EUR/USD Price Forecast: 61.8% Fibo retracement at 1.1825 remains key barrier

EUR/USD trades calmly at around 1.1745 while the US-Iran ceasefire extension keeps the US Dollar under slight pressure.
US President Trump holds off on attacks on Iran until it receives a unified proposal.
EUR/USD continues to face pressure near the 61.8% Fibo retracement around 1.1825.

Sagar Dua FXStreet

The EUR/USD pair trades flat at around 1.1745 during the European trading session on Wednesday. The major currency pair consolidates while the US Dollar (USD) edges lower amid hopes of a prolonged standoff between the United States (US) and Iran.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is marginally down to near 98.30.

The announcement of the ceasefire extension by United States (US) President Donald Trump with Iran has diminished the safe-haven demand of the US Dollar.

Late Tuesday, US President Donald Trump announced the extension of the ceasefire for an indefinite period, through a post on Truth Social, stating that the military department will hold their attacks on Iran until Washington receives a unified proposal.

Going forward, the major trigger for the Euro (EUR) will be the European Central Bank’s (ECB) monetary policy announcement on April 30.

EUR/USD technical analysis

EUR/USD trades flat at around 1.1745, holding a constructive bullish bias as spot remains above the 20-period exponential moving average (EMA) at 1.1694 and the 50% Fibonacci retracement of the latest swing at 1.1745.

The Relative Strength Index (14) at around 57 stays comfortably in positive territory, suggesting persistent upside momentum while leaving room before any overbought conditions emerge.

On the topside, immediate resistance is aligned at the 61.8% Fibonacci retracement near 1.1825, followed by the 78.6% retracement at 1.1938, with the cycle high at 1.2082 acting as a more distant bullish target. On the downside, initial support is seen at the 20-period EMA at 1.1694; a downside move below the average would lead to a deeper pullback towards the 38.2% retracement at 1.1666, while 1.1567 and 1.1408 remain more remote downside levels within the broader bullish structure.

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

Euro FAQs

What is the Euro?

The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

What is the ECB and how does it impact the Euro?

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

How does inflation data impact the value of the Euro?

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

How does economic data influence the value of the Euro?

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

How does the Trade Balance impact the Euro?

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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