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The EUR/USD pair is trading near 1.1520 during Asian hours on Friday, maintaining gains above the 1.1500 psychological level. This resilience comes despite rising geopolitical tensions in the Middle East, which could cap further upside. The market is now focused on the upcoming US Personal Consumption Expenditures (PCE) inflation report, a key Fed policy indicator. The PCE data will provide clarity on the likelihood of future rate cuts, influencing EUR/USD volatility. For traders, the EUR/USD’s performance ahead of the PCE release is critical. A strong PCE reading might pressure the dollar, boosting the euro, while a weaker report could trigger Fed rate-cut speculation, weakening the dollar. Geopolitical risks, particularly in the Middle East, add uncertainty, making the pair more susceptible to sudden swings. Traders should monitor central bank statements and regional tensions for directional cues. MENA investors should watch how the PCE data interacts with oil prices, as Middle East instability often impacts energy markets. A weaker dollar could benefit Gulf exporters but may also heighten regional risk aversion. Key levels to watch include 1.1500 (psychological support) and 1.1600 (resistance). The next major event is the US PCE report due later this week, which could redefine the EUR/USD trajectory.
