EUR/USD fell about 0.17% in the North American session, trading near 1.1684 after a daily high of 1.1720. The move came as the US-Iran conflict showed little progress and US data pointed to firm activity.
High energy prices supported the US Dollar, with WTI up 0.27% and the US Dollar Index at 98.66. The 10-year US Treasury yield rose 5 basis points to 4.398%.
Us Iran Conflict And Dollar Support
Donald Trump urged Iran to sign a deal as the US Navy prepared for an extended blockade of Iranian ports. Talks have stalled.
US Core Durable Goods Orders rose 3.3% in March after 1.6% in February, above a 0.6% forecast. Headline goods orders improved from -1.2% year-on-year to 0.8%, above a 0.5% forecast.
Germany’s HICP rose from 2.8% to 2.9% year-on-year, below a 3% estimate. Monthly HICP fell from 1.2% to 0.5%, versus a 0.8% forecast.
The Federal Reserve is expected to keep rates at 3.50%–3.75%, while the ECB is also seen holding steady. Money markets price three basis points of ECB hikes later this year.
Technical Levels And Market Pricing
Technically, EUR/USD sat near 1.1690, above triple SMAs around 1.1649, with resistance near 1.1760 and 1.1800; RSI was about 50.4.
Looking back at the situation in 2025, we saw a strengthening dollar fueled by high energy prices and rising US Treasury yields. The EUR/USD pair was hovering near 1.17, under pressure from a robust American economy and geopolitical risks related to Iran. The market was bracing for key meetings from both the Federal Reserve and the European Central Bank.
Since that time, the economic divergence we saw starting then has only widened. The US economy posted an annualized growth of 1.8% in the first quarter of 2026, outpacing the Eurozone’s sluggish 0.4% growth during the same period. This continued outperformance reinforces the fundamental case for a stronger dollar against the euro.
The Federal Reserve did begin a cautious cutting cycle in late 2025, but recent data has put a pause on further action. US inflation for March 2026 came in at a sticky 3.4%, well above the Fed’s target and forcing markets to price out any further rate cuts until at least the third quarter. This policy stalemate is keeping US interest rates relatively high and attractive for global investors.
Given this backdrop, traders should consider buying EUR/USD put options to hedge against or speculate on further downside. A break below the year-to-date low of 1.1400 seems increasingly likely if the Fed maintains its cautious tone. Options with a strike price around 1.1300 expiring in the next six to eight weeks offer a defined-risk way to position for this move.
Implied volatility for the pair remains moderate, suggesting that options are not overly expensive ahead of the next central bank meetings. This environment could be favorable for establishing long volatility strategies, such as a straddle, to profit from a significant price move in either direction. Any surprise from the Fed or ECB could easily break the pair out of its recent trading range.
The interest rate differential between the US and the Eurozone continues to favor short EUR/USD positions through the carry trade. As we’ve seen historically when US rates are significantly higher, it is profitable simply to hold dollars over euros. This dynamic creates a persistent, underlying selling pressure on the currency pair.
The key technical levels from 2025 are also important to watch, but in reverse. The former support around 1.1650 has now become a formidable ceiling of resistance on any potential rallies. A failure to reclaim that zone would confirm the dominant bearish trend is still firmly in place.
