EUR/USD ticked up in early Monday trade, hovering just above 1.1150, as support from a hawkish European Central Bank stance competed with renewed demand for the US Dollar. Rate expectations in the euro area were underpinned by the prospect of a December move as energy-driven inflation risks build, while reported Middle East diplomacy weighed on the Dollar’s safe-haven bid. Iranian negotiators were said to have held a third straight day of talks with Qatari mediators on Sunday, and Tehran outlined a 48-hour plan to reopen the Strait of Hormuz subject to US conditions.
Geopolitical Developments and Eurozone Outlook
Geopolitical risk remained elevated, with Washington keeping the option of further action after the November 3 midterm elections, Iran’s leadership ordering military preparations, and Ukrainian strikes on Russian refineries sustaining an oil-linked risk premium. Alongside this, US rate pricing firmed: the CME Group’s FedWatch Tool shows about a 75% chance of a Federal Reserve hike in December, reinforced by Thursday’s US data on activity and prices. In Europe, concerns over France’s debt trajectory and political deadlock added a further constraint.
Technical Analysis and Key Levels
Technically, EUR/USD stayed below the 50-day SMA at 1.1379 and retracement resistances at 1.1247 and 1.1336; higher barriers sit at 1.1408, 1.1480, 1.1582 and 1.1712, while support is flagged at 1.1104.
