Financial markets opened the week with a cautious tone as geopolitical tensions escalated in the Strait of Hormuz. US President Donald Trump announced a military operation to free neutral vessels stranded in the waterway, warning that any interference would be met with forceful action. In response, Iran's military stated it would attack US forces if they attempted to enter or approach the Strait, considering such actions a violation of the ceasefire. Additionally, the US reportedly rejected Iran's 14-point peace plan, according to Israel's KanNews, with President Trump deeming the proposal unacceptable [2].
Against this backdrop, the Euro (EUR) started the week on a soft note versus the British Pound (GBP), with EUR/GBP showing moderate losses. The pair failed to recover above the previous support at 0.8640, leaving the year-to-date low at 0.8611 exposed. Technical indicators remain bearish, with the Relative Strength Index (RSI) around 38 and the MACD histogram fluctuating near the zero line, signaling weak demand and sluggish momentum. If the pair fails to recover above 0.8640, the next downside target is the August 2025 low at 0.8596. On the upside, a move above 0.8640 would shift focus to the April 27 and 28 lows around 0.8655 and the April 24 high near 0.8685 [1].
Currency heat maps from both sources show the Euro and US Dollar posting minor changes against major peers. The Euro was the strongest against the Australian Dollar, while the US Dollar also showed strength against the Australian Dollar. The US Dollar Index remained steady above 98.00 after moderate losses the previous week, and US stock index futures traded mixed, reflecting ongoing market uncertainty [1][2].
The European economic calendar is light, with attention on the final HCOB Manufacturing PMI and the Sentix Investor Confidence Index. Market participants are also awaiting US March Factory Orders data and comments from Federal Reserve policymakers later in the day [1][2].
CONCLUSION
Geopolitical tensions in the Strait of Hormuz have contributed to a cautious market mood, with EUR/GBP remaining under pressure and technical indicators signaling further downside risk. Both the Euro and US Dollar are showing only minor moves against major currencies, and investors are closely monitoring upcoming economic data and central bank commentary for further direction.