The euro (EUR) on Tuesday reversed the rebound against the US dollar (USD) seen over the last two trading days and remains just below 1.1700 heading into the US session open. The safe-haven US dollar is gaining momentum and markets are becoming more cautious in anticipation of central bank decisions and US President Donald Trump’s negative reaction to Tehran’s latest peace proposal.
The Federal Reserve (Fed) will likely leave interest rates unchanged in the 3.50%-3.75% range on Wednesday, in what should be Jerome Powell’s last meeting as bank president. Sen. Thom Tillis withdrew his block on the nomination of former Gov. Kevin Warsh as the next chairman, setting the stage for Powell’s replacement in May.
On Thursday, the focus will be on the European Central Bank (ECB). ECB officials have already shown a willingness to raise interest rates this year, but they may prefer to wait for a more complete assessment of the economic impact of the war in Iran. Investors expect a hawkish stance this week, pointing to a rate hike in June or July.
Meanwhile, the conflict in the Middle East remains at a standstill. A Reuters report, citing a US official, confirms that Trump did not like Iran’s peace plan because it does not address the nuclear issue. This maintains a high degree of uncertainty with the Strait of Hormuz closed and the price of Brent crude well above $100, increasing pressure on oil-importing eurozone economies and weighing on the euro.
Technical Analysis: Bears will encounter forceful support below 1.1675
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EUR/USD’s recovery attempts were rejected on Monday with former trendline support now turning into resistance, and a break through the 1.1700 level on Tuesday confirmed the bearish bias.
Technical indicators are also pointing lower. The relative strength index (RSI) on the 4-hour chart is hovering around a high of 30, which indicates an increasing bearish momentum, and the moving average divergence (MACD) line is trying to cross below the signal line, which is another bearish signal.
However, bears will likely be at risk in the area between the April 12 and 13 lows at around 1.1675 and the April 9 low at 1.1650. Further down, the next target is the April low, between 1.1505 and 1.1525.
On the other hand, the session high at 1.1727 and the confluence of the reverse trend line with the April 22 high near 1.1760 are likely to maintain the bearish structure. A bounce above these levels would focus attention on the April 20 highs near 1.1790.
(The technical analysis for this story was written with the support of an AI tool.)
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