Key takeaways
- Pullback driven by geopolitical risk and USD strength: EUR/USD declined ~1.5% from its recent high as stalled US–Iran talks and rising oil prices boosted safe-haven demand for the US dollar.
- Macro backdrop turning supportive for euro: A steepening Eurozone–US rate differential suggests a relatively less dovish ECB versus the Fed, providing underlying support for EUR/USD.
- Technical setup points to potential rebound: Price is testing key support at 1.1665/1.1635 with bullish signals (trend above major MAs, RSI divergence, ascending channel), indicating a possible reversal unless support breaks.
The EUR/USD hit a recent two-month high of 1.1849 printed on last Friday, 17 April 2026, and turned soft due to the stalled second round of US-Iran peace talks, where it declined by 1.5% to hit a low of 1.1669 on Thursday, 23 April 2026.
Secondly, cracks have appeared in the extended ceasefire agreement, where both sides are using force to prevent oil tankers from transiting the Strait of Hormuz, which led to a 10% plus rally in oil prices, increasing the appeal of short-term safe haven demand status on the US dollar.
Interestingly, the EUR/USD’s five-day decline from its recent two-month high has reached an inflection area for a potential bullish reversal from a technical analysis and intermarket perspective.
Let’s uncover these factors in greater detail.
Eurozone/US implied interest rate policy curve spread has steepened
Fig. 1: Eurozone-US implied interest rate policy curve spread as of 23 Apr 2026 (Source: MacroMicro).
The monthly implied future policy interest rate curves for the Eurozone and the US are calculated using short-term interest rate futures that are highly sensitive to the expectations on these countries’ central banks’ monetary policies
The current Eurozone/US implied interest rate policy curve spread for the period from May 2026 to September 2026 has steepened from three months ago, with the current September 2026 reading standing at -1.32% compared to -1.37% three months ago (see Fig. 1).
These observations suggest that the ECB is likely to be less dovish or more hawkish than the Fed, which in turn could provide support for a potentially firmer EUR/USD.
Let’s now focus on the potential short-term trajectory (1 to 3 days) of EUR/USD.
EUR/USD – Minor uptrend phase from 13 March 2026 low remains intact
Fig. 2: EUR/USD minor trend as of 24 Apr 2026 (Source: TradingView).
Despite the five-day decline seen in the EUR/USD, its price actions are still trading above the 20-day, 50-day, and 200-day moving averages.
Watch the 1.1665/1635 key short-term pivotal support, and a clearance above 1.1722 (potential upside trigger) may see the next intermediate resistances coming in at 1.1790, 1.1835, and 1.1890 (also a Fibonacci extension) (see Fig. 2).
On the other hand, failure to hold at 1.1635 and an hourly close below it invalidates the bullish reversal scenario to see the continuation of the corrective decline to expose the next intermediate supports at 1.1575 and 1.1510.
Key elements to support the near-term bullish bias on EUR/USD
The five-day decline of the EUR/USD has reached the intersection area of the 20-day, 50-day, and 200-day moving averages, where the 20-day MA is now shaping an impending bullish crossover above the 50-day MA.
The price actions of the EUR/USD have continued to oscillate within its minor ascending channel in place since the 30 March 2026 low.
The hourly RSI momentum indicator has just shaped a bullish divergence condition at its oversold region on Thursday, 23 April 2026.
