EUR/USD Price Forecast: Winds of war keep blowing as central banks’ decisions loom

EUR/USD Current price: 1.1533

• Stocks managed to reverse early slumps, despite continued tensions in the Middle East.
• The German ZEW survey showed Economic Sentiment collapsed amid Iran war-related concerns.
• EUR/USD could extend its near-term recovery towards 1.1600, but bulls remain cautious.

The EUR/USD pair hovers around 1.1530 on Tuesday, reversing an early slump to 1.1466. Financial markets are between a rock and a hard place, as the ongoing escalation of the Iran war and mounting concerns about oil supply disruptions are fueling worldwide inflation.

United States (US) President Donald Trump's confidence in a soon-to-be victory dilutes as time goes by. Restrictions around the Strait of Hormuz, attacks on US bases spread in the Middle East, and Tehran´s determination to resist are extending the chaotic situation into its third week. Meanwhile, Oil prices continue to rise, discouraging consumers and investors.

Macroeconomic data has started to reflect so, as the German March ZEW survey on Economic Sentiment plunged to -0.5 from the previous 58.3. In the EU, sentiment also deteriorated sharply, falling to -8.5 after posting 39.4 in February.

“The ZEW Indicator has collapsed. The escalation in the Middle East is spiking energy prices and increasing inflationary pressure. This heightens the risk for the German economy that the emerging trend of economic recovery will slow down,” noted ZEW President Professor Achim Wambach.

Across the pond, the US published the ADP Employment Change 4-week average, which showed that for the four weeks ending February 28, 2026, the US private employers added an average of 9,000 jobs per week, according to the National Employment Report (NER) Pulse report.

Stock markets are battling to shrug off the dismal mood. Following a tepid start to the day, most Asian and European indexes got to close in the green. Wall Street is also trading with a slight optimism, reversing an early slump.

In the meantime, the Federal Reserve (Fed) is scheduled to announce its monetary policy decision on Wednesday. The Fed is widely anticipated to keep rates on hold, with the focus on the Summary of Economic Projections (SEP) and comments from Chair Jerome Powell regarding the impact of the war on inflation and growth.

The European Central Bank (ECB) will also meet this week, with the decision scheduled for Thursday. The scenario is pretty much the same, with no changes to the current rates, but a shift in policymakers' outlook under the current war scenario.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair 4-hour chart shows that the bias is mildly bullish as price stabilizes above the 20-period Simple Moving Average (SMA) near 1.1485 while remaining well below the declining 100- and 200-period SMAs around 1.1645 and 1.1744. This places the pair in a corrective rebound within a broader downside context. The Relative Strength Index (RSI) has recovered to 54 and maintains its bullish slope, signaling improving buying interest, while the Momentum indicator has turned positive, reinforcing the short-term upward push.

In the daily chart, however, EUR/USD is bearish. Spot holds below all its SMAs clustered around 1.17, with the 20-day SMA crossing below directionless 100- and 200-day SMAs, signaling persistent downside pressure despite the still-positive longer-term trend context. Meanwhile, the Momentum indicator remains below its midline with a downward tilt reinforcing selling dominance, while the RSI indicator has recovered from oversold territory to the high-30s, indicating easing selling pressure but still far from hinting at addional gains ahead.

Initial resistance emerges at the 20-day SMA around 1.1660, with the 100-day SMA near 1.1690 and the 200-day SMA close to 1.1680 forming a broader cap zone that would need to give way to alleviate the current bearish tone. On the downside, immediate support sits at the recent low near 1.1415, followed by the psychological 1.1400 area, where any break would open the way toward the 1.1350 region; as long as price remains below the 1.1660–1.1700 resistance band, rallies are vulnerable to renewed selling.

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