EUR/USD Price Forecast: Recovery halts near 50% Fibo retracement at 1.1750
- EUR/USD rebounds to near 1.1700, but is still holding opening losses.
- The failure of US-Iran peace talks has prompted the risk-off mood.
- US President Trump announces the blockade of Iranian ports.
The EUR/USD pair recovers a majority of its opening losses, but is still 0.2% down to near 1.1700 during the late European trading session on Monday. The major currency pair is still under pressure as renewed geopolitical tensions have prompted a risk-off mood.
The S&P 500 is expected to open lower, considering weakness in futures overnight, reflecting weakness in investors’ risk appetite.
Middle East conflicts have revived as the first round of US-Iran talks has failed, following Tehran’s refusal to give up its nuclear ambitions.
Meanwhile, US President Donald Trump has announced that it will blockade Iranian ports, which will begin on April 13 at 10:00 AM ET, 14:00 GMT.
The risk-off market sentiment has improved the safe-haven demand of the US Dollar (USD). As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.2% higher around 99.00.
EUR/USD technical analysis
EUR/USD trades lower at around 1.1700 as of writing. The pair holds a constructive bullish bias as it trades above the 20-day exponential moving average (EMA) at 1.1611 and the 38.2% Fibonacci retracement at 1.1671 as nearby support. The Relative Strength Index (14) at 57.6 is comfortably above the neutral 50 line, hinting that upside momentum is building while remaining short of overbought territory.
On the topside, initial resistance is aligned with the 50.0% Fibonacci retracement at 1.1750, followed by the 61.8% level at 1.1830. Looking down, immediate support is seen at the 38.2% retracement at 1.1671, ahead of the 20-day EMA at 1.1611; a deeper pullback would expose the 23.6% retracement at 1.1572 and, if broken, the structural floor around 1.1413.
(The technical analysis of this story was written with the help of an AI tool.)
Euro FAQs
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%).
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.
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.
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.
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.