EUR/USD was marginally lower near 1.1530 in Asian trading on Tuesday and stayed inside Monday’s range. The pair moved sideways as markets awaited Iran’s decision on a US ceasefire proposal due by Tuesday at 08:00 PM ET.
The US Dollar Index (DXY) was slightly higher near 100.10. The report also referenced comments from an adviser to Iran’s Parliament Speaker Mohammad Bagher Ghalibaf ahead of the deadline.
Key Event Risk Focus
Attention also turned to US data, with the FOMC minutes from the March meeting due on Wednesday. In that meeting, the Federal Reserve kept interest rates unchanged at 3.50%–3.75%.
In technical terms, EUR/USD traded just below the 20-day EMA near 1.1560. The 14-day RSI sat in the mid-40s, pointing to mild downside momentum within consolidation.
Resistance stands at 1.1560, then near 1.1600, and at the March 10 high of 1.1666. Support is seen around 1.1470, with a break lower bringing 1.1410 into view.
The technical section was produced with assistance from an AI tool.
Market Context Shift
Looking back to 2025, we saw the market consolidate around 1.1530 as traders awaited geopolitical outcomes from Washington and Tehran. That period of sideways movement was a lesson in how headline risk can freeze a market. Today, the dynamic is entirely different, with the pair trading much lower near 1.0750, driven by fundamental economic divergence rather than a specific political deadline.
The US dollar remains strong, underpinned by a hawkish Federal Reserve holding rates in the 4.75%-5.00% range to combat persistent price pressures. Recent data confirms this, with the latest March Consumer Price Index (CPI) coming in slightly above expectations at 3.1% year-over-year. This has solidified market expectations that the Fed will not be cutting rates in the near future, keeping the greenback well-supported.
Meanwhile, the Eurozone economy is showing signs of stagnation, with recent GDP figures for the last quarter indicating only 0.2% growth. Although Eurozone inflation is also sticky at 2.8%, the European Central Bank has less room to be aggressive on rates given the weak growth outlook. This policy divergence between the Fed and the ECB is the primary driver weighing on the EUR/USD.
Given this clear fundamental downtrend, derivative traders should consider strategies that benefit from further downside or increased volatility. Buying put options on the EUR/USD offers a direct bearish position with a defined risk. For a more cautious approach, a bear put spread could be used to lower the upfront cost while still profiting from a move down toward key support levels.
The key technical levels we are watching now are vastly different from those in 2025. Immediate resistance sits at the 1.0800 psychological level, with the 50-day moving average near 1.0850 acting as a more significant ceiling. On the downside, a break of the recent low at 1.0710 would open the door to testing the year-to-date low around 1.0650 in the coming weeks.
Traders should monitor the upcoming US Non-Farm Payrolls report and the latest ZEW Economic Sentiment figures out of Germany. Any signs of persistent US labor market strength or further deterioration in European sentiment will likely accelerate the pair’s downward trajectory. We see rallies back towards the 1.0800 level as opportunities to initiate or add to short positions.
