The Euro (EUR) strengthened against the US Dollar (USD) on Thursday, trading just above 1.1800 and extending its rally to nine consecutive days, driven by optimism surrounding potential new negotiations between the US and Iran [1]. This shift in sentiment led investors to move away from the safe-haven Dollar, pushing the EUR/USD pair back to levels seen before recent geopolitical tensions [1].
US President Donald Trump confirmed that indirect negotiations with Tehran are ongoing and indicated in an interview that peace talks could resume in the coming days [1]. Additionally, Trump stated that Israel and Lebanon are set to begin direct talks soon, which he believes could help pave the way for a stable peace agreement with Iran [1].
Market sentiment was further influenced by President Trump's renewed criticism of Federal Reserve Chair Jerome Powell, raising concerns about the central bank's independence. Trump threatened to remove Powell from his seat on the Board of Governors if he does not step down at the end of his term as Fed Chair on May 15, although Powell's term on the Board extends until 2028 [1]. This political uncertainty added pressure on the USD [1].
From a technical perspective, EUR/USD maintains a constructive near-term outlook, with the Relative Strength Index (RSI) in bullish territory near 66, though the MACD has turned slightly negative [1]. Bulls are encountering resistance at 1.1825, with further upside targets at the February 10 and 11 highs near 1.1930. On the downside, initial support lies just above 1.1770, with further support between 1.1720 and 1.1740, and a breach of 1.1650 could challenge the current bullish trend [1].
CONCLUSION
The EUR/USD pair's rise above 1.1800 reflects market optimism over potential US-Iran peace talks and political developments in the US. While technical indicators show a bullish bias, resistance levels and political uncertainty around the Federal Reserve could influence future moves. Investors are closely watching for further developments in negotiations and US monetary policy.