EUR\/USD rose about 0.33% on Thursday, trading near 1.1700 after reaching a five-week high of 1.1723. The US Dollar Index (DXY) fell 0.18% to 98.82 as risk appetite improved.<\/p>\n
Attention remained on the Middle East, where Israel and Lebanon appeared ready to start peace talks despite ongoing hostilities. Discussions are set for next Tuesday in Washington after a call between Benjamin Netanyahu and Nawaf Salam, while Iran said the truce also covers the Israel-Lebanon border.<\/p>\n
Oil prices fell, which can weigh on the euro, and moves in WTI were linked with a softer dollar. Markets also awaited the US Consumer Price Index (CPI) report due on Friday.<\/p>\n
US inflation data showed the PCE Price Index at about 2.8% year on year, above the Fed\u2019s 2% goal. Core PCE eased from 3.1% to 3% in February, and Q4 2025 growth was 0.5% versus 0.7% expected.<\/p>\n
Initial Jobless Claims for the week ending 4 April rose to 219K versus 210K forecast and 203K prior. Markets priced ECB tightening of 56 basis points by year-end.<\/p>\n
Technically, EUR\/USD traded at 1.1696, above the 50-, 100- and 200-day SMAs near 1.1677. The RSI was near 58, with resistance tied to a trend line from 1.1929 and support between 1.1696 and 1.1677.<\/p>\n
A year ago, we saw the EUR\/USD rally towards 1.1700, driven by hopes of a truce in the Middle East and a softer US dollar. That optimism from early 2025 now seems distant, as the focus has shifted firmly back to monetary policy divergence. The pair is currently trading near 1.1450, showing that the economic fundamentals are reasserting control.<\/p>\n
The market’s expectation back in 2025 for significant European Central Bank tightening did not fully materialize compared to the Federal Reserve’s path. Recent US inflation data for March 2026 showed a stubborn Consumer Price Index at 3.1%, keeping the Fed on high alert. In contrast, the latest Eurozone HICP flash estimate was a more subdued 2.5%, suggesting the ECB has less pressure to act aggressively.<\/p>\n
This divergence is also clear in the labor markets, where we’ve seen US strength continue. The March 2026 Non-Farm Payrolls report showed a robust gain of 240,000 jobs, with unemployment holding steady at 3.7%. This contrasts with continued weakness in Germany, where the latest IFO Business Climate index came in at a disappointing 87.5, signaling ongoing sluggishness we first noted in early 2025.<\/p>\n
For traders, this reinforces a strategy of selling into any significant EUR\/USD strength. Given the sticky US inflation and resilient jobs data, derivative plays that benefit from a stronger dollar appear favorable. Buying puts on EUR\/USD with a strike around 1.1300 could be a viable strategy to position for a potential downside move in the coming weeks.<\/p>\n
However, we must remain aware of geopolitical risks, which proved to be a major market-mover last year. While the Israel-Lebanon truce talks of 2025 calmed markets temporarily, any renewed flare-up could again weaken the dollar on safe-haven outflows. Traders should watch oil prices closely, as a sharp spike could quickly change the inflation outlook and complicate this picture.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD climbed to five-week high as dollar softened; Middle East talks, inflation data, and ECB bets watched.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-44591","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44591","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=44591"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44591\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=44591"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=44591"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=44591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}