EUR/USD Price Forecast: Fears keep fueling US Dollar demand

EUR/USD Current price: 1.1561

• The continued escalation of the Iranian war sent Oil prices skyrocketing.
• Sentiment in the EU deteriorated amid uncertainty related to the Middle East conflict.
• EUR/USD reached fresh 2026 lows and maintains its bearish bias despite bouncing.

The US Dollar (USD) gapped higher at the weekly opening, as weekend war headlines spurred panic. The EUR/USD pair dropped towards 1.1500, while Oil prices soared, with the barrel of West Texas Intermediate (WTI) soaring towards $110 after closing last week at around $88.

News indicated that major Middle East Oil producers cut oil output as they run out of storage space, as the Strait of Hormuz remains closed amid the ongoing Iran war.  As a result, the G7 is planning an emergency meeting to release oil reserves. United States (US) President Donald Trump said Sunday that increasing oil prices are “a very small price to pay,” adding they would “drop rapidly when the destruction of the Iranian nuclear threat is over.”

In the mid-European session, financial markets seem a bit more stable, but fears prevail. The USD pared its run, but holds on to gains, with the weekly opening gaps across the FX board still unfilled. The EUR/USD pair trades at around 1.1560 early in the European session, with the Euro (EUR) capped by dismal local data. The Eurozone Sentix Investor Confidence Index deteriorated to -3.1 in March from 4.2 in February, as the Iran war weighed on global energy markets and sentiment.

The upcoming American session will be light in terms of data, although the US will publish inflation updates in the upcoming days. The February Consumer Price Index (CPI) will be out on Wednesday, while the delayed January Personal Consumption Expenditures (PCE) Price Index will be out on Friday. The figures are relevant ahead of the upcoming Federal Reserve (Fed) monetary policy decision next week.

EUR/USD short-term technical outlook

In the 4-hour chart, EUR/USD stays bearish as spot holds well beneath the 20-, 100-, and 200-period Simple Moving Averages (SMAs), which all trend lower. At the same time, the Momentum indicator sits below its midlines and has weakened again after a brief stabilisation, reinforcing selling pressure rather than signalling a base. Also, the Relative Strength Index (RSI) indicator hovers near 41, still below the 50 midline, indicating that rebounds remain corrective within a broader downside phase.

Immediate resistance emerges at 1.1600, where recent intraday highs converge with the descending 20-period SMA, with a break opening room toward 1.1650 and then the 1.1700 area. On the downside, initial support aligns at 1.1520, guarding the path toward a long term statitic support area around 1.1470. As long as price trades below 1.1600, the path of least resistance remains to the downside, and sellers would retain the advantage on rallies toward resistance.

Technical readings in the daily chart reinforce the bearish case. The EUR/USD pair extends its slide below all its SMAs, while the 20-day SMA has started to roll over toward the medium-term averages. Finally, the Momentum indicator heads firmly lower well below its midline, while the RSI indicator maintains its downward slope near 30, without signs of downward exhaustion.

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