The EUR/USD pair is under pressure Thursday as escalating Middle East conflict drives oil prices higher and reinforces hawkish Federal Reserve expectations, strengthening the US Dollar across the board. The currency pair is trading defensively with bears eyeing a critical break below the 1.1350 support level. Rising energy costs from geopolitical tensions are stoking inflation concerns, which could keep the Fed on an extended tightening path and maintain elevated US interest rates for longer than previously anticipated. This monetary policy divergence is providing tailwind to the greenback while weighing on the euro. Traders are closely monitoring whether 1.1350 holds, as a decisive break below this technical threshold could trigger accelerated selling and open the door to further downside for the pair. The combination of geopolitical risk, oil-driven inflation dynamics, and Fed policy expectations is creating a challenging environment for euro bulls in the near term.
FXnCO Insight
Monitor the 1.1350 level closely as a breakdown could signal extended EUR/USD weakness, while positioning for continued dollar strength amid persistent inflation and hawkish Fed rhetoric.
Source: FXStreet