The EUR/USD pair is approaching a major support zone around the 1.1640 level as the US-Iran stalemate led to profit-taking on bearish US dollar bets. What’s next?

The US Dollar (USD) remains strong against its main peers on Friday, with the USD Index (DXY) steady at the upper range of the 98.00s, as investors are reluctant to take excessive risks. The DXY is on track for a 0.4% weekly gain as tensions between the US and Iran escalate.

Deutsche Bank analysts note that strong United States (US) Purchasing Managers’ Index (PMI) data have reinforced perceptions of economic resilience and rising price pressures, leading markets to scale back expectations for Federal Reserve (Fed) rate cuts.

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann expect AUD/USD to remain in a consolidation phase after a brief dip to 0.7111 and close around 0.7130.

ING’s Chris Turner says rising short-dated Eurozone yields on higher Oil and pass-through of input costs are not clearly supportive for EUR/USD. He argues the European Central Bank must get ahead of inflation expectations and that current real rate differentials are unsupportive.

The US Dollar Index eyes its first weekly gain in three weeks as stalled Iran peace talks and Strait of Hormuz disruptions drive safe-haven demand. Read more.

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann highlight that GBP/USD dropped sharply to 1.3448 before recovering, with momentum still only modestly negative. They see scope for a dip toward 1.3440, though a move to 1.3400 looks unlikely on current intraday momentum.

Anticipated gains have reached 98.95~, where deteriorating intraday studies are prompting renewed selling interest

The AUD/USD pair trades subduedly around 0.7120 during the European trading session on Friday. The Aussie pair ticks lower as the US Dollar (USD) trades broadly firm amid higher oil prices due to the prolonged closure of the Strait of Hormuz, a critical passage to almost 20% of global energy supply.

This analysis from the Overbalance series aims to identify three financial instruments, analyzed primarily on the daily/four-hour (D1/H4) timeframe. The analysis uses only the Over…