- EUR/USD turns positive around 1.1730 as the US Dollar gives back early gains.
- Iran prepares to reopen the Hormuz if the US lifts the blockade on Iranian sea ports.
- Investors await the Fed-ECB monetary policy announcements.
The EUR/USD pair claws back its early losses and turns positive around 1.1730 during the Asian trading session on Monday. The major currency pair gains as the US Dollar (USD) turns upside down.
During the press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.06% lower to near 98.45. The USD Index opened significantly higher around 99.35 as the United States (US) canceled a visit to Islamabad for another round of peace talks with Iran, despite Iran’s foreign minister Seyed Abbas Araghchi visiting Pakistan to resume talks.
Meanwhile, Iran has offered a new proposal to the US to reopen the Strait of Hormuz and end the war that includes putting off nuclear negotiations, according to Axios, Bloomberg reported. The report shows that nuclear talks would come later, only after a US blockade of the Strait of Hormuz were lifted. This indicated Iran’s readiness to end the almost two-month-long conflicts in the Middle East.
This week, investors brace for high volatility in the major currency pair as both the Federal Reserve (Fed) and the European Central Bank (ECB) are scheduled to announce monetary policies on Wednesday and Thursday, respectively.
EUR/USD technical analysis
EUR/USD trades marginally higher at around 1.1730 as of writing. The pair holds a constructive near-term bias as it trades above the 20-day exponential moving average (EMA) at 1.1696, suggesting buyers retain control after reclaiming this dynamic support.
The Relative Strength Index (RSI) at 54.9 sits moderately above the 50 line, hinting at firm but not overstretched bullish momentum as price pushes deeper into the upper half of the recent Fibonacci retracement grid.
On the topside, immediate resistance emerges at the 50.0% Fibonacci retracement at 1.1749; a sustained break higher would expose the 61.8% retracement at 1.1828, followed by 1.1941 and the cycle high region near 1.2085. On the downside, initial support is provided by the 20-day EMA at 1.1696, with additional protection at the 38.2% Fibonacci level at 1.1670; a deeper pullback would bring the 23.6% retracement at 1.1572 into view ahead of the structural floor around 1.1413.
