EUR/USD Rejected Below 1.1800 as Investors Seek Safety in the Dollar

Traders' Opinions

Summary:

EUR/USD falls below 1.1750 as rising concerns over the fragile US-Iran ceasefire boost safe-haven demand for the Dollar, while mixed German data and expectations of strong US inflation weigh on the Euro.

SELL EURUSD

EXP

TRADING

1.17450

Entry Price

1.16850

1.17950

1.17382 -0.00018 -0.02%

0.0

Pips

Flat

1.16850

Exit Price

1.17450

Entry Price

1.17950

The Euro weakened further against the US Dollar on Tuesday, with EUR/USD slipping below the 1.1750 level after once again failing to sustain momentum above the 1.1790 resistance zone. Investors continued to favor the safe-haven Greenback as concerns mounted over the increasingly fragile US-Iran ceasefire, while mixed German economic sentiment data offered little support to the common currency.

Market sentiment deteriorated after US President Donald Trump warned that the ceasefire between Washington and Tehran was on “life support,” fueling fears that tensions in the Middle East could escalate again. Additional reports from CNN suggesting Trump is seriously considering renewed military action further boosted demand for defensive assets, helping the US Dollar strengthen broadly across currency markets.

On the European side, Germany’s latest ZEW survey painted a mixed picture of the region’s largest economy. Investor expectations improved modestly in May, with the Economic Sentiment Index rising to -10.2 from April’s -17.2 reading, beating forecasts for a deeper decline. However, the assessment of current economic conditions deteriorated further to -77.8, marking the weakest reading in five months and highlighting persistent weakness in Germany’s domestic economy.

In my view, the Euro remains vulnerable as investors increasingly question the strength of the Eurozone recovery amid rising geopolitical risks and stubbornly weak economic activity. The combination of higher energy uncertainty and soft growth conditions continues to weigh on sentiment toward the single currency.

Attention now shifts to the highly anticipated US Consumer Price Index (CPI) report later in the session. Markets expect headline inflation to accelerate to 3.7% year-on-year in April, its highest level since September 2023, while core inflation is projected to edge up to 2.7%. Another strong inflation reading would reinforce expectations that the Federal Reserve will maintain higher interest rates for longer, a scenario likely to provide additional support to the US Dollar and keep pressure on EUR/USD.

Technical Analysis

From a technical perspective, EUR/USD is beginning to show signs of bearish exhaustion after failing repeatedly to sustain momentum above the 1.1785–1.1790 resistance zone. On the 1-hour chart, the pair has broken below a short-term ascending trendline that had supported the broader recovery structure since the May 5 lows near 1.1680. The rejection from the upper resistance band, followed by the breakdown beneath trendline support around 1.1750, suggests bullish momentum is fading in the near term.

Price action now indicates that EUR/USD is attempting to establish a lower high formation after multiple failed breakout attempts near 1.1790. The pair is currently hovering around the 1.1745 support region, which previously acted as an important consolidation area during last week’s advance. A decisive break below this level would likely confirm a deeper corrective move and expose the 1.1720 zone initially, followed by the key 1.1680 support area marked by last week’s swing lows.

The broader structure also hints at the early stages of a short-term bearish reversal pattern, with the recent sequence of lower highs suggesting sellers are gradually regaining control. If downside momentum accelerates beneath 1.1740, bearish pressure could intensify quickly toward the 1.1700 psychological handle. A sustained move below that region would invalidate the recent bullish recovery structure and potentially open the door toward 1.1660.

On the upside, bulls would need to reclaim the broken trendline resistance near 1.1760 to stabilize sentiment. However, the key barrier remains the 1.1785–1.1790 supply zone, which has repeatedly capped upside attempts over recent sessions. A clean break and sustained close above that resistance cluster would invalidate the bearish outlook and shift focus back toward the 1.1820 region.

Momentum indicators are beginning to tilt bearish. The Relative Strength Index (RSI) appears to be easing back from previously elevated levels and is now drifting toward neutral territory, reflecting weakening bullish momentum rather than outright panic selling. Meanwhile, the Moving Average Convergence Divergence (MACD) is showing signs of a bearish crossover near the zero line, suggesting upside momentum continues to slow and reinforcing expectations for further near-term consolidation or downside pressure.

Overall, the technical structure favors cautious bearish continuation while EUR/USD remains below the 1.1760–1.1790 resistance zone.

TRADE RECOMMENDATION

SELL EUR/USD

ENTRY PRICE: 1.1745

STOP LOSS: 1.1795

TAKE PROFIT: 1.1685

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EUR/USD Rejected Below 1.1800 as Investors Seek Safety in the Dollar

Risk Disclosure