rose sharply midweek to 1.1675, hitting a four-week high. The pressure on the US dollar came after President Donald Trump postponed the threat of attacks on Iranian civilian infrastructure for two weeks. The politician called this a “bilateral ceasefire” conditional on the reopening of the Strait of Hormuz.
According to Trump, the United States received a 10-point proposal from Iran, which is considered a working basis for negotiations. The two-week period could be used to reach a resolution. Iran has reportedly agreed to temporarily open the strait, provided the attacks stop. Israel has also supported the ceasefire.
At the same time, macroeconomic data points to rising inflation expectations in the United States. In March they increased, with a marked increase in transportation costs in logistics.
Investors' attention is now focused on the release of March inflation data (CPI), which could clarify the degree of pressure on prices amid the ongoing conflict.
Technical analysis
On the EUR/USD H4 chart, the market is forming a consolidation range around the 1.1700 level. A downward wave is expected to 1.1566 as a local target. Subsequently, a bullish movement is anticipated until 1.1717. Technically, this scenario is confirmed by the MACD indicator, with its signal line above zero and pointing firmly upward, indicating continued bullish momentum and the possibility of the uptrend continuing.
According to the H1 chart, the market is forming the structure of the next downward wave to the level of 1.1566. After reaching this level, a rise to 1.1717 is expected, with the possibility of the bullish movement extending to 1.1730. Technically, this scenario is confirmed by the stochastic oscillator, with its signal line below 80 and pointing firmly towards 20.
Conclusion
EUR/USD has risen on news of a possible escalation in tensions in the Middle East, with Trump postponing attacks on Iranian infrastructure and a two-week “bilateral ceasefire” coming into force, conditional on the reopening of the Strait of Hormuz. The 10-point proposal and Iran's deal to temporarily open the strait have provided a significant boost to risk appetite, weighing on the safe-haven dollar.
However, rising inflation expectations in the United States and the upcoming CPI release remind markets that domestic price pressures remain a concern. While technical indicators suggest some consolidation or pullback in the short term, the direction of the pair will ultimately depend on whether diplomatic efforts are sustained and whether the ceasefire translates into a more lasting drawdown.
By RoboForex Analysis Department
Disclaimer:
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
