Key Takeaways
EUR/USD is trading around 1.1550 to 1.1555 on Monday, after printing an intraday range of roughly 1.1506 to 1.1569. The pair has recovered from last Monday’s 1.1466 close, but it is still sitting in the middle of a broader recovery band rather than in a decisive breakout.
The short term technical picture has improved. The latest daily snapshot shows RSI at 60.876, MACD at 0.001, ADX at 33.058, and ATR at 0.0014, which points to firmer momentum with volatility still elevated.
Price is now above the key daily moving averages, with MA50 at 1.1532, MA100 at 1.1545, and MA200 at 1.1536, while the Fibonacci pivot sits at 1.1553. That makes the current zone the main bull bear line for the start of the week.
Immediate resistance is clustered tightly at 1.1558, 1.1561, and 1.1566, with broader chart resistance at 1.1606, 1.1628, and 1.1640, which were the highs from April 2, April 1, and March 23.
Immediate support sits at 1.1548 to 1.1540, then 1.1505 to 1.1500, while a deeper loss of structure would reopen 1.1447 and then the broader 1.1400 area.
The dominant macro driver remains the Middle East energy shock. Reuters says the dollar is still benefiting from safe haven demand as markets watch Trump’s Tuesday deadline on reopening the Strait of Hormuz, even as ceasefire discussions offer intermittent relief.
Policy differentials still matter. The ECB deposit rate is 2.00%, while the Fed funds target range is 3.50% to 3.75%. Eurozone inflation rose to 2.5% in March from 1.9% in February, driven by energy, while the U.S. jobs report showed 178,000 payroll growth and 4.3% unemployment, reinforcing the case for a still restrictive Fed.
Market Dynamics and Recent Performance
EUR/USD starts the week firmer than it did at the end of March, having rebounded from the 1.1466 area on March 30 to around 1.1555 today. That rebound reflects two opposing forces. On one side, ceasefire talk has improved market mood and supported the euro. On the other, the dollar remains underpinned by strong U.S. labor data, higher oil prices, and the market’s assumption that the Fed will stay restrictive for longer. Reuters reported the euro at $1.1523 earlier on Monday as traders balanced ceasefire hopes against the risk of fresh escalation around Hormuz.
The result is a market that has stabilized, but not one that has fully reversed trend. Price has moved back above the major daily moving averages, which is constructive, yet it still has not cleared the recent swing highs at 1.1606, 1.1628, and 1.1640. Until those levels break on a closing basis, the recovery looks more like a rebuilding phase than a full bullish reversal.
Technical and Fundamental Influences
Technically, the balance has shifted from outright bearish to cautiously constructive. The pair is hovering almost exactly on the 1.1553 Fibonacci pivot, with RSI above 60 and MACD positive, while ADX above 33 suggests the move has directional strength rather than being a low conviction drift. The most important near term question is whether EUR/USD can hold above the pivot and convert it into support. If it does, the next upside tests are naturally 1.1566, then 1.1606, and then the more important 1.1628 to 1.1640 ceiling.
On the downside, the structure is still fragile enough that failure around the pivot could quickly turn the pair back lower. A break under 1.1540 would warn that the latest recovery is fading, while a move back through 1.1505 to 1.1500 would put the late March lows back in play. The deeper reference point remains 1.1447, and below that the broader market would start talking again about 1.1400.
Fundamentally, EUR/USD is being pulled between a euro area inflation problem and a U.S. rate problem. The ECB said on March 19 that the war in the Middle East creates upside risks for inflation and downside risks for growth, and that higher energy prices will materially affect near term inflation. Eurostat then showed euro area inflation jumping to 2.5% in March, with energy inflation at 4.9%. Reuters also reported that ECB policymaker Yannis Stournaras said on Monday that the policy response will depend on whether the energy shock proves temporary or persistent.
At the same time, the Fed kept rates at 3.50% to 3.75%, and the March U.S. jobs report came in stronger than expected at 178,000 payrolls with unemployment at 4.3%. Reuters reported that Citigroup has now pushed its expected start of Fed cuts back to September, which helps preserve the dollar’s rate advantage even when the euro catches short bursts of relief.
The euro area backdrop is also mixed rather than cleanly supportive. Reuters reported that euro zone manufacturing PMI rose to 51.6 in March, but business confidence slipped to a five month low, while German consumer sentiment fell to minus 28.0 for April as households worried about energy driven inflation. That combination supports the idea that the euro can rebound tactically, but still struggles to build a strong medium term bullish case while the energy shock hangs over growth.
Looking Forward
This week’s path for EUR/USD will likely be decided by two overlapping catalysts. The first is geopolitical: whether the Hormuz situation improves through a ceasefire framework or worsens after Trump’s Tuesday deadline. Reuters says markets remain highly sensitive to that binary outcome, because oil, inflation expectations, and rate pricing are all now tightly connected to the conflict.
The second is U.S. macro. Reuters says the market is focused on the April 10 CPI report, which is expected to show some of the first pass through from the oil shock, and on the Fed minutes this week for clues on how policymakers are thinking about inflation and risk. A hotter CPI print would likely support the dollar again. A softer inflation read, combined with geopolitical de escalation, would give EUR/USD a better chance of extending toward the 1.1600 to 1.1640 zone.
The cleanest framework is this: holding above 1.1553 keeps the short-term recovery alive and leaves room for a push into 1.1566 and then 1.1606. Failing back below 1.1540 would weaken the setup, while a break under 1.1500 would shift the balance back toward 1.1447 and possibly 1.1400. Right now, EUR/USD looks stronger than it did over the previous two Mondays, but the move is still vulnerable to both oil headlines and U.S. inflation risk.
