EURUSD:
The euro is declining against the US dollar amid stronger demand for safe-haven assets and a rising dollar index. Investors remain cautious due to prolonged uncertainty around the functioning of the US government and expectations for further Federal Reserve decisions later this month. Against this backdrop, market participants are trimming risk and favoring the dollar, which naturally pressures the pair.
An additional headwind comes from political news out of Europe. Heightened domestic tensions in France have increased euro volatility and pushed market participants toward caution. At the same time, eurozone macro data on services and manufacturing offer little reason to expect a swift recovery in business activity, which supports a near-term scenario of a weaker euro.
In the US, the focus in the coming days shifts to consumer sentiment dynamics and inflation signals. Even if the Fed moves toward policy easing closer to the end of the month, the current mix of a stronger dollar and political uncertainty in Europe creates a fundamentally downward bias for EURUSD.
Trading recommendation: SELL 1.1625, SL 1.1645, TP 1.1535
Origin: FreshForex
