EUR/USD Trapped as Central Banks Cancel Each Other Out

The EUR/USD pair is stuck in a range, unable to break above 1.1420 or fall below 1.1362.

This is despite the euro receiving its cleanest fundamental tailwind in five months on Monday, as cheaper oil prices lifted the currency by 51 pips before it faded.

The market does not trust the ceasefire between the US and Iran, which was triggered by a strike pause, and traders are pricing it as reversible due to continued attacks from Iran-backed Houthi forces.

The pair's inability to move is attributed to two hawkish central banks cancelling each other out: the ECB raised rates on June 11, while the Federal Reserve signalled hikes six days later.