The EUR/USD pair has experienced a decline, approaching the 1.1465 level during the early European session on Monday. The pair maintains a bearish sentiment, with downside pressure dominating as the RSI remains below the midline. The initial downside target to monitor is 1.1450, while the immediate resistance level is identified at 1.1570. The EUR/USD pair experiences a decline, trading at approximately 1.1465 in the early European session on Monday. The uncertainty surrounding the US-Iran peace deal, following threats from President Donald Trump to restart the war in the Middle East, weighs on riskier assets such as the Euro against the US Dollar.
On Monday, Qatar and Pakistan released a joint statement regarding the conclusion of negotiations between the US and Iran in Bürgenstock, Switzerland, noting that the discussions were held in a positive and constructive atmosphere. Meanwhile, the mediation efforts by Pakistan and Qatar have resulted in notable advancements towards resolving the Lebanon conflict. It is reported that oil and petrochemical exports are exempted, the blockade has been lifted, certain frozen assets have been released, and a substantial reconstruction and development plan has been launched for Iran. Conversely, hawkish statements from officials at the European Central Bank could serve to mitigate the declines of the USD. On Friday, ECB policymaker and the head of Belgium’s central bank, Pierre Wunsch, indicated that the central bank might consider an additional interest rate hike as early as next month, contingent upon further indications of Eurozone inflation extending beyond the energy sector.
The ECB’s deposit rate is presently at 2.25%, with financial markets anticipating further increases of 25 basis points in either September or October, potentially succeeded by an additional hike in the early months of the following year. In the daily chart, EUR/USD maintains a distinct bearish bias as the spot remains significantly below the 100-day simple moving average and the Bollinger middle band. Price is nearing the lower Bollinger band support while the Relative Strength Index at about 34 drifts towards oversold territory, which suggests persistent downside pressure but also warns that selling momentum could start to fatigue near current levels.
On the downside, the immediate cushion emerges at the lower Bollinger band near 1.1450; a sustained break under this level would open the door toward fresh lows in the broader downtrend. On the topside, initial resistance is seen at the Bollinger middle band around 1.1570, followed by the 100-day SMA at 1.1665 and the upper Bollinger band near 1.1695, with the pair needing to reclaim at least the mid-band to ease the prevailing bearish tone.