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Trade of The Day – EUR/USD

Facts:

  • The EUR/USD exchange rate failed to break above the 200-day EMA
  • The price remains below the 50-, 100-, and 200-day exponential moving averages (EMA)

Recommendation: 

Trade: Short position on the EUR/USD pair at market price

Take Profit 1: 1,14850

Take Profit 2: 1,14240

Stop: 1.16415
 

Opinion:

The EUR/USD pair failed to break above the 200-day exponential moving average (EMA), which is a key technical signal confirming the euro’s continued weakness against the dollar. The price remains below the 50-, 100-, and 200-day EMAs, creating a classic bearish pattern—each of these moving averages currently acts as dynamic resistance, pushing the price back down on subsequent attempts to rebound. A stop-loss set at 1.16415 marks the zone where this pattern would be negated and would force a revision of the scenario.

Fundamental and geopolitical context

Iran’s rejection of the U.S. peace plan signals that tensions in the Middle East may persist for much longer than the market had originally anticipated. Such a scenario favors a steady inflow of capital into the dollar, a traditional safe-haven currency, and growing geopolitical uncertainty, combined with expectations of a return of inflationary pressure, creates solid foundations for a medium-term appreciation of the USD. Although the scale of the recent USD strengthening remains relatively moderate, historical analogies suggest that in similar, multi-vector crises, the dollar has tended to strengthen further.

Methodology and assumptions:


This recommendation is based on a technical analysis of the EURUSD chart. Classical technical analysis was used to assess the situation and analyze the trend. The target level—take profit 1—was set at the level of previous price reactions, using price action methodology. Take profit 2, on the other hand, is based on the location of this month’s local low. The protective stop-loss order was set above the most recent local high using price action methodology.

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EUR/GBP holds above 0.8650 as hawkish ECB comments support the Euro

  • The Euro regains ground against the Pound Sterling on Thursday, with the cross returning to the upper range of the 0.8600s.
  • EUR/GBP edges up following hawkish comments from ECB’s Nagel.
  • From a wider perspective, the cross remains sideways, with both currencies weighed by risk aversion.

The Euro (EUR) edges up slightly against the British Pound (GBP) on Thursday, yet moving within previous ranges, following downbeat German consumer confidence figures and hawkish comments by European Central Bank (ECB) member and Bundesbank President Joachim Nagel.

Nagel said earlier on Thursday that an interest rate hike in April will be an option at next month’s ECB meeting “if the war in the Middle East raises the spectre of an inflation surge in the Eurozone”.

These comments follow Wednesday’s remarks by ECB President Christine Lagarde, who affirmed that the central bank will have to respond “in a forceful pr persistent way” if consumer inflation looks set to be well above the bank’s 2% target. 

Higher borrowing costs might derail recovery

The prospect of higher interest rates amid sluggish economic growth in the region’s leading economies is keeping investors wary, weighing on demand for the common currency.

On Thursday, the German GfK Index showed that consumer confidence is expected to plunge to -28 in April from -24.8 in March. Data from Wednesday showed that the German IFO Business Climate deteriorated too, albeit less than expected, while the PMI survey underscored that the rise in energy prices could easily derail a tame economic recovery.

The Pound Sterling (GBP), however, is not faring much better, which keeps the cross in a choppy, sideways trading cycle. UK inflation data revealed that consumer prices remained at 3%, even before the start of the war, which has boosted market expectations that the Bank of England will be forced to hike rates more than once this year.

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EUR/USD under pressure as Iran pushes back against US ceasefire proposal

  • EUR/USD remains on the defensive as the US Dollar stays firm amid mixed US-Iran ceasefire signals.
  • Iran pushes back against US peace proposals, limiting ceasefire hopes
  • Oil-driven inflation concerns boost ECB rate hike bets while the Fed is seen holding rates.

The Euro (EUR) trades under pressure against the US Dollar (USD) on Wednesday, as the Greenback remains well supported amid conflicting headlines surrounding US-Iran ceasefire efforts. While Washington is pushing for a diplomatic breakthrough, uncertainty over Tehran’s response continues to underpin demand for the safe-haven Greenback.

At the time of writing, EUR/USD is trading around 1.1585, down about 0.20% on the day. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is 99.40 after marking an intraday low of 99.07.

Iran signaled little willingness to align with US-led proposals, with state-linked media Press TV reporting that Tehran will end the conflict strictly on its own terms. A senior political-security official said Iran “will not allow Trump to dictate the timing of the war’s end,” adding that any resolution would only come when Iran’s conditions are met.

Iran has set clear conditions for any deal. These include a full stop to attacks and assassinations, guarantees the war will not restart, payment for war damages, an end to fighting across all regional fronts, and recognition of its control over the Strait of Hormuz.

This comes after the United States reportedly proposed a 15-point plan, including a one-month ceasefire to kick-start negotiations. The proposal is said to involve curbs on Iran’s nuclear program and guarantees to keep the Strait of Hormuz open in exchange for potential sanctions relief.

