EUR/USD Under Pressure as Rising Yields and Oil Prices Strengthen the Dollar

EUR/USD remains under pressure as markets continue focusing on elevated oil prices, rising Treasury yields, and uncertainty around US-Iran negotiations. Although President Trump signalled possible diplomatic progress, investors remain cautious as energy prices stay elevated, keeping inflation concerns alive and supporting the US dollar.

The stronger dollar environment is also being reinforced by expectations that the Federal Reserve may keep interest rates higher for longer as inflation pressures remain persistent. This has helped USD/JPY move back above 159, while gold and risk-sensitive assets also remain under pressure.

Technically, EUR/USD has turned modestly bearish after breaking below the important 200-day moving average and 1.1630 support zone. Key support is now seen near 1.1590, followed by 1.1510 if downside pressure continues. On the upside, the pair would need to reclaim 1.1700 to improve the short-term outlook and potentially retest 1.1800.

Overall, unless there is a major breakthrough in US-Iran negotiations that lowers oil prices and improves risk sentiment, the near-term outlook continues to favour a stronger dollar and downside risks for EUR/USD.

EUR/USD Daily Chart