EUR/USD stays under selling pressure beneath 1.1600, appearing fragile close to its lowest point in several months

EUR/USD Faces Continued Downward Pressure

The EUR/USD currency pair is finding it difficult to maintain its recent rebound from the 1.1530 area—its lowest point since November 2025—and has now declined for a third straight session as of Wednesday. During Asian trading hours, the pair slipped back below the 1.1600 threshold, leaving it exposed to further losses.

Ongoing tensions in the Middle East show little sign of resolution, heightening worries about the inflationary impact of a drawn-out conflict. These concerns are compounded by diminishing expectations for aggressive rate cuts from the US Federal Reserve. As a result, the US Dollar (USD) continues to attract safe-haven flows. The USD Index (DXY), which measures the dollar against a basket of major currencies, remains strong and is hovering near its highest level in three months, reached on Tuesday. This persistent dollar strength is putting additional pressure on the EUR/USD pair.

Additionally, the closure of the Strait of Hormuz has sparked fears of potential disruptions to oil supplies from this crucial region. Since Europe is heavily dependent on imported energy, any further increases in crude oil and natural gas prices could deliver a significant economic blow. This scenario further undermines the euro and supports a bearish outlook for the EUR/USD in the near term. Investors are now awaiting the release of the final Eurozone Services PMI data for potential short-term trading opportunities ahead of key US economic releases.

On Wednesday, the US economic calendar includes the ADP private-sector employment report and the ISM Services PMI, both of which are closely watched by the market. However, geopolitical events are expected to remain the primary driver of USD demand. Given these underlying factors, the EUR/USD pair appears likely to continue its downward trajectory in the short term.