EUR/USD eased to about 1.1530 in Asian trade on Tuesday and stayed within Monday’s range. Markets are waiting for Iran’s final response to a US ceasefire proposal, due by Tuesday at 08:00 PM ET.
The US Dollar Index (DXY) was slightly higher near 100.10 at the time of reporting. An adviser to Iran’s parliament speaker said Trump had about 20 hours to surrender, and warned that US allies would return to the Paleolithic Age.
Key Events And Market Focus
Attention also turns to the Federal Open Market Committee minutes from the March meeting, due on Wednesday. The Fed left rates unchanged at 3.50%–3.75%.
Technically, EUR/USD is just below the 20-day EMA near 1.1560. The 14-day RSI sits in the mid-40s, pointing to mild downside momentum.
Resistance levels are 1.1560, then near 1.1600, and the 10 March high of 1.1666. Support is around 1.1470, with the next level near 1.1410.
The US dollar is the most traded currency and makes up over 88% of global FX turnover, or about $6.6 trillion per day (2022). US policy focuses on inflation at 2%, with QE often weakening the dollar and QT tending to support it.
April 2026 Market Backdrop
We are seeing the EUR/USD pair in a very different position now in April 2026 compared to the consolidation we saw around 1.1530 during the Trump administration’s standoff with Iran. Today, the pair is trading much lower, near 1.0750, driven less by a single deadline and more by a deep economic divergence. The core themes of geopolitical risk and central bank policy, however, remain the most important signals for us.
The main pressure on the euro comes from the clear difference in central bank policy, which has become more pronounced since we were analyzing the market in 2025. Recent data shows Eurozone inflation has fallen to 2.4%, giving the European Central Bank room to consider rate cuts, while the latest U.S. CPI print came in at a stubborn 3.5%. This policy gap is why the US Dollar Index is strong at 104.50, far from the 100 level seen in the past.
For derivative traders, this suggests that volatility may be mispriced, especially with ongoing geopolitical tensions in the Middle East and the approaching US election cycle. We recall how the market went sideways awaiting the Iran deadline; today, traders might consider buying straddles or strangles to profit from a potential sharp move in either direction once the market digests the next inflation reports. These strategies are beneficial in an environment where we expect a breakout but are uncertain of the timing or direction.
Given the strong US jobs report last month, which added over 300,000 jobs, the path of least resistance for EUR/USD appears to be downward. This favors strategies like buying put options to speculate on a move towards the 1.0700 support level, or selling EUR/USD futures for those with a more bearish conviction. The technical picture from the past, with resistance at 1.1600, is a distant memory as we now watch to see if sellers can push the pair below key psychological levels.
Looking back at history, we’ve seen the Federal Reserve hold rates steady for long periods when inflation proves persistent, much like the 3.50%-3.75% range mentioned in the 2025 analysis. That historical tendency supports the view that the Fed will not rush to cut rates, providing a fundamental reason for continued dollar strength in the coming weeks. Therefore, any rallies in the EUR/USD are likely to be viewed as selling opportunities.
