EUR/USD

Neutral

Archived analysis from Jul 31, 2026, 5:22 AM

Key insight

The pair is trapped between a bullish ECB rate-hike story (Q2 Eurozone GDP beat at +0.4%, firmer German/Spanish CPI) and a resurgent safe-haven USD driven by US-Iran military escalation and a divided Fed that could still hike in September.

EUR/USD is consolidating just below the key 1.1500 round-number resistance after a Fed-driven spike to 1.1530 six-week highs, with the pair now pulling back as geopolitical risk (Iran war escalation) supports a defensive USD bid.

Main risk

US-Iran Military Escalation & Safe-Haven USD Demand

Trump's declaration that the US will strike Iran hard has injected a significant geopolitical risk premium into the USD, threatening to reverse EUR/USD gains below the 1.1436 prior resistance-turned-support level.

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