FX.co ★ EUR/USD

Technical and Fundamental Analysis of the EUR/USD Pair The euro lost ground against the U.S. dollar during Friday’s North American trading session, with EUR/USD retreating toward the 1.1600 threshold as improving risk sentiment surrounding potential diplomatic progress between the United States and Iran boosted demand for the greenback. The pair was last seen trading around 1.1598, placing it on course for a weekly decline as investors favored the U.S. currency amid evolving geopolitical developments and shifting interest-rate expectations. Nevertheless, uncertainty remains elevated as key issues, including Iran’s nuclear activities, sanctions relief, and the future administration of the Strait of Hormuz, have yet to be fully resolved. While diplomatic channels remain active and regional mediators continue to facilitate discussions, traders remain cautious about pricing in a definitive resolution before concrete details emerge. The U.S. dollar also benefited from a recovery in energy markets after crude oil prices rebounded from earlier losses. Higher oil prices have revived concerns that inflation could remain sticky across major economies, reinforcing expectations that central banks may need to maintain restrictive monetary policies for longer. This backdrop has supported U.S. Treasury yields and helped the dollar regain momentum after a period of consolidation. Across the Eurozone, officials remain focused on the inflationary impact of elevated energy costs. European Central Bank President Christine Lagarde stated that medium-term inflation projections continue to align closely with the ECB’s target despite geopolitical disruptions affecting energy markets. Meanwhile, ECB policymaker Madis Müller argued that recent developments strengthen the case for further monetary tightening if inflationary pressures continue to broaden throughout the region. Germany’s latest economic figures offered a mixed outlook for the Eurozone’s largest economy. EUR/USD continues to trade within a consolidation range while maintaining a slightly bearish short-term profile on both the H4 and H1 charts. On the H4 timeframe, a significant demand zone is positioned between 1.1570 and 1.1590, an area that has repeatedly attracted buying interest during recent pullbacks. This support region coincides with previous consolidation levels and sits close to the H4 50-period Simple Moving Average (SMA), increasing its relevance as a defensive zone for buyers. To the upside, a notable resistance and supply region is located between 1.1630 and 1.1660, where previous advances have encountered heavy selling pressure. This zone contains multiple rejection points and liquidity concentrations that continue to restrict bullish attempts. The H4 20-period SMA, currently positioned around 1.1605–1.1610, serves as dynamic resistance and remains a key hurdle for buyers. Meanwhile, the 50 SMA near 1.1580–1.1590 continues to provide underlying support. A sustained breakout above both moving averages would improve the technical outlook, while repeated rejection beneath the 20 SMA would preserve the existing bearish bias. On the H1 timeframe, intraday price action provides a more detailed view of market structure. Immediate support is concentrated around 1.1585–1.1595, where recent buying activity has consistently absorbed downside pressure. Overhead resistance remains visible in the 1.1625–1.1640 range, closely matching the broader H4 supply zone. The H1 20-period SMA acts as the primary short-term directional guide; continued trading below this indicator favors sellers, whereas a move above both the 20 SMA and 50 SMA would suggest strengthening bullish momentum. Key technical levels remain critical for traders monitoring the pair. Initial support is located near 1.1590, followed by the stronger 1.1570–1.1580 demand region. A decisive breakdown beneath this area could expose further downside toward 1.1540–1.1550. On the upside, resistance begins at 1.1625–1.1640, with a more significant barrier positioned near 1.1660. A convincing break above this zone would likely attract fresh buying interest and shift focus toward the 1.1700–1.1720 region.