Euro Slips Below 1.1600 as Dollar Selling Pressure Eases

EUR/USD pulled back from its intraday high on Monday, trading near 1.15787 after hitting 1.1614, its highest level since June 17. The dollar showed signs of stabilizing after opening the week under pressure, fading the euro's earlier optimism.

**Dollar Stabilization Caps Euro Rebound**

The dollar reversed its recent pullback amid ongoing geopolitical tensions, weighing on the euro. Market reports indicate that escalating US-Iran tensions pushed oil prices higher, which in turn boosted the dollar, pulling EUR/USD from its intraday high of 1.1614 back below the 1.1600 level. The short-term outlook remains bearish, with bullish momentum clearly weakening after the euro returned below 1.1600.

**Eurozone Inflation Data Offers Support**

Eurozone core HICP rose 2.5% year-on-year in May, above the 2.4% market expectation, providing some fundamental support for the euro. However, the positive inflation data failed to offset the pressure from a stabilizing dollar, leaving EUR/USD trading in a narrow range around 1.1580.

**Divergent Views on Medium-to-Long-Term Outlook**

Market views on the euro's next move are sharply divided. Analysts surveyed by Bloomberg expect the euro to continue strengthening, reaching $1.21 per euro next year; but Credit Agricole's Marinov believes traders are getting ahead of themselves, projecting the euro to fall back to around $1.10 per euro next year. ECB President Lagarde noted that the dollar's dominant role in the global financial system is "no longer a given," presenting an opportunity for the euro to enhance its global influence.