EUR/USD faces pressure as Middle East tensions weigh on European markets

EUR/USD declined 0.3% to 1.0905 in pre-market trading as geopolitical tensions in the Middle East dampened risk sentiment across European markets. European equity futures point to a negative open, with DAX futures down 0.7% and FTSE 100 futures falling 0.5%. Concerns about Federal Reserve independence added to market uncertainty, following recent political comments about monetary policy influence. The euro faces additional headwinds from energy price concerns, as Middle East tensions threaten to disrupt oil supplies and increase Europe's import costs. Safe-haven flows benefited the dollar, while the euro struggled despite last week's positive sentiment data. Technical indicators show EUR/USD testing support at 1.0900, with a break potentially accelerating declines toward 1.0850. Resistance remains firm at 1.0950, requiring significant risk-on momentum to overcome in the current environment.