive, sliding toward the 1.1460 region as traders rotate back into the US Dollar amid renewed geopolitical uncertainty and shifting interest-rate expectations. The pair has spent the past several sessions under persistent selling pressure, and the latest price action suggests that sellers remain firmly in control despite emerging signs that downside momentum may be approaching exhaustion. What makes the current decline particularly interesting is the clash between fundamentals. On one side, improving diplomatic progress between the United States and Iran has reduced some market anxiety and helped stabilize sentiment. On the other, uncertainty surrounding future Middle East developments and demand for defensive assets continue to favor the Dollar. At the same time, increasingly hawkish rhetoric from European Central Bank officials is preventing a complete collapse in the Euro, creating a market caught between competing narratives. Geopolitical Developments Keep the Dollar Supported The market remains highly sensitive to developments surrounding the US-Iran negotiations and the broader Middle East situation. While mediators from Qatar and Pakistan reported constructive progress during recent talks in Switzerland, traders remain cautious after previous disruptions and conflicting political signals. Concerns that tensions could re-escalate at any moment have encouraged investors to maintain exposure to safe-haven assets, providing support for the US Dollar. Currency markets are therefore treating positive diplomatic headlines with caution rather than fully embracing risk-on positioning. ECB Hawkishness Limits Euro Selling One factor preventing a more aggressive EUR/USD decline is the European Central Bank's increasingly firm tone on inflation. ECB policymaker Pierre Wunsch recently indicated that another interest-rate increase remains possible if inflation pressures continue to spread beyond energy-related sectors. Markets are already pricing additional tightening later this year, with expectations centered around September or October. These expectations have helped cushion the Euro against a stronger Dollar and explain why sellers have struggled to generate a complete breakdown despite a clearly bearish technical structure. Daily Chart Reveals Strong Seller Control The chart paints a challenging picture for Euro bulls. EUR/USD remains firmly below the 20-day moving average, the 100-day Simple Moving Average, and the Bollinger midline, confirming that the broader trend remains tilted to the downside. Since peaking earlier in the year above 1.2000, the pair has produced a sequence of lower highs and lower lows, which remains the textbook definition of a bearish market structure. Recent rebound attempts have been consistently rejected before reaching major resistance zones, showing that buyers currently lack the conviction needed to reverse the trend. Momentum Indicators Approach Exhaustion Territory Technical indicators continue to favor the bears, although some warning signs are beginning to emerge. The Relative Strength Index is trading near 34, hovering just above oversold territory. This reading confirms persistent downside momentum but also suggests that the market is becoming increasingly stretched after several weeks of weakness. The MACD remains below the zero line and continues to support the bearish outlook, while the histogram reflects ongoing negative momentum. Meanwhile, the Stochastic oscillator is already positioned near oversold territory, hinting that a short-term corrective bounce could develop if sellers begin taking profits around current levels. Critical Support Zone Faces a Major Test The immediate focus is the support region around 1.1450, which aligns closely with the lower Bollinger Band and recent swing lows visible on the daily chart. This area represents the first meaningful line of defense for buyers. A decisive daily close below 1.1450 would reinforce the bearish structure and expose fresh downside targets within the broader downtrend. Such a move could trigger additional stop-loss selling and accelerate bearish momentum as traders abandon hopes of near-term stabilization. Resistance Levels Bulls Must Reclaim For sentiment to improve meaningfully, EUR/USD must first reclaim the Bollinger midline near 1.1570. That level represents the initial barrier separating the market from a deeper recovery. Beyond it, the 100-day Simple Moving Average near 1.1665 becomes the next major resistance zone. Additional resistance appears near 1.1695, where the upper Bollinger Band converges with previous price congestion. Until buyers can regain control above these levels, rallies are likely to be viewed as temporary corrections within a broader bearish trend rather than the beginning of a sustained reversal. Conclusion EUR/USD remains under significant pressure as geopolitical uncertainty, safe-haven demand for the Dollar, and a deteriorating technical structure continue to favor sellers. Although hawkish ECB commentary is providing some support for the Euro, it has not been enough to offset the broader bearish momentum visible on the chart. With price trading below major moving averages, momentum indicators remaining negative, and support at 1.1450 coming under increasing pressure, the near-term outlook remains cautious. Unless buyers can quickly reclaim the 1.1570 resistance zone, the path of least resistance continues to point lower, with traders closely watching whether the current support region can withstand another wave of selling pressure.