The mixed signals from both sides suggest that a meaningful breakthrough remains unlikely in the near term, raising the risk of a prolonged conflict. This is keeping Oil-driven inflation concerns alive and complicating the policy outlook for major central banks.

Traders are now fully pricing in two rate hikes from the European Central Bank (ECB), while expectations for Federal Reserve (Fed) rate cuts this year have largely been priced out, with markets increasingly anticipating that the Fed will hold rates through 2026.

However, a Reuters poll published on Wednesday showed that 60 economists showed that 38 expect the ECB to keep its deposit rate at 2.00% this year, although 21 now see at least one rate hike in 2026.

Earlier in the day, ECB President Christine Lagarde said, “the ECB won’t act before it has sufficient information,” adding that “if the shock gives rise to a large though not-too-persistent overshoot of our target, some measured adjustment of policy could be warranted.” She also noted, “We must identify when higher energy costs risk spilling over into broad-based inflation.”

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Currency Talk – GBP/AUD AUD/NZD EUR/AUD

The Overbalance analysis aims to identify three financial instruments, analyzed primarily on the daily/four-hour (D1/H4) timeframe. The analysis uses only the Overbalance methodology, which helps determine where a trend may continue or where it may reverse.
Today’s analysis covers three instruments, evaluated solely in terms of 1:1 correction structures.

GBPAUD
Since last November, the GBPAUD currency pair has been trading in a downtrend; however, in mid-March, the upper boundary of the broad 1:1 pattern was broken at the 1.8990 level, which may indicate a shift in sentiment toward an uptrend. Currently, the 1.8975 level should be considered key short-term support, as it marks the lower boundary of the local 1:1 bullish pattern. According to the Overbalance methodology, as long as this level holds, further expansion of the upward movement is possible. Conversely, a drop back below 1.8990 could signal a resumption of the downward trend.

GBPAUD – H4 timeframe. Source: xStation

AUDNZD
The AUDNZD exchange rate has been in an uptrend since April of last year. Due to the prolonged period without a major correction, the recent downward move is similar in magnitude to previous corrections, allowing us to identify support at the 1.1730 level, where the lower boundary of the 1:1 pattern is located. According to the Overbalance methodology, as long as this level holds, the uptrend remains in effect.

AUDNZD – H4 timeframe. Source: xStation

EURAUD
Since last October, the EURAUD pair has been trading in a downtrend; however, in recent days, the 1.6545 level has been broken, which may suggest the start of an upward correction or even a trend reversal. According to the Overbalance methodology, as long as the price remains above this level, the base case scenario remains a continuation of the uptrend. Conversely, a return below 1.6545, as well as a break below the 1.6506 level—where the lower boundary of the local 1:1 uptrend pattern lies—could signal a return to the downtrend. For now, the base case remains an upward correction.

EURAUD – H4 timeframe. Source: xStation

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EUR/USD slips below 1.1600 as Middle East tensions escalate

  • EUR/USD weakens after fresh Israeli strikes hit Tehran.
  • President Trump announced a five-day truce following productive talks with Iran.
  • Iran’s Foreign Minister Abbas Araghchi denied any direct talks with Washington.

EUR/USD loses ground after registering modest gains in the previous session, trading around 1.1590 during the Asian hours on Tuesday. The pair depreciates as the US Dollar (USD) gains on increased risk aversion amid escalating Middle East conflict.

The Guardian reported on Tuesday that the Israeli military noted that it had launched a fresh wave of strikes on Tehran. This action came after US President Donald Trump signalled a pause in US attacks against energy infrastructure after what he said were productive talks with Iran. The Israeli Defense Forces (IDF) stated that it would continue operations in line with Israeli government directives until told otherwise.

Iran’s Foreign Minister, Abbas Araghchi, stated that there was “no dialogue” between Tehran and Washington. Meanwhile, Iranian Parliament Speaker Mohammad Bagher Ghalibaf said in a social media post on Monday that “no negotiations have been held with the US.” Mohsen Rezaei, the senior military adviser to Iranian Supreme Leader Mojtaba Khamenei, said that the war will continue until Iran receives full compensation for the damage it has sustained.

Reuters reported on Monday that San Francisco Federal Reserve Bank President Mary Daly said that unless the Iran conflict resolves quickly and the central bank can simply “look through” a temporary increase in oil prices, it is not clear what the next move on interest rates will need to be.

Rising oil prices are fueling inflation concerns and strengthening the European Central Bank’s (ECB) hawkish stance. The ECB left rates unchanged at last week’s meeting, citing the Iran conflict as a source of “significantly more uncertain” outlook.

Officials pointed to increasing inflation risks alongside weaker growth prospects, leading markets to boost expectations of potential rate hikes later this year. Policymakers are scheduled to speak on Monday, and any hawkish signals could provide support to the Euro.