EUR/USD Retests Key Zone as Dollar Weakens on Hawkish Repricing Peak

EUR/USD is retesting a critical technical zone as broad US dollar weakness persists, driven by market perception that peak hawkish repricing may have been reached. US equity futures are pointing lower following a tumultuous Wall Street session, while oil prices continue their decline amid uncertainty over Strait of Hormuz shipping arrangements between Iran and Oman. The ECB's latest survey reveals a notable drop in inflation expectations alongside an improving growth outlook for the Eurozone, a combination that could support the euro by reducing urgency for aggressive monetary easing. Interest rate expectations have shifted meaningfully following this week's developments, with traders reassessing the trajectory of both Fed and ECB policy paths. The mild dollar tone suggests positioning is unwinding from recent extremes. Traders should monitor how geopolitical developments in the Middle East evolve, as any disruption to oil flows could rapidly alter risk sentiment and dollar demand. Near-term direction for EUR/USD will likely hinge on upcoming US data releases and big tech earnings impacts on broader risk appetite.