• The EUR/USD price analysis shows a stronger dollar amid increasing geopolitical tensions.
• Israel attempted to kill Hamas leaders with an airstrike in Qatar.
• The euro remained pressured after France’s Prime Minister resigned.

The EUR/USD price analysis shows increasing geopolitical tensions, which have increased demand for the safe-haven dollar. At the same time, political uncertainty in France is keeping pressure on the euro. Meanwhile, market participants are gearing up for US wholesale and consumer inflation data.

Reports on Tuesday revealed that Israel had attempted to kill Hamas leaders with an airstrike on Qatar. Meanwhile, Russian drones were shot down in Poland after entering during a strike on Ukraine. These reports shifted traders’ focus from the Fed and sent them seeking safety in the dollar.

“The market has made up its mind, and probably quite rightly, that the Fed is going to be cutting interest rates. But for one, there’s been quite a lot in the price in terms of between now and the end of next year,” said Jane Foley, head FX strategist at Rabobank.

“On the other hand, playing in the same direction is the geopolitical uncertainty. There is the Poland news, there is the Qatar news. None of that is reassuring,” she said.

Elsewhere, the euro remained pressured after France’s Prime Minister resigned, causing some political uncertainty in the country. Meanwhile, traders are anticipating the US PPI and CPI reports for more clues on Fed rate cuts.
 

EUR/USD key events today

• US core PPI m/m
• US PPI m/m
   

EUR/USD technical price analysis: Bullish breakout turns false as bears return
 

(Click on image to enlarge)

EUR/USD 4-hour chart
 

On the technical side, the EUR/USD price has dropped back into its range after a false bullish breakout. At the same time, the price is on the verge of breaking below the 30-SMA, a sign that bears are about to take charge. Meanwhile, the RSI trades below 50, suggesting stronger bearish momentum.

The EUR/USD has maintained a sideways move between the 1.1600 support level and the 1.1720 resistance level, with both bears and bulls attempting to break out. In the most recent attempt, bulls pushed the price above the range resistance. However, they failed to keep it above, and it dropped back below. Nevertheless, the attempt was the best so far.

If the price closes below the 30-SMA, bears will likely retest the range support. A break below this level would signal a bearish breakout, allowing EUR/USD to start trending lower. On the other hand, if the level holds firm, the price will remain in a consolidation phase.

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