Euro Slides Ahead of Hawkish Fed Minutes

Traders' Opinions

Summary:

The Euro fell to a six-week low against the US Dollar on Wednesday as escalating US-Iran tensions boosted safe-haven demand for the greenback and kept oil prices above $100.

SELL EURUSD

EXP

TRADING

1.15950

Entry Price

1.15200

1.16650

1.15880 -0.00369 -0.32%

0.0

Pips

Flat

1.15200

Exit Price

1.15950

Entry Price

1.16650

The Euro weakened against the US Dollar on Wednesday, sliding toward fresh six-week lows near 1.1590 as investors rushed into safe-haven assets amid escalating tensions between the United States and Iran.

The renewed geopolitical uncertainty kept oil prices firmly above the $100-per-barrel mark, intensifying fears of prolonged inflationary pressure across the global economy. For the Eurozone, the surge in energy costs presents an even greater challenge given the region’s dependence on imported oil, adding pressure on growth prospects and weighing heavily on the common currency.

Fresh inflation data from the Eurozone did little to support the Euro despite confirming that price pressures accelerated in April. Final HICP inflation rose to 3% year-over-year from 2.6% in March, while German Producer Prices Index data highlighted mounting cost pressures within Europe’s industrial sector.

ECB policymaker Peter Wunsch added to the hawkish rhetoric, warning that the region is “at the beginning of an inflation problem” and suggesting the central bank may eventually need to react more aggressively if price pressures persist.

Still, markets largely ignored the inflation figures as investors focused on geopolitical risks and the strength of the US Dollar. In my view, the Euro remains vulnerable as long as oil prices stay elevated and uncertainty surrounding the Middle East conflict continues to dominate sentiment.

Attention is now turning to the Federal Reserve meeting minutes later in the day, which are expected to reinforce expectations that US interest rates could remain higher for longer — a scenario that may provide additional support for the Dollar in the near term.

Technical Analysis

From a technical perspective, EUR/USD remains entrenched in a well-defined bearish structure on the 2-hour chart after breaking decisively below multiple key support zones. Price action continues to print lower highs and lower lows, reinforcing the broader downside trend following the sharp rejection from the 1.1780–1.1790 resistance region earlier this month. That rejection triggered a sustained selloff, with bearish momentum accelerating after the pair broke beneath the major 1.1720 support area, which had previously acted as a critical consolidation base.

The pair is now consolidating near the 1.1600 psychological level after finding temporary support around the 1.1580–1.1590 region. While short-term stabilization is emerging, the overall structure remains technically weak as price continues to trade below former support zones that have now turned into resistance. The 1.1610–1.1620 area represents the first near-term resistance level, and any rebound toward this zone could attract renewed selling pressure. A sustained failure to reclaim this region would likely reinforce bearish continuation toward the next major downside target near 1.1520.

The 1.1520 support zone represents a critical technical floor and aligns with the projected bearish continuation pattern shown on the chart. A decisive break below this level would confirm further structural deterioration and expose the 1.1500 psychological handle, potentially triggering a deeper downside extension in the sessions ahead. Such a move would reinforce broader bearish sentiment and confirm that sellers remain firmly in control of the medium-term trend.

On the upside, bullish traders would need to reclaim the 1.1660 resistance level to ease immediate downside pressure. However, a more meaningful recovery would require a sustained move back above 1.1720, which now acts as a major resistance barrier following the recent breakdown. Unless buyers can recover that zone, upside moves are likely to remain corrective rather than trend reversing.

Momentum indicators continue to support the bearish outlook. Price action remains heavily skewed to the downside, while the weak recovery structure suggests limited bullish conviction near current levels. In my view, the broader trend remains vulnerable to additional losses as geopolitical tensions, elevated oil prices, and ongoing US Dollar strength continue to weigh heavily on the Euro.

TRADE RECOMMENDATION

SELL EUR/USD

ENTRY PRICE: 1.15950

STOP LOSS: 1.1665

TAKE PROFIT: 1.1520

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