The euro briefly tested the 1.1500 level against the US dollar following the European Central Bank’s latest policy decision before recovering on news of a US-Iran diplomatic breakthrough, according to Brown Brothers Harriman analyst Elias Haddad. The currency pair experienced volatile intraday trading as geopolitical developments temporarily overshadowed monetary policy concerns.
Haddad now anticipates EUR/USD will gradually drift lower and find support near the 1.1400 handle in the coming sessions. The downward pressure stems from a widening growth divergence between the United States and Eurozone economies, with American economic data continuing to outpace European performance. This fundamental backdrop is expected to weigh on the single currency despite short-term geopolitical relief rallies.
Traders and foreign exchange desks should monitor upcoming US economic releases and any ECB commentary for directional catalysts. The outlook suggests continued euro weakness as long as the transatlantic growth gap persists.
FXnCO Insight
Position for euro downside toward 1.1400 while remaining alert to geopolitical headline risk that could trigger temporary counter-trend rallies.
Source: FXStreet