Euro upside attempts remain limited amid cautious markets

EUR/USD pares some losses on Monday, but remains capped below 1.1650.
Cautious markets amid high Oil prices are keeping Euro bulls subdued.
Analysts at UOB Bank see the pair's decline extending to 1.1570.

Guillermo Alcala FXStreet

The Euro (EUR) is ticking higher against the US Dollar (USD) on Monday, but remains below previous lows, now turned into resistance in the 1.1650-1.1670 area, after bouncing from near 1.1600 earlier in the day. The pair is shrugging off the dismal market sentiment, although high Oil prices are likely to keep upside attempts in check.

Comments by a spokesperson of the Iranian Foreign Ministry affirming that Washington and Tehran would be analysing a recent peace proposal sent by Pakistani mediators, lifted market sentiment on Monday and hurt demand for the safe-haven US Dollar. The same source also affirmed that Iranian and Omani technical teams discussed options to restore safe passage through Hormuz last week, which pushed Oil prices down from recent highs, providing some support for the Euro.

Previously, US President Donald Trump had warned that “the clock is ticking” on Tehran, after meeting its national security team and speaking with Israeli Prime Minister Benjamin Netanyahu to discuss options in Iran.

Analysts at UOB bank expect the pair to remain vulnerable, aiming for the 1.1570 area: "While the decline is oversold, strong downward momentum continues to suggest downside risk for EUR. From here, a clear break below 1.1600 will shift the focus to 1.1570. We will maintain our negative EUR view as long as it holds below the ‘strong resistance’ at 1.1685.”

Technical Analysis: A dead cat's bounce for the Euro

The EUR/USD is ticking up on Monday but maintains a bearish near-term tone with price holding below a dense band of horizontal resistance clustered between 1.1650 and 1.1675. The 4-hour Moving Average Convergence Divergence (MACD) remains in negative territory, hinting that downside pressure persists, while the Relative Strength Index (RSI) has bounced from deeply oversold readings, suggesting that sellers remain in control.

Upside attempts are likely to find resistance in the mentioned area above 1.1660, which held bears in April. Bulls would need to breach that area to ease negative pressure and aim for the May 14 high and May 8 and 12 lows in the area of 1.1720

On the downside, initial support emerges at session lows near 1.1610. Further down, there is no clear support before the early April lows between 1.1505 and 1.1525.

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

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

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