EUR/USD Trims Gains as Geopolitics, Fed Outlook Support Dollar

The euro edged higher at the start of the week after a temporary pause in hostilities between the US and Iran improved risk appetite, dragged oil prices lower, and initially weighed on the greenback.

However, the pair was unable to hold those gains and drifted back toward filling the bullish opening gap. Renewed geopolitical uncertainty and expectations of a hawkish Fed stance restored demand for the dollar.

The reversal left EUR/USD under pressure during the European session, with traders monitoring the evolving geopolitical landscape and upcoming US economic data.