EUR/USD is gaining traction, approaching 1.1445 during the early European session on Monday. The pair maintains a bearish sentiment beneath the 100-day SMA, with the RSI consistently positioned below the midpoint. The first upside barrier emerges at 1.1470; the initial support level to watch is 1.1415. The EUR/USD pair is positioned in positive territory near 1.1445 during the early European trading hours on Monday, supported by a hawkish stance from the European Central Bank. The ECB is anticipated to maintain interest rates on Thursday; however, a second hike for the year is projected in September due to a resurgence in energy prices, which heightens the risk of intensified inflationary pressures, as reported by Reuters.
However, escalating tensions in the Middle East could boost safe-haven flows, supporting the US Dollar against the Euro. Source reported that the US has initiated the ninth night of strikes against Iran, with Washington stating that the airstrikes on Sunday were intended to “punish” Iran following the first US military fatalities since the resurgence of hostilities with the Islamic Republic commenced. The Islamic Revolutionary Guard Corps of Iran has asserted that the Strait of Hormuz will remain unsafe for the transit of petrochemical products or any oil and gas as long as the United States maintains its actions in the region.
In the daily chart, EUR/USD maintains a bearish near-term outlook as it remains below the 100-day Simple Moving Average. Price is positioned just beneath the upper Bollinger Band, suggesting that the recent rebound is encountering resistance from overhead supply, while the middle Bollinger Band provides proximate dynamic support. The Relative Strength Index (14) at approximately 48 remains beneath the neutral 50 line, indicating only limited upside momentum and supporting the notion of a constrained recovery as the pair operates below its longer-term average.
On the topside, immediate resistance is positioned at the upper Bollinger Band around 1.1470, with a more formidable barrier further up at the 100-day SMA near 1.1585, where selling interest is expected to re-emerge if tested. On the downside, initial support is observed at the middle Bollinger Band around 1.1415, followed by the lower Bollinger Band near 1.1358; a definitive breach below this lower band would pave the way for a continuation of the broader decline.