EUR/USD Holds Near 1.18 as 84% ECB Hike Odds Meet US-Iran Stalemate

7 articles · Updated · investinglive.com · May 11

EUR/USD rebounded from 1.1650 support to the 1.18 area but stayed trapped in a range as traders found no fresh catalyst to break the deadlock.
US-Iran tensions kept the dollar supported after both sides rejected war-ending proposals, while reports said Donald Trump wants to strike Iranian nuclear sites and Israel still prioritizes removing Iran's nuclear material.
On rates, markets price an 84% chance of an ECB hike in June and 68 basis points of tightening by year-end, limiting euro upside because policymakers are unlikely to out-hawk those expectations.
The pair is now boxed between resistance around 1.18 and an upward trendline, with sellers leaning on the top of the range and buyers eyeing either a pullback or a breakout.
US CPI on Tuesday, PPI on Wednesday, and retail sales plus jobless claims on Thursday are the next tests for whether Fed expectations or geopolitics drive the next move.

Is the ongoing Iran war the catalyst that finally ends the U.S. dollar's dominance in global finance?

With China benefiting from the conflict, what can compel Beijing to help broker peace in the Middle East?

Will the Hormuz Strait closure permanently reroute global energy supplies and shatter old alliances?