EUR/USD Seeks Relief from Softer Oil Prices Amid Election Uncertainty
The EUR/USD exchange rate has seen some relief from its recent decline, thanks in part to softer oil prices. The pair had been affected by Germany's regional elections over the weekend, which added to the uncertainty surrounding Chancellor Friedrich Merz's Christian Democratic Union (CDU). However, with expectations of another ECB rate hike this year and easing oil prices, the near-term EUR/USD forecast remains closely tied to energy prices.
US data takes a back seat this week, with little on the macro front likely to move markets. Attention will turn to Donald Trump's meetings with Gulf state representatives, reportedly taking place in New York alongside the UN General Assembly. Crude oil has softened in recent days, but its impact on the dollar and EUR/USD remains significant.
The eurozone PMIs are expected to attract some attention this week, particularly if they show signs of stagflation amid energy price spikes. However, for now, the near-term risks remain tilted to the downside as the pair tests key resistance around 1.1500 area, a former support level.