EUR/USD recovers slightly after Trump announces ceasefire extension

The Euro trimmed some losses against the US dollar after President Trump announced an extension of the ceasefire for negotiations to continue but the blockade of the Strait of Hormuz will still be in effect. Reacting to the update, the EURUSD made minimal gains but still capped under 1.1760.

In other markets, Oil prices rose sharply with the Brent crude back above $99pb, aiming for a $100 as uncertainty around the Gulf increases. Stocks also saw it’s rally dented by the announcement but has since reversed higher as of writing with earning reports set to bring in volatility. Bitcoin also stretched its gains heading into the third day with the price set to test $80,000

With today’s economic calendar looking starved off high-impact data reports after the release of the UK inflation data, all focus will now be on the upcoming PMI reports scheduled for Thursday which is expected to give an insight of the state of economic activities around some of the major economies amidst the growing tension in the Middle East.

Technical outlook

The EUR/USD daily chart indicates a major shift in bias after the price experienced a Break of structure around 1.1574, causing the price to drop to 1.1413 before rebounding higher back to the supply zone around 1.1790-1.1829.

In what looks like a sweep of liquidity around the current supply zone, sellers have managed to push the price lower and could want to stretch their luck further but will encounter a Bullish Fair Value Gap (FVG) set up around 1.1607-1.1652 that could prevent a decline towards range levels around 1.1509 and 1.1413.