The currency pair gains modestly as markets price in a September ECB rate hike amid inflation concerns but faces resistance near key technical levels.
The EUR/USD pair climbed to 1.1445 in early European trading, supported by expectations of a European Central Bank rate hike in September. The ECB is anticipated to hold rates steady this week but signal another increase due to rising energy prices and inflation risks.
Despite the hawkish ECB outlook, the pair remains below its 100-day Simple Moving Average, a key resistance level. Technical indicators suggest limited upside momentum, with the Relative Strength Index near 48, below the neutral 50 mark.
Geopolitical tensions in the Middle East, including U.S. airstrikes on Iran, may bolster safe-haven demand for the USD, capping further gains for the EUR. Iran’s threats to disrupt oil transit in the Strait of Hormuz add to market uncertainty.