Geopolitical risks in the Middle East drive demand for the safe-haven USD, pushing EUR/USD to key support levels near 1.1600.
The Euro fell against the US Dollar on Wednesday, testing the 1.1600 support level as escalating Middle East tensions boosted demand for the greenback. Reports of US attacks on Iran and Iranian strikes on Kuwait and Bahrain heightened risk aversion, lifting Oil prices and weighing on investor sentiment.
Earlier Eurozone data, including upward revisions to the Services PMI and a high Producer Prices Index, had little impact amid broader market concerns. In the US, upcoming ADP employment and ISM Services PMI data may influence expectations for Federal Reserve policy, with recent strong jobs and manufacturing figures fueling bets on a year-end rate hike.
EUR/USD traded at 1.1615, with technical indicators signaling a bearish near-term bias. Key support lies at 1.1570, while momentum remains weak below the 50 line on the 4-hour Relative Strength Index.