EUR/USD Price Forecast: Recovering 1.1800, what’s next?

EUR/USD Current price: 1.1801

• Hopes for an extended ceasefire in the Middle East boost the market’s mood.
• The United States Producer Price Index rose by less than anticipated in March.
• EUR/USD turned bullish and may set a floor at 1.1800 in the upcoming days.

The EUR/USD pair trades at around 1.1800 for the first time since last February, as optimism heavily weighs on the US Dollar (USD) demand. Investors welcome news that the United States (US) and Iran will return to the negotiating table in Islamabad later this week or early next week, which means that, at least for the next few days, tensions won't escalate.

Meanwhile, the US sustains a blockage of Iranian ports in the Strait of Hormuz, after also increasing its military deployment in the region, prompting complaints from Chinese authorities, which called it a “dangerous and irresponsible act.” Indeed, the truce is fragile, but as long as it remains in place, financial markets are likely to trade with more confidence.

On the data front, the US offered some relevant figures. On the one hand, the ADP National Employment Report (NER) showed that, for the four weeks ending March 28, private employers added an average of 39,250 jobs per week, posting a fourth consecutive week of strong job creation.

On the other hand, the US Producer Price Index (PPI), which rose by less than anticipated. The annual reading came in at 4%, lower than the expected 4.6% but higher than the previous 3.4%. Core annual wholesale inflation, according to the PPI estimate, printed at 3.8%, matching the February revised figure, but below the expected 4%. The figures maintained the USD on the bearish side.

EUR/USD short-term technical outlook

From a technical point of view, the four-hour chart shows that EUR/USD is bullish in the near term, as the price holds clearly above its key moving averages. The 20-period simple moving average (SMA) at 1.1725 offers the first layer of dynamic support, while the 100- and 200-period SMAs clustered around 1.1594/1.1593 sit further below and hint at a well-established underlying uptrend. The Momentum indicator remains constructive, advancing whitin positive levels, while the 14-period Relative Strength Index (RSI) indicator hovers near 73, suggesting persistent buying pressure even as the pair stretches to fresh highs.

In the daily chart, EUR/USD is bullish, advancing for a seventh consecutive day. Spot trades above both the 100- and 200-day SMAs at 1.1698 and 1.1673, respectively, while the shorter-term 20-day SMA at 1.1594 advances below them. The Momentum indicator supports additional gains, while the RSI indicator is at 65 points firmly north, suggesting that buying pressure remains in control for now.

Immediate resistance comes at around 1.1830, where the pair topped in late February. Once beyond it, 1.1900 comes next. On the downside, initial support is seen at the 100-day SMA at 1.1698, with the 20-day SMA at 1.1594 reinforcing a deeper demand area where buyers would be expected to re-emerge if the current advance pauses or corrects.

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