EUR/USD Slides Toward Key Support Amid Euro Pressure

Key Moments

EUR/USD trades around 1.1520, just above its 200-day EMA near 1.1540, while the US Dollar Index edges toward 100.00.
Conflicting reports on a 10-day pause in Iranian energy strikes weigh on optimism around Middle East tensions.
ECB President Christine Lagarde warns that damage to Gulf energy infrastructure could trigger a larger-than-expected negative energy shock.

Market Overview

EUR/USD is slightly lower around 1.1520 in Friday’s European session as modest selling persists. A stronger US Dollar and renewed concerns over Middle East tensions have pressured the pair.

The US Dollar Index (DXY), which measures the Greenback against six major currencies, is up 0.1%, trading near 100.00.

Middle East Developments Cloud Risk Sentiment

Optimism over the Middle East conflict has weakened due to contradictory statements from peace negotiators. US President Donald Trump claimed he ordered a halt to planned strikes on Iranian energy facilities at Tehran’s request.

However, the Wall Street Journal reports that mediators involved in talks rejected the idea that Iran requested a 10-day suspension of strikes.

Euro Faces Energy-Supply Headwinds

The Euro remains vulnerable as investors watch potential disruptions to energy supplies from Middle East conflicts. Damage to Gulf energy assets could have prolonged effects.

ECB President Christine Lagarde told the Economist that the energy shock may be larger than expected. She noted that the destruction of energy infrastructure could have a stronger impact on the global economy than projected.

EUR/USD Technical Landscape

EUR/USD is near 1.1520, just above the 200-day EMA at 1.1540. The pair forms lower highs below the 20-day EMA at 1.1590, signaling short-term bearish pressure within a sideways range.

The 14-day Relative Strength Index (RSI) remains in the 40–60 band, indicating selling pressure persists on rallies.

Technical Level	Type	Comment
1.1590	Resistance – 20-day EMA	Daily close above needed to ease bearish pressure
1.1690	Resistance	Next target if 1.1590 breaks
1.1810/1.1850	Resistance zone	Previous highs and recent breakdown origin
1.1500	Support	Initial downside cushion
1.1415	Support	Break confirms further downside
1.1350	Support zone	Longer-term buyers expected here

Immediate resistance is the 20-day EMA at 1.1590. A daily close above this level could pave the way for 1.1690. A stronger rebound may target 1.1810–1.1850, the site of earlier swing highs.

Support lies at 1.1500, with a pullback low at 1.1415. Breaking below 1.1415 would likely expose the 1.1350 zone, where longer-term buyers may emerge.

(This technical analysis was produced with AI assistance.)

US Dollar: Structural Drivers

The US Dollar is the official currency of the United States and circulates in several other countries. It is the most traded currency, making up over 88% of global forex turnover, or roughly $6.6 trillion daily (2022 data). After World War II, the USD replaced the British Pound as the world’s reserve currency. Until 1971, it was tied to gold; the Bretton Woods Agreement ended the gold standard.

Federal Reserve Policy and the Dollar

The Federal Reserve sets US monetary policy and manages interest rates to control inflation and support employment. When inflation exceeds the 2% target, the Fed raises rates, which typically strengthens the USD. When inflation is low or unemployment high, rate cuts often weaken the USD.

Quantitative Easing and Its Impact

In extreme situations, the Fed can expand the money supply through quantitative easing (QE) to boost credit availability. QE, used during crises like the 2008 financial crash, involves buying government bonds and generally weakens the US Dollar.