EUR/USD extended its gains on Monday, trading at 1.1757, up 0.32%, as the US Dollar weakened to a six-week low near 98.36 on the US Dollar Index (DXY), which was down 0.29% at 98.36 [1]. The improved market mood and renewed hopes for a truce in the Middle East provided support for the Euro, with sentiment poised to test the 1.1800 figure in the near term [1]. Negotiations between the US and Iran in Pakistan lasted 21 hours, achieving some progress, but Iran remained reluctant to abandon its nuclear program and control of the Strait of Hormuz. In response, the White House imposed a blockade in the Strait of Hormuz, escalating tensions [1]. US President Donald Trump stated that Tehran wants to make a deal, and a New York Post report suggested Iran was considering halting its Uranium enrichment program as a US condition for ending the war [1].
The EUR/USD pair jumped following these developments, with the US Dollar Index reflecting the currency's weakness against six major currencies [1]. US economic data also influenced the market, as Existing Home Sales fell to a nine-month low of 3.98 million in March, down 3.6% month-over-month [1]. In Europe, the Euro received additional support from Hungarian elections, where Peter Magyar won a landslide victory, promising to restore democratic standards after 16 years of Viktor Orban's rule [1].
ECB Vice President Luis de Guindos commented that the impact of the Middle East conflict will depend on its duration, while ECB’s Vujcic noted that energy prices remain within the ECB’s baseline scenario [1]. Traders are now focused on upcoming US data releases, including the Producer Price Index (PPI) for March, the ADP Employment Change 4-week average, and speeches from several Fed officials. In Europe, speeches by ECB Chief Economist Philip Lane and Mario Cipollone are anticipated [1].
From a technical perspective, EUR/USD trades above the triple simple moving average cluster at 1.1674, maintaining a bullish near-term bias. The Relative Strength Index (14) stands at 62.6, indicating buyers retain control with room for further gains before conditions become stretched. Initial support is found at the 1.17 area, reinforced by the convergence of the 50/100/200-day simple moving averages around 1.1674 [1].
CONCLUSION
EUR/USD has rallied on improved sentiment, geopolitical developments, and weak US economic data, pushing the US Dollar to a six-week low. The Euro is further supported by political changes in Hungary and stable energy prices within the ECB’s baseline scenario. Market participants are now awaiting key US and European economic data and central bank commentary for further direction.