EUR/USD Price Forecast: Hopes for a Middle East ceasefire weigh on the US Dollar

EUR/USD Current price: 1.1553

• Financial markets continue to revolve around Iran war headlines.
• United States ISM Services Purchasing Managers’ Index coming up next.
• EUR/USD trades with a modest bullish bias in the near term, holds below 1.1600.

Risk aversion took over financial markets at the beginning of the week, as United States (US) President Donald Trump threatened to destroy Iran’s infrastructure by the end of the ten-day truce if the country does not reopen the Strait of Hormuz by Tuesday, 8:00 pm Eastern time.

Thin trading conditions, amid the Easter Monday holiday in most of Asian markets, initially saw the US Dollar (USD) and Crude Oil Prices gathering upward momentum, although the sentiment improved as the day unfolded. Headlines suggesting ongoing negotiations for a forty-five-day ceasefire put pressure on the Greenback and Oil.

Nevertheless, back-and-forth attacks continue in the Middle East, affecting fossil fuel plants. Israeli Defense Minister Katz announced the country attacked Iran’s South Pars petrochemical facility, and said they will continue striking Iran’s infrastructure with “full force.”

Most European markets remained closed due to the Easter holiday, but American ones will return after the long weekend. The US will release the March ISM Services Purchasing Managers’ Index (PMI), forecast at 55 after printing at 56.1 in February. Other than that, investors await US inflation updates, scheduled for later in the week. The country will publish the February Personal Consumption Expenditures (PCE) Price Index on Thursday and the March Consumer Price Index (CPI) on Friday.

EUR/USD short-term technical outlook

From a technical point of view, the 4-hour chart shows that EUR/USD is mildly bullish as price holds just above the 20-period Simple Moving Average (SMA) near 1.1550 and the flatter 100-period SMA around 1.1531, while remaining capped well below the declining 200-period SMA close to 1.1613. This configuration points to an emerging recovery within a broader downward context, with short-term buyers defending the recent bounce. Momentum indicator has turned positive yet barely holds above its midline, while the Relative Strength Index (RSI) indicator hovers just above 50, indicating moderate upside pressure rather than overextended conditions.

In the daily chart, EUR/USD remains mildly bearish, as spot holds below the flat 100- and 200-day SMAs clustered around 1.1690/1.1680 while the 20-day SMA descends around the current price near 1.1540, framing a capped recovery profile. Momentum indicator has turned marginally positive but remains close to its midline, signaling only modest upside follow-through, while the RSI indicator recovers from oversold territory yet stays below the 50 mark, consistent with lingering selling pressure dominating rebounds.

Initial support is located at the 100-period SMA around 1.1531 in the 4-hour chart, followed by 1.1518 and then 1.1490 as deeper downside levels if intraday weakness resumes. On the upside, the first resistance emerges at 1.1580, with a break opening the way toward 1.1610 and then the 200-period SMA near 1.1613, where the broader bearish trendline of the last sessions converges. A sustained move above this upper band would strengthen the bullish scenario, while a drop back below 1.1510 would shift focus toward a renewed test of the lower supports.

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