EUR/USD price holds near $1.1550 ahead of Fed decision and U.S. retail sales data
Euro trades near $1.1550 as geopolitical tensions and Fed outlook dominate investor sentiment
The euro-dollar pair traded in a tight range around 1.1477 on Tuesday, as investors adopted a cautious stance ahead of pivotal macroeconomic events. Market focus is firmly on Wednesday’s Federal Reserve interest rate decision and May’s U.S. retail sales data. The restrained trading tone also reflects broader geopolitical anxieties, particularly over the escalating conflict between Israel and Iran.
Key Highlights
- EUR/USD consolidates around $1.1477 as traders await the Fed’s rate decision and retail sales data.
- Geopolitical concerns and weak U.S. data support the dollar’s safe-haven appeal.
- Euro remains capped despite improved German ZEW sentiment reading.
The heightened tensions prompted U.S. President Donald Trump to exit the G7 summit early and advise citizens to leave Tehran. These developments have triggered risk aversion in global markets, with the euro losing ground against higher-yielding currencies and gaining only modestly versus the pound.
U.S. dollar steadies on safe-haven flows
The U.S. dollar index (DXY) held just above 98, supported by safe-haven demand despite ongoing economic concerns. Market participants are bracing for the Fed to maintain its benchmark rate at 4.25%–4.50%, but any hawkish shift in the dot plot or forward guidance could tilt sentiment further in the dollar’s favor.
EUR/USD price dynamics (Source: TradingView)
Weakness in recent U.S. data has fueled speculation about the economy’s underlying momentum. The NY Fed Manufacturing Index tumbled to -16 in June, while retail sales are expected to show a 0.7% decline for May, following April’s marginal 0.1% increase. These numbers suggest tariff-related pressures may be curbing consumer activity.
Technical outlook remains coiled in triangle pattern
From a technical standpoint, EUR/USD is consolidating within a symmetrical triangle, retreating from last week’s 1.1600 high. A breakout above resistance at 1.1600–1.1630 would open room toward 1.1750. On the downside, immediate support lies at 1.1440, with a deeper floor near 1.14157. Breaching this base could trigger losses toward the 1.1370 region, last tested earlier this month.
In previous coverage, we noted that EUR/USD was trapped in a volatile pattern with no clear breakout. That assessment remains valid, with the pair still coiling near support levels and vulnerable to both U.S. data surprises and shifts in global risk appetite.
