US-Iran Conflict Truce Sparks Four-Week Euro High Amid Inflation Watch Abstract

Summary:

U.S. President Donald Trump announced a two-week delay in strikes on Iran's civilian infrastructure, framing it as a "bilateral ceasefire" contingent on the reopening of the Strait of Hormuz. The U.S. has received Iran's 10-point proposal, seen as a basis for negotiations, with Iran agreeing to temporarily reopen the Strait in exchange for halted U.S. attacks. Israel has expressed support for the truce. Meanwhile, rising U.S. logistics costs in March have fueled inflation expectations, with markets now focused on upcoming March CPI data.

SELL EURUSD

EXP

TRADING

1.16839

Entry Price

1.15000

1.20290

1.16631 +0.00672 +0.58%

0.0

Pips

Flat

1.15000

Exit Price

1.16839

Entry Price

1.20290

Fundamental

The EURUSD pair surged strongly on Wednesday, breaking through the 1.1668 level to hit a four-week high. This rally was driven by a dramatic shift in geopolitical tensions: President Trump announced late Tuesday a two-week delay in planned strikes on Iran's civilian infrastructure, immediately pressuring the U.S. dollar and boosting the euro.

Trump characterized the delay as a "bilateral ceasefire," but set a clear condition: the Strait of Hormuz must reopen. He revealed the U.S. had received Iran's 10-point proposal, which serves as a foundational framework for negotiations. The two-week window is widely viewed as a buffer for diplomatic efforts to reach a resolution. Subsequent reports confirmed Iran has agreed to temporarily reopen the Strait, conditional on the U.S. halting attacks. Notably, regional power Israel also backed the ceasefire, adding critical momentum to de-escalation.

As geopolitical tensions eased, U.S. economic data signaled mounting inflation expectations. March saw a significant rise in logistics and transportation costs, amplifying concerns about upward inflation pressure. As a key link in industrial chains, higher transportation costs typically pass through to consumer prices, driving overall inflation.

Global investors now focus on upcoming U.S. March Consumer Price Index (CPI) data. Against the backdrop of ongoing Middle East tensions, this data will reflect the actual extent of price pressures, influencing market expectations for Federal Reserve monetary policy and guiding EURUSD's future trajectory. If inflation exceeds expectations, the Fed may accelerate policy tightening, supporting the dollar; conversely, moderate inflation could sustain loose policy, favoring continued euro strength.

US-Iran Conflict Truce Sparks Four-Week Euro High Amid Inflation Watch Abstract_1

Technical Analysis

The EURUSD pair has rallied sharply, breaking through the key resistance level of 1.1668—coinciding with the 38.2% Fibonacci retracement of the decline from the 1.2080 high to the 1.1408 low. This breakout confirms the downtrend from 1.2080 has concluded at 1.1408, marking the start of a new uptrend.

Technical indicators reinforce this bullish outlook: the pair has strongly broken above the 55-day moving average, providing solid support for further gains. As a key medium-term trend indicator, breaking the 55-day moving average typically signals dominant bullish momentum and sufficient upside potential.

Intraday, EURUSD has returned to an upward trajectory, targeting the next resistance at 1.1825—the 61.8% Fibonacci retracement of the 1.2081-1.1408 decline. A decisive break above 1.1825 would open the path to retest the previous high at 1.2082 and potentially higher levels.

However, the market must monitor support levels closely. The 1.1503 level is critical; as long as it holds, any pullback will be seen as a technical correction within the uptrend. A breach of 1.1503, however, would heighten short-term correction risks and could trigger a trend reversal.

Overall, EURUSD's technical signals have turned optimistic. With key resistance and moving average levels broken, the uptrend is clear. Investors should focus on the 1.1824 resistance and 1.1503 support levels to guide trading decisions.

Trading Recommendations

‌Direction‌: Short

‌Entry Level‌: 1.1800

‌Target Level‌: 1.1500

‌Stop Loss Level‌: 1.2029

‌Valid Until‌: May 7, 2026, 23:55

‌Support Levels‌: 1.1668, 1.1627, 1.1572

‌Resistance Levels‌: 1.1742, 1.1825, 1.1850

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