Euro edges higher above 1.1450 despite German political risks, hawkish Fed rhetoric
The EUR/USD pair trades with mild gains near 1.1470 during the early Asian trading hours on Tuesday. Middle East diplomacy hopes provide some support to the riskier assets such as the Euro (EUR) against the US Dollar (USD). Traders await the Fedspeak later on Tuesday for fresh impetus.
The Euro edged higher above 1.1450 despite political risks in Germany and hawkish Federal Reserve rhetoric. Traders welcomed Middle East diplomatic hopes as potential support for riskier assets like the Euro against the US Dollar. President Masoud Pezeshkian led an Iranian delegation to the United Nations General Assembly in New York, generating optimism for a diplomatic resolution to the Middle East conflict.
US President Donald Trump expressed willingness to meet Iranian President on the sidelines of the UN General Assembly. However, political turbulence in Germany, with the far-right Alternative for Germany gaining first place in state elections, could negatively impact the Euro. Hawkish comments from the US Federal Reserve officials, such as Fed President Austan Goolsbee, could lead to a stronger US Dollar, creating a headwind for the Euro.
Technical analysis reveals that EUR/USD is currently trading below the 100-day simple moving average and the Bollinger middle band, suggesting a bearish near-term trend. Resistance levels lie at the 100-day SMA (1.1545) and the Bollinger SMA centerline (1.1575), while support is offered by the lower Bollinger band (1.1445). The Euro remains a crucial currency for 20 European Union countries in the Eurozone, representing about 31% of all foreign exchange transactions.
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