EUR\/USD traded at 1.1782 on Friday and stayed above 1.1770. The pair is set for a third weekly rise, returning to levels seen before the Iran conflict and above early March lows.<\/p>\n
Demand for the US Dollar eased as fighting paused in the Middle East. Israel announced a ten-day ceasefire in Lebanon, and US President Donald Trump said the US and Iran will restart peace talks this weekend.<\/p>\n
Reuters reported that US and Iranian negotiators have lowered their aims for the talks. They are said to be seeking a temporary memorandum to reduce the risk of renewed conflict, with the nuclear issue still unresolved.<\/p>\n
Oil prices remain more than 30% above pre-war levels, with the Strait of Hormuz still a point of tension. The Eurozone relies heavily on crude imports, and higher energy costs have lifted inflation while activity has softened.<\/p>\n
EUR\/USD has risen nearly 2.5% over the past three weeks, but momentum has weakened. RSI is just above 50 and MACD is slightly negative, while resistance sits near 1.1825 and then 1.1930.<\/p>\n
Support is around 1.1770, then 1.1720\u20131.1740 and 1.1650. A break below 1.1650 would end the current bullish structure.<\/p>\n
In 2022, the Euro made up 31% of global FX trades, with average daily turnover above $2.2 trillion. EUR\/USD accounts for about 30% of FX transactions, while EUR\/JPY is 4%, EUR\/GBP 3%, and EUR\/AUD 2%.<\/p>\n
The ECB sets Eurozone interest rates and meets eight times a year. Its inflation goal is 2% on the HICP measure.<\/p>\n
We remember this time last year when optimism around the US-Iran peace talks pushed EUR\/USD towards 1.1800. That rally was built on the hope that a deal would ease geopolitical tensions and bring down energy prices. However, looking back from April 2026, we can see that the market’s initial relief was short-lived.<\/p>\n
The temporary memorandum achieved in those 2025 talks failed to create lasting stability, and frictions surrounding the Strait of Hormuz continued. The geopolitical risk premium never fully disappeared from the market, providing a floor for the safe-haven US Dollar. This serves as a crucial lesson for us today about pricing in the full scope of political outcomes, not just the most hopeful one.<\/p>\n
That sustained tension kept oil prices elevated for the remainder of 2025, with Brent Crude averaging over $95 per barrel in the second half of the year, far from its pre-conflict levels. This directly fed into the stagflation fears for the Eurozone that were just whispers back then. The Eurozone, being a net energy importer, saw its trade balance worsen significantly through late 2025.<\/p>\n
As a result, the Euro’s rally above 1.1770 in April 2025 proved to be a selling opportunity as the pair drifted back towards 1.1200 by the fourth quarter. The fundamental pressures of high inflation and slowing growth ultimately overwhelmed the short-term technical bullishness. We see now that the weakness suggested by the MACD indicator at the time was the more telling signal.<\/p>\n
For derivative traders, the primary takeaway is the value of owning options to hedge against sudden sentiment shifts. When markets are reacting to fragile peace talks, buying out-of-the-money puts on EUR\/USD can provide cheap insurance against a breakdown in negotiations. Implied volatility in currency options remains highly sensitive to Middle East headlines, a pattern established during the 2025 conflict.<\/p>\n
Furthermore, Eurozone inflation data has remained stubbornly high, with the latest Harmonized Index of Consumer Prices (HICP) for March 2026 coming in at 3.1%, still well above the ECB’s 2% target. This forces the central bank to maintain a restrictive monetary policy even as economic growth flags, reinforcing the stagflationary environment. This backdrop makes it difficult to justify long-term unhedged bullish bets on the Euro.<\/p>\n
Therefore, strategies should now focus on being prepared for volatility rather than betting on a sustained trend. We should be cautious of selling options or implementing strategies that rely on low volatility, like short straddles on EUR\/USD. The lesson from 2025 is that when geopolitical factors are in play, the market can pivot from risk-on to risk-off with very little warning.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD holds above 1.1770 as dollar demand fades, ceasefire hopes grow, and technical momentum weakens.<\/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-45227","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\/45227","targetHints":{"allow":["GET","POST","PUT","PATCH","DELETE"]}}],"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=45227"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45227\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45227"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45227"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45227"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}