EUR/USD rises above 1.1800, marking its highest level since the beginning of the Iran conflict. The growing expectation of possible peace talks between the US and Iran is boosting risk appetite on Tuesday. Focus shifts to the US PPI data for further insight into the Fed’s stance on monetary policy. The Euro has shown resilience, gaining against the US Dollar for the seventh consecutive day as of Tuesday. Recent news reports indicating the possibility of renewed peace talks between the US and Iran have heightened risk appetite, driving the pair above 1.1800, reaching its highest level since the beginning of the conflict in the Middle East in late February.
Recent reports from various sources indicate that there are active discussions between Iran and the US, prompting speculation about a possible new phase of negotiations between Tehran and Washington. On Tuesday, it added to those expectations, reporting that delegations from the US and Iran could potentially meet again in Pakistan to advance peace negotiations. Investor focus will now shift, albeit temporarily, to the US Producer Price Index data for March, which is expected to show a trend similar to that of the consumer price figures released on Friday: If market expectations converge, this will provide further rationale for Federal Reserve hawks supporting higher interest rates.
On Tuesday, inflation data from Germany and Spain highlighted the impacts of the conflict in Iran, just ahead of the conference led by European Central Bank President Christine Lagarde at the IMF meeting later that day. The EUR/USD pair exhibits a persistent upward trend, bolstered by technical indicators that consistently reflect positive conditions. The 4-hour Moving Average Convergence Divergence shows an expanding positive histogram, suggesting that buying pressure is still in effect. However, the Relative Strength Index has entered overbought territory, a condition that often indicates a forthcoming bearish correction.
Initial resistance is set at the 1.1825 level, which constrained upward movements on February 26 and 27, and is anticipated to present a hurdle for bulls prior to approaching the peaks of February 9, 10, and 11, roughly around 1.1930. On the downside, immediate support is located at the previous peak, within the 1.1720-1.1730 range, followed by the lows from April 8 and 9, approximately 1.1650, and the ascending trendline support from the late March lows, currently at 1.1610.