EUR/USD remains capped below 1.1570 despite US Dollar’s weakness

EUR/USD bounces up from lows near 1.1505, but fails to find acceptance above 1.1570.
Hopes of a peace deal in Iran have undermined the safe-haven US Dollar on Monday.
In the US calendar, all eyes are on the ISM Services PMI release.

Guillermo Alcala FXStreet

The Euro (EUR) is trading higher against the US Dollar (USD) on Monday, favoured by a moderate improvement in market sentiment, amid news of a potential ceasefire in the Iran war. The pair bounced up from session lows at 1.1505, but has been unable to extend gains beyond 1.1570 so far, and remains trapped within last week’s trading ranges.

Investors have reacted with moderate enthusiasm to reports that the US and Iran have received a plan for a 45-day ceasefire, which might end hostilities immediately and reopen the Strait of Hormuz. The market, however, remains cautious after US President Donald Trump reiterated his threat to destroy Iranian civilian infrastructure and energy sites if they failed to reopen Hormuz before Tuesday at 8 PM Easter Time (00:00 GMT).

On the macroeconomic front, the US Nonfarm Payrolls report released last Friday showed a 178K increase in net employment in March, beating expectations of a 60K rise. On Monday, with most markets closed on Easter Monday, the focus is on the US ISM Services Purchasing Managers' Index (PMI). Services activity is expected to have slowed down moderately in March, but still at levels consistent with a healthy expansion.

Technical Analysis: Choppy, rangebound trading

EUR/USD is hovering at the mid-range of the 1.1500s, featuring a neutral to negative near-term bias. The 4-hour Relative Strength Index (RSI) eases to levels near the 50 midline, suggesting a cooling momentum while the Moving Average Convergence Divergence (MACD) line retreats toward the signal line, with the histogram contracting, which reinforces a loss of directional conviction.

Immediate resistance is now set at the 1.1570 area, which closes the path towards the late March and early April highs, between 1.1630 and 1.1640. Further up, the target is the March 10 high, at 1.1667.

On the downside, initial support is at the session low, right above 1.1500, ahead of the March 19 and 30 lows near 1.1445 and the mid-March lows at the 1.1410 area.

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

Economic Indicator

ISM Services PMI

The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector, which makes up most of the economy. The indicator is obtained from a survey of supply executives across the US based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that services sector activity is generally declining, which is seen as bearish for USD.

Why it matters to traders?

The Institute for Supply Management’s (ISM) Services Purchasing Managers Index (PMI) reveals the current conditions in the US service sector, which has historically been a large GDP contributor. A print above 50 shows expansion in the service sector’s economic activity. Stronger-than-expected readings usually help the USD gather strength against its rivals. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are also watched closely by investors as they provide useful insights regarding the state of the labour market and inflation.

Economic Indicator

ISM Services Prices Paid

The ISM Non-Manufacturing PMI released by the Institute for Supply Management (ISM) shows business conditions in the US non-manufacturing sector, taking into account expectations for future production, new orders, inventories, employment and deliveries. It is a significant indicator of the overall economic condition in the US. The ISM Prices Paid represents business sentiment regarding future inflation. A high reading is seen as positive for the USD, while a low reading is seen as negative.

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