EUR/USD Price Forecast: Cautious optimisc consolidation

EUR/USD Current price: 1.1597

• Tension in the Middle East is on pause but lingering in the background.
• German IFO Business Climate eased to 86.4 in March from 88.4 in the previous month.
• EUR/USD is neutral-to-bullish in the near term, awaits a catalyst.

Financial markets are stable on Wednesday, with the US Dollar (USD) holding on to weekly lows across the FX board. Speculative interest is cautiously optimistic, as the excitement of a ceasefire in the Iran war fades.

Following United States (US) President Donald Trump’s announcement on Monday, attention has now shifted to the reopening of the Strait of Hormuz. According to the New York Times, the US sent Iran a 15-point plan via Pakistan to end the conflict.

At the same time, the White House has ordered the deployment of about 2,000 soldiers to the Middle East, while Iran denied talks with the US. Hopes that the conflict will came to and end diluted, with the ongoing ceasefire seen as a pause rather than an anticipation to the end of the crisis. Nevertheless, crude oil prices remain subdued and off weekly tops, with the barrel of West Texas Intermediate (WTI) trading around $86.

Other than that, European Central Bank (ECB) President Christine Lagarde offered a conference in Germany and noted that the central bank is ready for monetary policy adjustments if inflation proves stronger. She also noted that officials must pay close attention to “early warning signs” hinting at readiness to hike rates should inflation embed.

On the data front, Germany released the March IFO survey, which showed Business Climate in the month eased to 86.4 from the previous revised 88.4, although it came in better than the 86.1 anticipated. The assessment of the current situation remained unchanged at 86.7 in the same period.

Across the pond, the American calendar had little to offer. The country released the Q4 Current Account, which posted a deficit of $190.7 billion, better than the previous $-239.1 billion. Meanwhile, the Export Price Index printed at 1.5% MoM in February, while the Import Price Index came in at 1.3% MoM.

EUR/USD short-term technical outlook

From a technical point of view, the 4-hour chart shows that EUR/USD is neutral-to-bullish as price holds above the rising 20-period Simple Moving Average (SMA) near 1.1580 while also trading just above the gently ascending 100-period SMA around 1.1562, hinting at a developing base above mid-1.15s. The broader 200-period SMA still trends higher but remains well above spot near 1.1693. At the same time, the Momentum indicator stays in positive territory and has been edging higher, indicating modest buying pressure, while the Relative Strength Index (RSI) indicator fluctuates in the mid-50s, reinforcing a moderate bullish tone.

In the daily chart, EUR/USD is bearish as spot extends its slide below the 20-day SMA near 1.1600 and remains below the clustered 100- and 200-day SMAs, just above the shorter one. The 20-day SMA is now trending lower and well above price, reinforcing upside friction after the recent break of the prior consolidation band. Meanwhile, the Momentum indicator remains slightly negative around its midline, the RSI has recovered from oversold territory but stabilized below the 50 mark, consistent with subdued buying interest.

Immediate resistance emerges at the 20-day SMA around 1.1600, with the 100-day SMA at 1.1690 and the 200-day SMA at 1.1680 forming a secondary barrier zone that would cap any corrective bounce while the bearish bias holds. On the downside, initial support is at the recent low near 1.1565, followed by 1.1510, where a failure would open the way toward the 1.1450 region and extend the prevailing downtrend. A daily close back above the 20-day SMA would be needed to ease selling pressure and shift focus to the 1.1680–1.1690 resistance cluster.

(The technical analysis of this story was written with the help of an AI tool.)