EUR/USD Slides Below 1.1700 as Safe-Haven Flows Boost Dollar

Summary:

EUR/USD drops below 1.1700 as geopolitical tensions boost the US Dollar, outweighing strong Eurozone data and rising oil-driven risks.

Sell EURUSD

EXP

PENDING

1.17000

ENTRY

1.16500

TGT

1.17550

1.17149 -0.00025 -0.02%

Point

PENDING

1.16500

TGT

CLOSING

1.17000

ENTRY

1.17550

The Euro weakened at the start of the week, extending its pullback from recent highs near 1.1785 as it slipped below the 1.1700 mark against the US Dollar. The move comes as escalating tensions between the United States and Iran drive a renewed wave of safe-haven demand for the Greenback, overshadowing otherwise solid economic data from the Eurozone.

Market sentiment deteriorated after US President Donald Trump announced plans to release vessels stranded in the Strait of Hormuz, prompting a strong warning from Iranian authorities. Reports—later denied—of a US warship being struck further unsettled investors, highlighting how fragile risk appetite remains. In this environment, geopolitical headlines are clearly dominating price action, with the Dollar benefiting from its haven status.

At the same time, oil prices continue to surge, with Brent trading above $110 and WTI pushing past $101. This poses a significant challenge for the Eurozone, which is heavily reliant on imported energy. Rising energy costs are likely to weigh on growth and inflation dynamics, adding another layer of pressure on the Euro.

This comes despite encouraging economic data. The Eurozone’s Manufacturing PMI rose to a 47-month high of 52.2, while investor confidence also improved. However, these positive signals have been largely ignored, reinforcing the view that geopolitics—not fundamentals—are currently driving the market.

Looking ahead, attention will turn to US data, particularly the upcoming Nonfarm Payrolls report. In my view, unless geopolitical tensions ease, the Euro is likely to remain under pressure, with the US Dollar continuing to draw support from safe-haven flows.

Technical Analysis

From a technical perspective, EUR/USD appears to be transitioning from a prior bullish phase into a developing bearish structure. On the 15-minute chart, price action shows a clear sequence of lower highs following the rejection from the 1.1780 region, indicating weakening upside momentum and the emergence of short-term distribution. The recent breakdown below the 1.1720–1.1730 support zone—previously a key demand area—suggests a shift in market control from buyers to sellers.

Price is currently attempting a minor corrective bounce, but this rebound is occurring beneath the former support zone, which now acts as resistance. This type of price behavior is consistent with a bearish retest, where prior support flips into supply. Unless price can reclaim and hold above the 1.1720 region with conviction, the downside bias remains intact.

Structurally, the market has formed a short-term bearish continuation pattern, with projected lower highs and lower lows illustrated by the descending path. The next significant support lies near the 1.1680 zone, which previously acted as a consolidation base. A decisive break below this level would likely accelerate selling pressure and open the door toward deeper downside targets around 1.1650 and potentially 1.1620.

On the upside, bulls would need to push price back above 1.1730 and sustain momentum beyond 1.1750 to invalidate the bearish structure. Such a move would suggest a false breakdown and could shift sentiment back toward range-bound or even bullish conditions. However, current price action does not yet support that scenario.

Momentum-wise, the chart reflects weakening buying strength following the sharp rejection from the highs. The inability to sustain higher levels, combined with increasingly shallow pullbacks, points to fading bullish momentum and growing bearish pressure. The corrective bounce appears technical rather than impulsive, reinforcing the likelihood of continuation lower.

TRADE RECOMMENDATION

SELL EUR/USD

ENTRY PRICE: 1.1700

STOP LOSS: 1.1755

TAKE PROFIT: 1.1650

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Warren Takunda

Analysts

Warren Takunda, a seasoned finance leader specializing in the Middle East, is a trusted senior analyst with a proven track record. As head of the finance team, he excels in financial planning, analysis, and reporting. Warren's expertise in financial modeling and investment analysis delivers valuable insights to clients.

Rank

Articless

2442

Win Rate

63.43%

P/L Ratio

0.74

Focus on

XAUUSD, GBPUSD, EURUSD

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EUR/USD Slides Below 1.1700 as Safe-Haven Flows Boost Dollar

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