Key Moments
- EUR/USD trades around 1.1445 in early European dealing on Monday, supported by a hawkish tone from the ECB.
- The pair remains constrained below the 100-day Simple Moving Average, with the Relative Strength Index (14) near 48 and under the neutral 50 mark.
- Immediate resistance is seen near 1.1470, while initial support stands around 1.1415, followed by a lower level near 1.1358.
EUR/USD Lifted by ECB Expectations
EUR/USD is trading firmer near 1.1445 in early European hours on Monday, as the single currency gains support from a more hawkish stance at the European Central Bank (ECB). According to Reuters, the ECB is anticipated to leave interest rates unchanged on Thursday, but is expected to deliver a second increase this year in September, amid renewed energy price pressures that are heightening inflation risks.
The prospect of additional tightening has underpinned the Euro, but the advance remains limited, with the pair still unable to break above its 100-day Simple Moving Average (SMA) on the daily chart.
Geopolitical Tensions Support the Dollar
Upside in EUR/USD is also being constrained by safe-haven demand for the US Dollar, as geopolitical risks in the Middle East intensify. Bloomberg reported that the US has carried out the ninth night of strikes on Iran, with Washington stating that airstrikes on Sunday were intended to “punish” Iran for the first US military fatalities since renewed hostilities with the Islamic Republic began.
Iran’s Islamic Revolutionary Guard Corps (IRGC) warned that the Strait of Hormuz will not be secure for petrochemical products or for the transit of a “single drop of oil and gas” as long as US operations in the region continue, adding to concerns over regional stability and energy flows.
Technical Picture: Recovery Still Capped
On the daily timeframe, EUR/USD continues to exhibit a bearish short-term setup, remaining below the 100-day SMA. The spot price is hovering just under the upper Bollinger Band, indicating that the latest rebound is encountering supply overhead, while the middle Bollinger Band lies close by as dynamic support.
The Relative Strength Index (14) is around 48, still beneath the neutral 50 threshold. This configuration points to only limited bullish momentum and aligns with the view that the current recovery is constrained as long as the pair stays under its longer-term average.
| Level | Indicator / Zone | Approximate Value |
|---|---|---|
| Immediate resistance | Upper Bollinger Band | 1.1470 |
| Stronger resistance | 100-day Simple Moving Average | 1.1585 |
| Initial support | Middle Bollinger Band | 1.1415 |
| Secondary support | Lower Bollinger Band | 1.1358 |
On the upside, the first technical hurdle is located around the upper Bollinger Band near 1.1470. A more substantial resistance level is seen at the 100-day SMA, around 1.1585, where selling interest is expected to intensify if that area is challenged.
On the downside, initial support comes in near the middle Bollinger Band around 1.1415. Below that, the lower Bollinger Band, close to 1.1358, represents the next key floor; a decisive move under this lower band would signal scope for an extension of the broader downtrend.
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