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09/04/26
20
EUR/USD Consolidates Amid Dovish Fed and Geopolitical Tensions
The EUR/USD currency pair remained relatively range-bound during the Asian trading session, hampered by mixed market signals and subdued investor activity. The strength of the US dollar continues to be moderated by the Federal Reserve’s dovish stance, which underlines the possibility of only one interest rate cut this year if inflation trends meet expectations. This cautious outlook from the Fed curtails the dollar’s upward momentum, providing some support to EUR/USD, especially as traders remain wary of broader geopolitical tensions.
Further influencing the pair is the fragile US-Iran ceasefire, which introduces uncertainty and maintains a risk-averse environment. The temporary slowdown in geopolitical tensions favors the safe-haven appeal of the US dollar, capping the potential upside momentum for the euro against the dollar. Consequently, despite a modest attempt to recover from recent lows, the pair struggles to establish a clear directional bias.
On technical grounds, the recent failure to sustain gains beyond the resistance zone near 1.1670—a confluence level involving the 200-day simple moving average and the 38.2% Fibonacci retracement of recent declines—serves as a warning for bullish traders. Although momentum indicators like the RSI hover around the mid-50s and the MACD remains positive, these signals suggest that the prevailing downward pressure is waning rather than signaling a firm reversal.
Traders are advised to wait for confirmation of a sustained break above the 1.1670 resistance and the psychological 1.1700 level before targeting higher levels. Potential resistance levels include the 50% Fibonacci retracement at 1.1747, the 61.8% retracement at 1.1827, and subsequent targets near 1.1941 and 1.2086. On the downside, initial support is found at the 23.6% Fibonacci level around 1.1568, with a deeper correction potentially exposing the recent cycle lows near 1.1409.
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