Over the past 48 hours, the EUR/USD pair has experienced notable volatility amid escalating geopolitical tensions. Peace talks between the US and Iran in Pakistan abruptly collapsed, triggering a risk-off sentiment that weakened the euro against the dollar. The pair closed yesterday at 1.1688, down roughly 0.32% from the previous day. The dollar’s renewed strength was primarily driven by surging crude oil prices and increasing risk aversion tied to the deteriorating US-Iran conflict.

This sequence of events pushed investors toward the dollar as a safe haven asset. For the average investor, it’s akin to a sudden international crisis sparking panic in the markets, prompting a swift flight from higher-risk currencies like the euro toward the relative safety of the US dollar. Moving forward, any developments in the peace negotiations are likely to have an immediate and significant impact on EUR/USD prices, making it crucial for traders to monitor the evolving US-Iran situation closely and adapt their strategies accordingly.

Daily Chart

The daily chart shows EURUSD in a steady uptrend over recent weeks, trading above both the 50-day (1.16408) and 200-day (1.16765) moving averages, with a recent challenge of previous highs. The Bollinger Bands are tightening, indicating potential upcoming volatility. The MACD suggests bullish momentum is building but has yet to produce a clear golden cross, warning of possible short-term pullbacks. Overall, the daily trend remains cautiously bullish with potential to test the 1.18 key resistance level soon.

1H Chart

On the hourly chart, EURUSD has been range-bound between 1.166 and 1.172 over the past 3-5 days. The 50-period moving average is close to the 200-period, pointing to an unclear short-term trend. However, a mild bullish MACD crossover suggests a near-term rebound is possible. The 365 EMA on the 4-hour chart has served as strong dynamic support recently. Bollinger Bands are starting to widen, hinting at increased intraday volatility ahead. Day traders should monitor key levels closely for potential breakout trades.

Technical Trend:  EURUSD currently exhibits a cautiously bullish trend, characterized by stable upward movement but increasing volatility. Traders should expect choppy swings with a slight upward bias in the near term.

Technically, EURUSD is forming a potential bullish flag pattern that began developing in early April, suggesting continuation of the uptrend is likely. A recent daily bullish engulfing candle highlights renewed buying interest and raises the probability of a move towards the 1.1750 resistance level. MACD momentum is strengthening, though the monthly trend remains mixed, signaling caution for longer-term traders. Watch for Bollinger Band expansions signaling volatility surges and maintain attention on the critical moving average support levels.

There are no major Eurozone events today directly impacting EURUSD. However, the Polish Monetary Policy Council Minutes at 14:00 CET and ECB member de Guindos’s speech could influence market sentiment indirectly. The US will release March Existing Home Sales data at 16:00 CET; a stronger than expected print could support the dollar and put downward pressure on EURUSD. Overall, no direct significant events today, with focus likely on secondary news flow and market reactions.

Resistance & Support

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