The EUR/USD has experienced a reversal from the previous week’s peaks close to 1.1740, yet it has remained supported above 1.1670 thus far. The Euro exhibits a degree of stability in the face of the unsuccessful Iran negotiations and the United States’ blockade of Hormuz. Market participants exhibit a strong belief that negotiations between the US and Iran will recommence in the near future. The euro retreated from last week’s highs near 1.1740 against the US dollar on Monday, but so far is holding well in the upper 1.1600s. The pair is currently trading at 1.1685, having found support at 1.1670 earlier in the day.
The breakdown of peace negotiations between the US and Iran, coupled with the US commitment to obstruct the Strait of Hormuz, has led to a surge in oil prices, consequently bolstering demand for the safe-haven US Dollar. The adverse effects on the Euro, nonetheless, have been contained to a certain extent thus far. Analyst, Thu Lan Nguyen, indicates that expectations for de-escalation in the US-Iran conflict are restraining Euro bears: “At the time of writing, market movements remain limited.” Brent crude is currently priced slightly above 100 USD per barrel, while EUR/USD has declined to below 1.17, distancing itself from the extreme levels observed during this conflict (…) Provided that market sentiment continues to be optimistic, risk premiums, including implied EUR/USD volatility, are expected to remain at relatively low levels.
The economic calendar appears sparse today, with developments from Iran poised to exert influence on market dynamics. On Tuesday, attention will be focused on the President of the European Central Bank, Christine Lagarde, who may provide further insights into the monetary policy decision scheduled for April 30. The EUR/USD currency pair exhibits a moderately bullish near-term outlook as it stabilizes above prior peaks, specifically around the 1.1630 level. Momentum is showing signs of cooling from previous overbought levels, as indicated by the Relative Strength Index positioned in the mid-50s and the Moving Average Convergence Divergence lingering near the zero line, suggesting a potential pause rather than a complete reversal of the recent upward trend.
On the topside, immediate resistance is situated in the 1.1725 – 1.1735 range, with additional obstacles appearing at 1.1825 (highs from February 26 and March 1) preceding the highs from February 10 and 11, around 1.1930. On the downside, the session low at 1.1670 is expected to offer some support, succeeded by the noted 1.1630-1.1640 range, which corresponds to the highs from March 23 and 25, as well as the low from April 8. Further down, the most likely target is the ascending trend support from the March 30 low, currently situated around 1.1590.