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Published: 24 July 2026,08:13
Daily Market Analysis New
*EUR/USD continues to trade lower as stronger US dollar weighs on the pair
*ECB keeps interest rates unchanged at 2.40%, in line with market expectations
*Renewed Middle East tensions raise concerns over eurozone inflation risks
The EUR/USD continued to edge lower as renewed strength in the US dollar weighed on the currency pair. The greenback remained supported by better-than-expected US economic data and rising Treasury yields, reducing demand for the euro despite the European Central Bank’s latest policy decision.
The European Central Bank kept interest rates unchanged at 2.40%, in line with market expectations. The decision suggests that policymakers are taking a more cautious approach as they assess the balance between inflation risks and growth concerns across the eurozone.
The ECB had previously shifted toward a tighter policy stance after energy market disruptions intensified, particularly following the near-total closure of the Strait of Hormuz. Although the memorandum of understanding signed last month by Washington and Tehran initially raised hopes of a durable solution to the conflict, renewed fighting has revived concerns that energy-driven inflation could return.
Eurozone inflation eased to 2.8% in June, but the resumption of Middle East tensions has increased the risk that price pressures may pick up again, especially if oil prices continue to climb. This leaves the ECB in a difficult position, as policymakers must remain alert to inflation risks while avoiding excessive pressure on economic growth.
From the dollar perspective, stronger US data has reinforced expectations that the Federal Reserve may maintain a more aggressive policy stance than the ECB. US Treasury yields have risen faster than European yields, widening the relative yield advantage in favour of the greenback.
Overall, EUR/USD remains under pressure as dollar strength continues to dominate market direction. Unless European data improves meaningfully or US yields begin to retreat, the pair may struggle to regain upside momentum in the near term.
Technical Analysis
EUR/USD, H4:
EUR/USD is trading lower after breaking below the previous 1.1455 support level, as well as the lower boundary of the triangle pattern, signaling a bearish shift in structure.
Momentum indicators remain weak, with the MACD showing fading bullish momentum and the RSI at 40 staying below the midline. Both indicators suggest growing downside pressure and the potential for further losses.
If bearish momentum persists, the pair could extend losses toward the next support level at 1.1270, followed by 1.1080 if selling pressure intensifies.
However, if bearish momentum fails to sustain, EUR/USD may stage a technical rebound and retest the 1.1455 resistance level, which previously acted as support.
Resistance Levels: 1.1455, 1.1600
Support Levels: 1.1270, 1.1080
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