- The EURUSD has been on an uptrend since mid-May, but rising geopolitical risks have provided the dollar with ammunition.
The EURUSD currency pair is trading downwards on Friday as the US dollar surges on safe haven propulsion. As of this writing, the pair traded at 1.1503, down by 0.67% on the daily chart, with risk aversion on the rise following an escalation of war tension in the Middle East. Israel launched military strikes on Iran on Wednesday night, killing senior military commanders, including Revolutionary Guards chief and top nuclear scientists.
Iran has reacted by launching attack drones against Israel and withdrawn from nuclear talks with the United States. That has raised the risk of a spike in military confrontation in the region, with the US President Donald Trump warning of potentially more devastating attacks by Israel against Iran. This scenario has triggered rising inclination towards safe haven assets, with the US dollar profiting. Meanwhile, gold price rose to their highest in seven weeks, having hit $3,446 per ounce at press time.
EURUSD has been on an uptrend since mid-May, but its third weekly gain in the last four weeks could be disrupted by the new developments. Despite gains by the dollar, US macroeconomic fundamentals remain shaky after the latest jobs data showed a rise in jobless claims. In addition, lower-than-expected Consumer Price Index (CPI) figures raise the prospect of a Fed interest rate cut in next weeks FOMC meeting.
EURUSD Prediction
EURUSD pivots at 1.1532 and action below that level points to bearish control. The pair will likely find initial support at 1.1486. Breaking below that level will signal a strong momentum that could clear the path to test 1.1438.
On the other hand, action above 1.1532 will invite the buyers to take control. That will likely see the first resistance encountered at 1.1561. The downside narrative will be invalid above that level. In addition, an extended control by the buyers could push the exchange rate higher and test the second barrier at 1.1610.
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