EUR/USD Holds Tight as US‑Iran Talks, NFP Awaited

Key Moments

Fundamental Overview

US Dollar: Rangebound Amid Policy and Geopolitical Uncertainty

The US dollar continues to fluctuate within a contained range, with recent volatility tied in part to uncertainty surrounding tariffs after the US Supreme Court ruled against earlier levies. Despite that ruling, tariffs remain in place as Trump reinstated them under different legal provisions, leaving the broader policy backdrop largely unchanged.

Price action in the greenback remains mostly sideways as market participants wait for clearer drivers before taking stronger directional positions. Two key risks stand out: a possible military escalation between the US and Iran that could trigger a severe risk-off environment supportive of the dollar, and a potential shift toward a more hawkish stance if upcoming US data surprises to the upside.

Fed’s Waller has emphasized the importance of next week’s NFP report, reinforcing the idea that labor market data could play a decisive role in shaping expectations for US monetary policy and, by extension, the dollar’s trajectory.

Euro: Steady Policy Stance and Focus on Inflation

For the euro, the broader narrative remains unchanged. The ECB left interest rates unchanged at its most recent meeting, in line with expectations, and maintained its data-dependent, meeting-by-meeting guidance. Policymakers have moderated their comments on the euro following the currency’s decline below the 1.20 mark against the US dollar.

The ECB’s attention remains squarely on inflation dynamics. The central bank has reiterated that it will not react to minor or short-lived deviations from its 2% inflation objective. Recent data have been supportive, with economic activity improving and core inflation staying slightly above the target level.

EUR/USD Technical Picture – Multi-Timeframe View

Daily Chart: Consolidation Around 1.18

On the daily timeframe, EUR/USD is consolidating near the 1.18 area as traders wait for new information to determine the next trend leg. From a risk-reward standpoint, sellers may see more attractive opportunities closer to the 1.1927 region, where they could position for a potential move toward the 1.16 handle.

Conversely, buyers are likely to look for a decisive break above 1.1927, which would signal scope for a continuation higher and open the way for a push into new cycle highs.

4-Hour Chart: Defined Range Between Support and Resistance

The 4-hour chart makes the current rangebound structure more apparent, with price oscillating between well-defined support and resistance zones. Buyers are expected to become more active near the 1.1807 support level, using a clearly defined downside risk just below that zone while targeting an extension of the move toward the 1.1850 resistance.

Sellers, in contrast, are likely to wait for a clear break beneath 1.1807, which could invite additional short positions aiming for a decline toward the 1.1750 support area.

1-Hour Chart: Short-Term Range Tactics

On the 1-hour timeframe, the trading plan remains straightforward. Buyers are inclined to look for rebounds from nearby support, while sellers are focused on potential breakdowns below those same levels. The red lines on this chart mark the average daily range for today, framing intraday expectations for volatility and price swings.

Key Technical Levels

Upcoming Data and Event Risks

In the immediate term, attention is centered on the third round of US-Iran nuclear discussions and the latest US Jobless Claims figures scheduled for today. These events could influence risk sentiment and, in turn, the US dollar and EUR/USD.

Tomorrow’s calendar features German CPI releases and US PPI data, which may further shape expectations for inflation trends and central bank policy paths on both sides of the Atlantic.