Euro Edges Higher as Oil Risk Lingers

EUR/USD rose slightly by midday Thursday amid a pullback in Treasury yields and a stabilization in broader risk sentiment. While the Iran-driven oil shock continues to cast a shadow over global markets, today’s price action reflected a pause in dollar strength rather than a fundamental shift in the macro narrative. For the eurozone, elevated energy prices remain a key concern, given the region’s reliance on imported fuel and the direct pass-through to inflation and growth. With the U.S. maintaining a relatively resilient economic profile but yields easing at the margin, EUR/USD’s move higher reflects a modest rebalancing in rate expectations rather than a decisive shift in policy divergence.  

EUR/USD Daily Price History

In the above chart, EUR/USD rates have finally cleared the critical inflection point near 1.1600, not just the January 2026 swing low and the uptrend from the August and November 2025 swing lows, but also where the 20- and 50-day EMAs (exponential moving average) have resided for the past month. It’s been previously noted that a move above 1.1600 puts into play a potential short-term bottom (inverse head and shoulders) that could pave the path for a move towards 1.1900. With Slow Stochastics moving into overbought territory and MACD trending higher through its signal line, momentum is now on the bulls’ side. Fundamental risks remain two-sided, and any unwind in risk sentiment could reverse the euro’s gains. 

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