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The Euro maintained its position against the US Dollar on Wednesday as escalating Middle East conflicts, including US military strikes near the Strait of Hormuz, offset Federal Reserve policy signals. The EUR/USD pair traded at 1.1420, bouncing from intraday lows at 1.1391.
The US Central Command confirmed that American forces conducted new strikes against Iran, targeting capabilities that could threaten navigation through the strategic Strait of Hormuz. These developments weighed on risk sentiment, contributing to losses across US equity markets and pushing WTI crude oil prices up 3.57% to $74.77.
Federal Reserve minutes released earlier showed unanimous agreement to hold rates steady while acknowledging stable labor market conditions. Participants largely avoided dovish language in the updated policy statement, though views diverged on whether current policy remains neutral or slightly restrictive. Market pricing suggests an 18% chance of a 50-basis-point hike by September, with a 52% probability of a 25-basis-point increase.
The US Dollar Index rose 0.10% to 101.20.
European economic activity remained light, though ECB officials signaled caution. Bundesbank’s Joachim Nagel noted the situation has returned to previous conditions, suggesting the ECB should maintain a meeting-by-meeting approach. ECB’s Primož Dolenc expressed uncertainty about future policy direction.
Thursday’s calendar includes US jobless claims data and Germany’s trade balance report ahead of key inflation releases.
EUR/USD Price Forecast: Technical outlook
In the daily chart, EUR/USD trades at 1.1416, extending its slide below the clustered moving averages, with the latest triple simple moving average group (50, 100, 200) around 1.1572 now acting as overhead supply. Price sits firmly inside a downward parallel channel, below its 1.1610 upper boundary, while the former resistance trend line break level at 1.1615 reinforces the bearish structure above spot. The Relative Strength Index (14) around 40 suggests persistent but not extreme selling pressure, aligning with the pair’s capped tone while it trades beneath all major trend indicators.
On the topside, initial resistance emerges near the lower boundary of the descending channel at 1.1437, where any rebound would first be challenged, before the triple SMA cluster around 1.1572 limits further recovery. Above that, the channel top at 1.1610 and the downtrend-line break level at 1.1615 form a dense barrier, while a stronger recovery would target the horizontal resistance zone at 1.1849. With no significant underlying support levels immediately below price in this dataset, the pair remains vulnerable to further downside as long as it holds under these layered resistances.
