Bearish technicals persist: Euro vs Dollar slips below major averages

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Euro vs Dollar slides 0.50% today

Highlights

U.S. Treasury Secretary affirms contingency plans for military action targeting Iranian oil infrastructure to secure Kharg Island amid joint operations with Israel.
Bessent signals U.S. oil strategy could indirectly benefit Asian allies like Japan, Korea, Indonesia, and Malaysia via redirected Iranian oil proceeds.
EUR/USD remains under sustained bearish pressure, trading below major resistance with a projected five-day range of $1.1489 to $1.1536; probability of further declines exceeds 80% barring a breakout above $1.1591.

U.S. contingency plans as oil infrastructure becomes leverage

Treasury Secretary Scott Bessent has defended recent U.S. military strikes on Iranian infrastructure since the start of a joint operation with Israel, indicating that all options remain on the table to secure Kharg Island, a critical hub for Iran's oil production. He stated that the U.S. had contingency plans in place for these actions, characterizing the strategy as leveraging Iran's own oil assets. Bessent also noted that proceeds from oil sales could benefit Asian allies such as Japan, Korea, Indonesia, and Malaysia. The Treasury secretary provided these comments during an interview on Sunday.

Bearish momentum signals as indicators diverge on corrective risk

Momentum signals for EUR/USD remain firmly bearish, with the MACD and ADX D1 both indicating strong selling pressure. The MACD is at a 'Strong Sell', while the ADX confirms a robust downward trend; the price trades well below key moving averages and the Ichimoku Kijun level ($1.1591), which acts as immediate resistance. A technical divergence is present, as the RSI D1 posts a weak 46.44, and Stoch RSI D1 shows an overbought condition at 91.75, highlighting possible corrective risks. CCI and the Awesome Oscillator are neutral, while BBP's marginally positive reading hints at brief intraday buyer attempts, which are overshadowed by broad momentum selling.

Downside scenario favored as range-bound trade limits gains

For the near term, EUR/USD is expected to remain in a narrow band between $1.1489 and $1.1536, reflecting typical volatility relative to current levels just below resistance. The probability of a price increase is very low (below 20%), and a further decline remains a higher-probability scenario. The baseline expectation is for sideways consolidation between immediate support and resistance. A move above $1.1591 (Kijun) would be required for a bullish reversal, while sustained trading below $1.1489 increases the risk of further downside extension.

Viktoras Karapetjanc, expert at Traders Union, sees EUR/USD facing sustained headwinds from both persistent technical weakness and ongoing geopolitical risks tied to U.S.-Iran tensions. He highlights that bearish momentum remains dominant, with key momentum indicators and moving averages pressured by broad seller sentiment. The probability of a significant rebound is very low without a clear catalyst. However, the analyst remains watchful of potential fundamental shifts if policy headlines or risk appetite improve. "If EUR/USD reclaims $1.1591 on positive macro or policy news, momentum could quickly flip in favor of buyers."

Earlier, analysts noted that bearish momentum continued to dominate the euro against the dollar, with downside risks prevailing across multiple timeframes. The current landscape reinforces this negative view, highlighting that further declines remain possible while sustained trading below the $1.1489 support could trigger an accelerated move lower.

Source of Data: EUR Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.