The EUR/USD pair traded lower on Thursday, influenced by geopolitical tensions in the Middle East, a weaker Eurozone economic outlook, and a stronger US Dollar.
Key Factors:
- Geopolitical Risks: Escalating tensions between Israel and Iran increased safe-haven demand for the US Dollar.
- Eurozone Economic Outlook: President Emmanuel Macron’s speech highlighted the existential risks facing Europe and the need for increased investment and competitiveness.
- US Dollar Strength: The US Dollar gained ground as investors reduced expectations for aggressive interest rate cuts by the Federal Reserve (Fed), supported by stronger-than-expected US economic data.
Technical Analysis:
- Downtrend Continues: The EUR/USD pair is in a downtrend within a multi-year range.
- Support Levels: A break below the 50-day Simple Moving Average (SMA) at 1.1044 could confirm further weakness, with potential targets at 1.0875, 1.0777, and 1.0600.
- Momentum: The Moving Average Convergence Divergence (MACD) indicator suggests a bearish bias.
Overall Outlook:
The EUR/USD pair is likely to remain under pressure due to the combination of geopolitical risks, a weaker Eurozone economy, and a stronger US Dollar. Traders should monitor technical indicators for signs of a potential reversal.