The Euro (EUR) has remained range-bound against the US Dollar (USD), trading near the 1.16 level as markets await the upcoming European Central Bank (ECB) policy meeting and the US Consumer Price Index (CPI) release later this week [1][2]. According to OCBC’s Christopher Wong, the EUR/USD pair held up around 1.16 overnight, supported by a softer USD and firmer Euro-area sentiment data, despite continued rises in oil prices [1]. The pair was last seen at 1.1620, with mild bearish momentum and flat RSI, indicating two-way risks are likely to persist. Key technical levels include support at 1.1560 (100 DMA) and 1.1510 (50 DMA), with resistance at 1.1630 (200 DMA) and 1.1710 [1].
German Trade Balance data released on Tuesday showed a EUR 21.3 billion surplus in July, surpassing expectations of EUR 16 billion and up from June’s EUR 15.4 billion [2]. However, German exports fell by 0.8% in July, missing the 0% consensus, while imports dropped sharply by 5.7%, reversing June’s 4.5% increase [2]. Eurozone data earlier in the week was mixed, with a decline in German Industrial Production offset by an upward revision to Q2 GDP, but these figures have not changed market expectations for a 25 basis point ECB rate hike at this week’s meeting [2].
Elevated oil prices, with Brent Crude trading above $96 per barrel, continue to pose a challenge for the Eurozone’s economic outlook, reinforcing inflation and ECB tightening risks while weighing on growth prospects [1][2]. Geopolitical tensions have also increased, with Iran threatening attacks on energy infrastructure in the Gulf, including US oil and gas sites, which has contributed to higher oil prices and further uncertainty [2].
In the US, recent Nonfarm Payrolls data provided some support for the USD, highlighting the resilience of the US economy and keeping the risk of further Federal Reserve tightening alive. However, OCBC notes that this is not sufficient on its own to drive a sustained USD rally, and markets are looking to this week’s CPI for clearer direction. An upside surprise in CPI could renew USD strength, while a softer print would likely keep EUR/USD trading in a range [2].
CONCLUSION
The Euro remains steady near 1.16 against the US Dollar as markets balance expectations of an ECB rate hike with concerns over rising oil prices and geopolitical risks. While recent data and technical signals suggest two-way risks, the upcoming ECB meeting and US CPI release are expected to provide the next major catalysts for the currency pair.