EURUSD, ECB hawkishness and renewed geopolitical/inflation risksEURO VS US DOLLARTRADENATION:EURUSDTradeNationThe key driver for EUR/USD remains the renewed escalation around the Strait of Hormuz. Iran’s stance that reopening the Strait is conditional on the US ending its actions, lifting the blockade and compensating for damages has reduced hopes of a quick resolution. This pushed Brent crude +4.99% to $87.72, with the 6-month contract also rising, reinforcing concerns that higher energy prices could generate another inflationary shock. For EUR/USD, this is potentially bearish through the policy channel. Markets have become more hawkish on both the Fed and ECB, with September hike expectations rising to 52% for the Fed and 90% for the ECB. However, the rise in oil prices creates a more complicated dynamic: persistent energy inflation could keep both central banks restrictive, while simultaneously damaging European growth. European equities remain resilient, with the STOXX 600 reaching another record, suggesting markets are not yet pricing a major escalation. This resilience is supportive of the euro, but the stronger oil price and geopolitical uncertainty could limit EUR/USD upside. Market Analyst Conclusion: EUR/USD remains caught between ECB hawkishness and renewed geopolitical/inflation risks. The ECB’s higher rate expectations provide near-term support for the euro, but a prolonged Hormuz disruption would be increasingly negative for European growth and could strengthen the dollar as a safe haven. The key risk is therefore a sustained move higher in oil prices; if Brent remains above $85–90, EUR/USD upside is likely to become increasingly difficult to sustain. Key Support and Resistance Levels Resistance Level 1: 1.1595 Resistance Level 2: 1.1670 Resistance Level 3: 1.1740 Support Level 1: 1.1465 Support Level 2: 1.1430 Support Level 3: 1.1375 The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. To the extent permitted by law, in no event shall Trade Nation (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk. Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Financial Spread Bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.7% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.