EURUSD maintains its downward trend as the conflict between the US and Iran continues; Attention remains on ongoing diplomatic talks
Market Fundamentals Overview
US Dollar (USD)
The US dollar continues to find broad support, driven by ongoing tensions between the US and Iran as well as persistently high oil prices. However, the greenback is experiencing a slight pullback today following a WSJ report suggesting that Trump may be willing to end the conflict without insisting on reopening the Strait of Hormuz. Such a development would likely be welcomed by financial markets, as Iranian authorities are expected to reopen the strait once US troops withdraw.
Despite these reports, no official announcement has been made by Trump—so far, only speculation and rhetoric have emerged, seemingly aimed at influencing market sentiment. The current environment is marked by heightened volatility: US equities are hitting fresh lows, Treasury yields are elevated, oil prices remain above $100 per barrel, and the Federal Reserve maintains a cautious stance.
For now, the dollar’s momentum favors further gains, but traders remain alert to breaking news—especially updates from Trump’s Truth Social account, which has the potential to trigger significant market reactions.
Market participants are not anticipating any changes to interest rates this year, with only a minimal 3 basis points of easing priced in by year-end.
Euro (EUR)
Recent economic data for the eurozone has largely confirmed expectations: headline inflation is rising while economic activity is slowing. The European Central Bank (ECB) continues to emphasize a vigilant, data-driven approach, making decisions on a meeting-by-meeting basis. Policymakers maintain a bias toward tightening, contingent on the duration of the ongoing conflict.
Currently, markets are assigning a 58% probability to a rate hike at the next ECB meeting, and an 87% likelihood of a move in June. By year’s end, roughly three rate increases are anticipated.
While the ECB is expected to look past the recent inflation surge at its April meeting, it may set the stage for a potential rate hike in June if the US-Iran conflict persists. However, if the war concludes in the coming weeks, these expectations could shift rapidly.
EURUSD Technical Analysis – Daily Chart
On the daily timeframe, EURUSD has failed to hold above the trendline and has once again dropped below the 1.15 level. The next key support is near 1.1392, where buyers may look to enter, placing stops just below this area in hopes of a rebound toward 1.16. Conversely, sellers will be watching for a decisive move lower to reinforce bearish positions and target new lows.
EURUSD Technical Analysis – 4-Hour Chart
The 4-hour chart highlights a downward trendline that continues to define the prevailing bearish sentiment. Sellers are likely to use this trendline as a reference point, maintaining stops above it while seeking further downside. Buyers, meanwhile, are waiting for a breakout above the trendline to initiate a potential recovery toward the major resistance around 1.1550.
EURUSD Technical Analysis – 1-Hour Chart
On the 1-hour timeframe, the technical outlook remains largely unchanged. Sellers are expected to defend the trendline, while buyers are watching for a breakout. The red lines on the chart indicate the average daily range for the current session.
Key Upcoming Events
- Today: US Consumer Confidence and Job Openings data
- Tomorrow: US ADP Employment, Retail Sales, and ISM Manufacturing PMI
- Thursday: US Jobless Claims
- Friday: US Non-Farm Payrolls (NFP) report
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Goldman Sachs Global Stock Market Outlook: AI Capital Expenditure to Peak Next Year, Earnings Growth to "Slow Down Significantly", Cloud Giants Become "Defensive Assets"
Goldman Sachs’ 2027 Global Equity Strategy points out that the AI capital expenditure boom is nearing its peak, and global profit growth will slow significantly. S&P 500 earnings growth is expected to drop from 36% to 11%, with depreciation pressures gradually emerging. However, cloud giants’ valuations have adjusted to a forward P/E of 19.7, lower than the staples sector, and are classified as “relatively defensive” assets. Goldman Sachs predicts an S&P 500 target of 8,700 points and suggests overweighting the US and Japan, while underweighting Europe.
With $135 billion worth of Nvidia stock, will Jensen Huang cash out?
After Jensen Huang stepped down, his Nvidia holdings of approximately 812 million shares, valued at $135 billion, became a major pressure on the stock price. Any reduction in holdings is subject to both legal and market constraints: shares can only be sold compliantly after the disclosure of any undisclosed negative information, and the volume is equivalent to six trading days’ total market transactions, meaning large-scale cashouts would have to be spread over several months.
Will the traditional Christmas rally still happen in the US stock market this year?
After a simultaneous technical and position-based recovery in the US stock market, Goldman Sachs, Morgan Stanley, and JPMorgan have successively signaled a year-end rebound. Extremely light positions, mean reversion of valuations, and seasonal support together create conditions for a short squeeze. However, global manufacturing import price inflation has annualized at around 24%, surpassing the pandemic peak, and the inflation bill will come due intensively in the first quarter of next year. Goldman Sachs warns that once the year-end rally materializes, it may exhaust future upside potential.
Anthropic IPO Roadshow: CEO Says "Doesn't Care About Market Conditions", Hopes to "Underpromise and Overdeliver"
As Anthropic gears up for its IPO, CEO Amodei remains deliberately low-key during the roadshow, emphasizing "under-promise and over-deliver," and appears calm regarding market volatility at the time of listing. In response to fluctuations in the AI sector and the Nvidia situation, Amodei stated he is not particularly concerned about the specific month of listing or market conditions, and frankly admits that allocation of computing power is "the most fundamental business challenge."
Crypto prices
More
