EUR/USD rose from the 1.1500 area to around 1.1700 and held near that level during the European session. The move followed a two-week ceasefire in Iran, which lifted risk appetite and pushed the US Dollar lower on Wednesday.
The ceasefire agreement between Washington and Tehran included a temporary reopening of the Strait of Hormuz. A deadline had been set for Tuesday at 8 PM Eastern Time (00:00 GMT on Wednesday).
European Data And Market Reaction
In Germany, Factory Orders rose 0.9% in February after an 11.1% fall in January, but missed forecasts for a 2% gain. Producer prices fell, while Retail Sales also declined in line with expectations.
In the US, attention later turns to the minutes of the Federal Reserve’s March meeting and speeches by Mary Daly and Christopher Waller. These will be weighed against Friday’s Consumer Prices Index (CPI) release.
Technically, EUR/USD remains in an uptrend, with the RSI in overbought territory and MACD still strengthening. Resistance sits just above 1.1700, with levels near 1.1740 and 1.1825 higher up.
Support is around 1.1670, then 1.1630–1.1640, while 1.1525 is further below. FOMC minutes are published about three weeks after a decision, and markets also watch the vote split for interest-rate signals.
Looking Back At Last Year
We remember last year, around this time in April 2025, when the EUR/USD briefly touched 1.1700 following news of a ceasefire in Iran. This rally was a clear reaction to renewed market optimism, which caused a sharp sell-off of the safe-haven US dollar. That entire move was driven by a temporary shift in risk appetite.
Today, the environment is fundamentally different, with the pair currently trading near 1.0850. Renewed tensions in the Strait of Hormuz have reversed much of last year’s optimism, and the dollar has regained its appeal as a safe haven. This recent strength has been supported by shipping volume data showing a 15% decrease through the strait in the last quarter alone.
The main driver now, unlike in 2025, is the growing divergence between the Federal Reserve and the European Central Bank. The latest US Consumer Price Index (CPI) data showed inflation holding stubbornly at 3.1%, making Fed rate cuts unlikely in the near term. Conversely, with Eurozone inflation dropping to 2.3% and German factory orders contracting again last month, the ECB is signaling potential rate cuts.
For derivative traders, this suggests that buying EUR/USD put options with strike prices below 1.0800 could be a viable strategy to position for further downside. The implied volatility on these options has risen to a six-month high, indicating the market is pricing in larger price swings in the weeks ahead. This presents an opportunity to profit from a potential drop towards the 2024 lows.
Just as we watched the FOMC minutes for clues last year, their importance has only increased. We will be looking closely at the upcoming release for any language confirming a “higher for longer” interest rate policy. Any such confirmation would likely trigger another leg down in the EUR/USD, making puts with near-term expiries particularly attractive.
