On Wednesday (August 5), the euro climbed to 1.1536 against the dollar during the European trading session, as the dollar remained under pressure. This followed reports that the US and Iran were close to reaching a temporary agreement to reopen the Strait of Hormuz. This news triggered a sharp drop in oil prices, easing market concerns about inflation and further interest rate hikes. Qatar said on Tuesday that a provisional plan was being drafted; both Washington and Tehran said negotiations to resume shipping in the Strait of Hormuz had made progress. US Treasury Secretary Scott Bessenter said an agreement could be reached as early as Wednesday. Following Bessenter's remarks, funds flowed into risk assets, and the euro traded in a narrow range against the dollar. He stated that negotiations to reopen the Strait of Hormuz were in their later stages, a message that drove oil prices down. Lower oil prices suggest that inflationary pressures may be contained, thus reducing the probability of a Fed rate hike this year. In market pricing, the probability of a Fed rate hike in September fell from 67% the previous day to about 57%. Investors are awaiting a series of US labor market data to clarify the outlook for monetary policy. July's ADP private sector employment data will be released on Wednesday. The overall outlook for the euro against the dollar is optimistic. ING analysts believe that despite better-than-expected Eurozone economic data last week and a decline in energy prices this week, a significant rise in the euro against the dollar is unlikely. Part of the reason is the drought and water shortage in Europe, which is negatively impacting the economy and disrupting inland waterway shipping. However, rising global stock markets and high investment activity will provide support for the euro. If the euro can break through the 1.1550-1.1560 level today, it is expected to rise further towards 1.1615-1.1620. Technical Analysis (EUR/USD Daily Chart Source: EasyTrade. From the daily chart, EUR/USD has rebounded from its July low of 1.1324, rising to near the Bollinger Band's middle line, currently trading at 1.1542. After a rapid rebound, the price has entered a period of consolidation at higher levels, holding above the 20-day and 50-day moving averages (MA20 and MA50), but facing resistance from the 100-day moving average (MA100) (1.1568) and the upper Bollinger Band at 1.1559, indicating concentrated resistance above. The first resistance level is 1.1559 (Upper Bollinger Band + Previous High). If the daily candlestick effectively closes above this level, the bulls will have room to push higher. The nearest support is 1.1440 (Middle Bollinger Band + MA20), a key level separating bullish and bearish sentiment in this rebound. As long as the daily close holds above 1.1440, the medium-term rebound structure will remain intact; however, a drop below this level would indicate a weakening of the rebound.) The daily MACD remains positive, with the DIFF line above the zero line, indicating continued bullish momentum. However, the red bars have contracted, suggesting a weakening of upward momentum. With the price approaching a confluence of resistance levels and momentum slowing, the exchange rate is highly likely to encounter resistance and pull back around 1.1559, likely undergoing initial range-bound consolidation. The baseline scenario is consolidation within the 1.1440-1.1559 range, with the overall structure leaning bullish, but facing short-term downward pressure. Risk Warning: Past trading performance is not indicative of future results and does not constitute investment advice.