Euro stays defensive vs USD amid geopolitical risks as traders await Lagarde's speech
The EUR/USD pair struggles to capitalize on Friday's modest bounce from the vicinity of mid-1.1400s, or the lowest level since late July, and edges lower at the start of a new week. Spot prices currently trade around the 1.1475 region and seem vulnerable amid rising geopolitical tensions.
The EUR/USD currency pair remains on a defensive stance against the US Dollar due to escalating geopolitical risks, as traders eagerly await ECB President Christine Lagarde's upcoming speech. The pair is currently hovering around the 1.1475 region, with heightened concerns over Russia's growing hybrid threats against NATO countries supporting Ukraine.
Meanwhile, Iran-backed Houthis have recently attacked Saudi Arabian sites, adding to the growing tensions. The US Federal Reserve has recently increased interest rates, supporting the greenback, while the ECB's cautious approach to further rate hikes adds to the EUR/USD pair's downward pressure. With Lagarde's speech set to provide insights into the ECB's future policy decisions, market sentiment will be heavily influenced by geopolitical headlines and the outcome of US-China President Trump's meeting with Chinese counterpart Xi Jinping.
The EUR/USD pair is currently trading under key support levels, with potential upside only if it overcomes resistance at the 61.8% retracement and the 100-day SMA.
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