EUR/USD Slips Toward 1.1500 on Dollar Strength

Key Moments

EUR/USD Under Pressure Around 1.1500

EUR/USD is trading in negative territory around 1.1500 during the early European session on Friday, with the pair maintaining a bearish tone in the near term. Price action remains capped beneath the 100-day simple moving average, which continues to limit attempts to extend gains.

The Euro is softening against the US Dollar as risk-sensitive assets come under pressure amid mounting tensions in the Middle East. Market sentiment remains fragile as geopolitical headlines dominate the backdrop.

Geopolitical Tensions Dampen Risk Appetite

According to comments cited from the Guardian, Iranian Parliament Speaker Mohammad Bagher Ghalibaf stated on Thursday that the United States will “pay the price for killing Iranian civilians.” Also on Thursday, the Islamic Revolutionary Guard Corps (IRGC) indicated that it had targeted US bases in Kuwait, Jordan and Bahrain following US strikes on a building on Iran’s Qeshm Island.

The Iranian military further stated that the Strait of Hormuz would remain closed and that the “aggressor will be punished.” These developments are contributing to a risk-off environment, supporting the US Dollar at the expense of the Euro.

Eurozone Data and ECB Expectations

Recent upside surprises in Gross Domestic Product figures from both the Eurozone and Germany have bolstered expectations that the European Central Bank could deliver a second interest rate increase this year, with September seen as a possible window. This improved macro backdrop may help limit downside pressure on the common currency in the near term.

Brown Brothers Harriman’s Elias Haddad highlights that the latest improvements in Eurozone data are reinforcing the case for additional tightening. He notes that “the recovery in Eurozone economic activity and above target inflation reinforces the case for the ECB to resume raising rates in September,” suggesting that robust growth dynamics combined with persistent inflation continue to underpin expectations for another rate move following the current pause.

Technical Picture: Bearish Bias Persists Below 100-day SMA

From a technical standpoint, the daily chart shows EUR/USD constrained below the 100-day simple moving average while testing the upper Bollinger Band, pointing to supply emerging on rallies. The mid-Bollinger Band is acting as underlying structural support, while the Relative Strength Index around 59 signals improving momentum that has not yet shifted into overbought territory, within what remains a generally limited trading environment.

On the topside, the first hurdle is positioned near the upper Bollinger Band around 1.1510. Above that, the 100-day simple moving average near 1.1570 is viewed as a key level that buyers would need to reclaim to ease the broader bearish bias.

On the downside, initial support is located at the mid-Bollinger Band around 1.1425. A deeper pullback toward the lower Bollinger Band near 1.1340 would likely intensify selling pressure, potentially reopening the path toward lower lows if that area fails to hold.