EUR/USD Plunges Below Key Support as Safe-Haven Demand Surges

The EUR/USD pair has broken below its key support level as investors flock to safe-haven assets, driving up demand for the US dollar. The European Central Bank's decision to leave interest rates unchanged after June's hike and reiterate that future decisions are data-dependent has kept pressure on the euro. Although eurozone inflation slowed in June, policymakers acknowledged that rising energy prices due to tensions in the Middle East could complicate the inflation outlook.

Markets are now focusing on September as a potential window for policy adjustments. However, expectations for the Federal Reserve remain balanced, with investors anticipating no immediate tightening but limited upside potential for EUR/USD. The ongoing conflict involving Iran and rising oil prices have increased defensive positioning across global markets.