EUR/USD Near Six-Week Low as Market Tensions Rise

EUR/USD slipped to 1.1598 on Wednesday, keeping the pair at its lowest level in six weeks. The US dollar is supported by the escalating conflict between the US and Iran, which is increasing inflationary risks and raising expectations of potential Federal Reserve tightening.

US President Donald Trump warned that Washington could resume attacks on Iran within “two to three days” if Tehran does not accept the terms of a peace agreement. The ongoing conflict continues to restrict navigation through the Strait of Hormuz, pushing oil prices higher and increasing global inflationary pressures.

Amid this backdrop, market expectations of a Fed rate cut this year have largely evaporated. Investors are increasingly anticipating another rate hike before the end of 2026.

Attention was also drawn to comments from the President of the Federal Reserve Bank of Philadelphia, Anna Paulson. She 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 potential downside towards 1.1550. A corrective rebound to 1.1600 (testing from below) is possible, 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 downside momentum.

On the H1 chart, EUR/USD has reached 1.1614 and is now moving lower towards 1.1550. A rebound to 1.1615 may follow 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 further downside is likely, although short-term corrective moves are possible. Market focus will remain on US-Iran developments and upcoming US economic data for guidance.

By RoboForex Analytical Department

Disclaimer:

Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.