EUR/USD Slows Down Amid Middle East Concerns

The EUR/USD pair began the week with some volatility, stemming from the unexpected attack by the radical Islamic group Hamas on several Israeli cities over the weekend.

Sentiment around the market subsequently worsened. Equities entered a sell-off, while safe-haven assets saw renewed appreciation.

When we look at the EUR/USD, it becomes evident that the price has been adversely affected by the US dollar's recovery, prompted by recent headlines. However, it's important to note that the price continues to trade above a significant support zone at 1.04770.

Daily time frame chart. Source: xStation 5

4 hours time frame chart. Source: xStation 5

On the other hand, within the US dollar index, we can observe mixed signals regarding what we can anticipate concerning the US dollar. The price has once again tested the upper boundary of the range that was previously broken and is currently situated in a critical zone for determining the next major movement of the dollar in relation to the major currencies.

USD index. Source: xStation 5