Euro Slides to 1.1475 as Geopolitical Risks Outweigh ECB Hopes
EUR/USD drops to 1.1475 amid Russian threat warnings and Fed hike expectations. Traders await Lagarde's speech for clarity.
Key points
- EUR/USD trades near 1.1475, down from the mid-1.1400s low.
- Russian threat warnings and Middle East attacks support USD safe-haven demand.
- Fed rate hike expectations outweigh ECB tightening bets, pressuring the Euro.
EUR/USD trades near 1.1475, extending losses from the mid-1.1400s. The pair failed to hold Friday's modest bounce, signaling continued weakness.
Geopolitical risks and US monetary policy tighten the currency's range. Markets await ECB President Lagarde's speech for directional cues.
Geopolitical Tensions Drive Risk Aversion
French President Macron warned of intensified Russian hybrid threats against Europe. This warning directly undermines investor confidence in the Euro.
Houthi missile attacks on Saudi Arabia keep Middle East tensions high. These events support the US Dollar as a safe-haven asset.
Fed Hawkishness Pressures the Pair
The Federal Reserve raised rates for the first time in three years. Dot plot data suggests one additional hike this year.
ECB officials acknowledge that price pressures may persist longer than expected. This supports bets on October tightening, though it lags US moves.
Technical Levels Define Near-Term Path
The pair remains below the 100-day moving average at 1.1546. Immediate support sits at the 78.6% Fibonacci retracement level of 1.1426.
Bulls must reclaim the 61.8% retracement at 1.1486 to ease downward pressure. A sustained break above 1.1529 would open the path to 1.1571.
