Euro Falls as Stronger Dollar Pressures EUR/USD Pair

Key Moments

Dollar Strength Drives EUR/USD Lower

The EUR/USD pair came under pronounced selling pressure during the Asian session on Thursday, giving back gains accumulated over the prior two days. After briefly touching a weekly high the previous day, the pair reversed lower, with spot prices falling beneath the 1.1550 handle in the latest trading as investors rotated into the safe-haven US Dollar (USD).

The shift toward the USD followed US President Donald Trump’s update on the Iran war, which undermined expectations of a near-term easing in tensions and encouraged defensive positioning in the greenback.

Trump Comments Lift Oil, Inflation Concerns, and Fed Hike Bets

In a televised address, Trump warned that Iran could face severe consequences in the coming weeks absent a negotiated solution. He stated that Iran would be hit extremely hard over the next two to three weeks and would be brought to the Stone Age if no deal is reached. Trump further added that Iranian energy infrastructure remains a possible target. These remarks drove a sharp move higher in Crude Oil prices and stoked worries about inflation.

Rising inflation concerns, in turn, reinforced expectations that the US Federal Reserve (Fed) could opt for an interest rate hike, providing an additional tailwind for the USD. The firmer dollar backdrop exerted further downward pressure on EUR/USD, amplifying the bearish tone.

Technical Picture: Bias Remains Negative

From a technical standpoint, the pair’s inability to sustain a move above the 200-period Exponential Moving Average (EMA) on the 4-hour chart, coupled with rejection from the 1.1620-1.1625 supply region, continues to favor sellers. This area has emerged as a key overhead barrier, and the latest pullback reinforces a negative near-term outlook.

Momentum indicators echo the weakening bullish narrative. The Moving Average Convergence Divergence (MACD) has rolled back toward the zero line after only a brief positive extension, with the histogram narrowing and signaling diminishing upside momentum. At the same time, the Relative Strength Index (RSI) has eased to around the 50 level, highlighting a loss of directional conviction after failing to hold near overbought territory earlier in the move.

Key Levels for EUR/USD

On the downside, initial support is seen around 1.1520. This level protects the recent reaction low near 1.1485, a break of which would open the door toward the 1.1450 region as the next target for sellers.

On the upside, immediate resistance is located near 1.1580, followed by a more important barrier in the 1.1610-1.1620 band. In this area, prior swing highs align with the 200-period EMA on the 4-hour chart, creating a significant technical cap. A sustained break above this upper resistance zone would be required to reestablish a clearer bullish bias, while a failure to hold 1.1520 would likely refocus attention on the mid-1.1400s.

(The technical analysis of this story was written with the help of an AI tool.)

US Dollar Performance Against Major Currencies

The table below summarizes the percentage change of the US Dollar against a basket of major currencies today. According to this snapshot, the USD showed its strongest performance versus the New Zealand Dollar.