EUR/USD Price Analysis: Geopolitical Optimism Boosts Euro Against the Dollar
Original article by Yohay Elam, published on Forex Crunch
In the latest foreign exchange developments as of August 15, 2025, the EUR/USD currency pair has extended its bullish momentum, largely driven by renewed optimism surrounding geopolitical stability. Particularly, market sentiment has responded positively to easing tensions between Washington and Moscow after reports surfaced of a peace initiative led jointly by U.S. President Donald Trump and Russian President Vladimir Putin. The pair reached new highs following the news, building on a steady pattern of modest gains in recent sessions.
Political events remain a key driver of movement in major currency pairs such as EUR/USD. Traders and market analysts keep a close eye on diplomatic developments, especially when macroeconomic data takes a backseat. In this case, the Trump-Putin peace signals appear to have prompted investors to move toward risk-on sentiment, which typically favors the euro over the dollar given its higher sensitivity to global tranquility.
Market Reaction and Recent Price Trends
The euro has held relatively well in recent trading weeks, despite some ongoing economic concerns in the eurozone. The fresh bout of optimism stemming from U.S.-Russia diplomatic overtures provided an accelerant that lifted EUR/USD higher. Here’s a more detailed breakdown:
– The pair surged past the 1.1050 level, topping out near 1.1085 before facing short-term resistance.
– Analysts point to a well-supported uptrend that has formed since the start of the week, with higher highs and higher lows being established on the H4 chart.
– Volume also increased during the spike, suggesting that institutional players may have contributed to the movement.
Beyond geopolitical influence, the U.S. dollar has also had to contend with some dismal domestic data, including weaker-than-expected retail sales and lingering concerns about the Federal Reserve pausing or reversing its rate-hike cycle. In contrast, while the eurozone remains challenged, the absence of further deterioration in its macroeconomic indicators was enough to allow risk-on flows to boost the shared currency.
Key Technical Indicators
From a technical perspective, the EUR/USD chart paints a bullish picture at the time of writing. Buyers seem to be in control, although upcoming data releases and central bank commentary could affect the next movements.
Support and resistance levels to monitor include:
– Support at 1.1030, which also aligns with previous highs and pivot areas seen earlier this week.
– Minor support near 1.0980, which coincides with the 50-period SMA on the 4-hour chart.
– Resistance capped at 1.1090, with a potential breakout opening the path toward psychological yields near 1.1150 and 1.1200.
Other technical insights:
– The Relative Strength Index (RSI) remains above 60 on intraday charts, suggesting continued bullish momentum without entering overbought territory.
– The Moving Average Convergence Divergence (MACD) indicator is showing positive divergence, with widening histogram bars and a crossover in bullish territory.
– Price action has remained consistently above the mid-Bollinger Band, pointing to ongoing strength.
Fundamental Analysis: A Closer Look at the Dollar and the Euro
In addition to political factors, divergent economic signals from both sides of the Atlantic are playing a pivotal role in influencing the EUR/USD pair.
Dollar Factors:
– U.S. inflation data released earlier this week showed a smaller-than-expected rise in consumer prices, raising questions about the longevity of the Fed’s tightening cycle.
– Federal Reserve officials have been more cautious in their comments, noting uncertainties surrounding both global growth and energy markets. Speculation is growing that the Fed may choose to pause to avoid over-tightening.
– The possibility of a soft landing for the U.S. economy remains under debate, but the recent slowdown in retail sales suggests the consumer sector might be cooling.
Euro Factors:
– Policymakers at the European Central Bank (ECB) are still weighing their next
Read more on EUR/USD trading.