EUR/USD Pressured Near 1.1540 as Middle East Conflict Boosts US Dollar Demand

EUR/USD Pressured Below 1.1550 Amid Rising Israel-Iran Tensions and USD Strength

Monday – Asia: The EUR/USD pair continues to edge lower, quoted near 1.1540 in Monday’s Asian trading session. This marks a second straight session of losses, fueled by geopolitical uncertainty in the Middle East and increased safe-haven flows into the US Dollar (USD).

Middle East Conflict Sparks Risk-Off Sentiment

The USD’s strength is underpinned by intensifying tensions between Israel and Iran, which continue to exchange missile strikes despite international calls for restraint. After Israeli forces targeted Iranian nuclear facilities and military installations on Friday, Iran retaliated with a missile strike on Haifa late Sunday.

According to Mehr News, Iran has now initiated the fourth phase of military operations and vowed a "strong response to any Israeli adventurism." The persistent hostilities have shaken global markets, driving investors toward the safe-haven US Dollar.

Traders Brace for Fed Decision Midweek

In addition to geopolitical factors, traders are keeping a close watch on the upcoming Federal Reserve (Fed) policy meeting on Wednesday, where the US central bank is expected to maintain interest rates at 4.25%-4.50%. The outcome could provide further momentum for the USD and influence EUR/USD direction through the week.

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