The currency pair declines modestly amid a rebound in the US Dollar Index following geopolitical de-escalation and ECB rate hike.
The EUR/USD pair fell to 1.1567 in European trading on Friday, retreating as the US Dollar Index (DXY) climbed 0.13% to near 99.80. The Greenback recovered after Thursday’s sharp drop, which followed US President Trump’s cancellation of military strikes on Iran, easing safe-haven demand.
The European Central Bank raised key interest rates by 25 basis points, lifting the Deposit Facility rate to 2.25%. Analysts anticipate one more hike in September amid persistent inflation driven by energy market disruptions. The pair remains below its 20-day EMA, signaling near-term bearish pressure.
Technical indicators show the Relative Strength Index at 42, leaning lower but above oversold levels, as the pair trades within a descending trend structure.