EUR/USD Price Forecast: Euro Slips Toward 1.1667 as Hormuz Tensions Lift Dollar and Fed Hold Odds Hit 99.5%

The Euro is changing hands near 1.1702 against the US Dollar as Thursday's session unfolds, with intraday prints oscillating between a low of 1.1679 and a rebound toward 1.1714 before settling into the 1.1688 to 1.1702 pocket that has governed most of the American morning. The pair has now posted three consecutive losing sessions, extending a pullback that began once the advance stalled against confluent resistance near 1.1814/26 earlier in the week. The US Dollar Index (DXY) climbed to a 10-day high of 98.80 intraday before easing slightly to 98.57, with some prints landing at 98.487, underscoring the fact that the Greenback is the primary driver here rather than any meaningful Euro-specific catalyst. The broader context matters just as much as the tick-level action — the pair registered an intraday low of 1.1505 in the prior month, rebounded more than 3.8% off that yearly trough, and then encountered the 1.618% extension of the March advance alongside the 61.8% retracement of the February decline at the 1.1814/26 region, which combined to force the current retracement. That failure at the confluence zone has shifted the immediate tape from corrective-consolidation to corrective-retracement, and the next several trading sessions will determine whether the uptrend reasserts itself or whether a deeper structural unwind takes hold.

The Geopolitical Backdrop — Why Hormuz Is Calling the Shots on the Dollar

The single most influential force acting on the Euro-Dollar cross right now is the geopolitical configuration around the Strait of Hormuz, which has effectively hijacked the pair from its normal macro drivers. President Donald Trump declared on Truth Social that the United States has "total control over the Strait of Hormuz" and that "no ship can enter or leave without the approval of the United States Navy," coupled with an order to the Navy to "shoot any boat putting mines in Hormuz." That rhetoric lands against an Iranian posture that remains firm and unyielding. Mohammad Bagher Ghalibaf, the speaker of the Iranian parliament and lead negotiator, described reopening the Strait as "impossible" while the US and Israel continued what he termed "flagrant" breaches of the ceasefire. The dual blockade — the US blockade of Iranian ports and Tehran's de facto control of Strait passage — has kept supply disruption risk live and the oil complex elevated, with roughly 20% of seaborne crude volumes transiting the waterway. Trump simultaneously announced an indefinite extension of the ceasefire, pending a new peace proposal from Iran, which creates a peculiar stalemate where neither escalation nor de-escalation is definitive. The second round of peace talks stalled after Iran refused to attend unless the naval blockade was removed, Vice President JD Vance paused his trip to join those talks, and Iranian state media characterized further dialogue as a "waste of time." Reports that Iran's Islamic Revolutionary Guard Corps Navy seized two vessels added fresh friction. The net consequence for currency markets is that the Dollar is drawing safe-haven demand whenever the situation looks fragile and losing a tick whenever a peace resolution appears feasible, which leaves (EUR/USD) trading at the mercy of headline flow rather than fundamental conviction.

The US Data Read — PMIs Blow Out Expectations While Claims Edge Higher

The American data docket on Thursday delivered a genuinely strong batch of readings that should have lifted the Dollar decisively but failed to do so. The S&P Global flash Manufacturing PMI for April printed 54.0 versus the 52.5 consensus and 52.3 prior, the highest reading in 47 months. The Services PMI came in at 51.3 against the 50.0 forecast and 49.8 prior, a two-month high, and the Composite PMI rose to 52.0 from 50.3. Both the production and new orders sub-indices within manufacturing reached multi-year peaks, though expectations for output in the year ahead improved only modestly and remained historically subdued. Initial jobless claims for the week ending April 18 printed 214,000, higher than the 210,000 to 212,000 consensus range and up 6,000 from the 208,000 prior reading. Continuing claims edged up to 1.82 million. The curious outcome is that the Dollar failed to capitalize on the upside data surprise, which points to a technical pullback rather than a fundamental rejection — traders had already priced in Dollar strength into the PMI release and took profit once the headlines matched expectations.

The Rate Path Divergence — Why the Fed and ECB Are Pulling Apart

The monetary policy picture is arguably the single most important fundamental lens for (EUR/USD) over the next several weeks, and the configuration is genuinely unusual. The Federal Reserve is now broadly expected to hold rates steady for the remainder of the year, a dramatic shift from earlier expectations that had priced several cuts into the curve. The probability implied by CME Group data for the Fed holding the funds rate in the 3.50% to 3.75% band at the April 29 meeting sits at 99.5%, which functionally eliminates any near-term monetary easing catalyst that could have weakened the Dollar. Fed nominee Kevin Warsh emphasized the importance of maintaining the central bank's independence from the White House during his confirmation hearing, a development that proceeded without major surprises and left the "higher-for-longer" narrative fully intact. On the other side of the Atlantic, markets are increasingly pricing in the possibility of ECB rate hikes — not holds, not cuts, but actual tightening — driven by the inflation risk stemming from elevated oil prices flowing through the supply chain. That divergence is historically significant. The spread between where markets are pricing Fed policy versus ECB policy is wider than it has been in months, and it would normally support a stronger Euro if the geopolitical risk premium was not simultaneously boosting the Dollar. The stand-off between those two forces is why the pair has struggled to break decisively in either direction and remains trapped near the 1.1700 pivot.

The Eurozone Growth Problem That Caps Any Euro Recovery

While the ECB rate-hike narrative is supportive of the Euro in theory, the underlying economic picture in the currency bloc is far more troubling than the rates story would suggest. The Eurozone Q4 2024 GDP growth printed 0.3% quarter-on-quarter compared with 0.8% in the United States, core inflation sat at 2.3% against the US reading of 2.6%, the unemployment rate was 6.4% in the Eurozone versus 3.9% in the US, and the Manufacturing PMI for the bloc printed 47.2 compared with 49.8 for the States — a contrast that establishes persistent growth differentials working against the Euro. German and Eurozone preliminary PMI releases on Thursday failed to inspire buying, and sentiment data more broadly remains weak. The ECB has signaled that its rate path will be data-dependent as the "Iran shock" unfolds, according to sources including Nomura, which effectively means the bank is watching before committing to any new posture. That hesitation caps Euro upside because the pair cannot rally on a hawkish ECB story that has not yet been validated by concrete action. The Euro is therefore sandwiched between a stagnant domestic economy and an increasingly hawkish rates narrative, which produces the range-bound behavior that has defined the pair for the past several weeks.

Technical Structure on the Daily Chart — The 1.1814 Rejection and the Support Test

The technical architecture on the daily timeframe is decisively at an inflection point. (EUR/USD) rallied more than 3.8% from the 1.1505 yearly low before stalling at the 1.1814/26 confluence zone — a region defined by the 1.618% extension of the March advance and the 61.8% retracement of the February decline. The pair has now fallen more than 1.1% from that peak and is approaching the lower bounds of the March uptrend structure. The 200-day simple moving average sits near 1.1810, and weekly pivot calculations place resistance at 1.1832, which means the supply cluster between 1.1810 and 1.1832 represents the defining barrier that bulls must reclaim to validate the uptrend. The daily RSI approached 68 before the pullback began, signaling near-term exhaustion without reaching outright overbought territory. The yearly open resistance sits at 1.1745 and serves as the first meaningful line that the pair must reclaim to stabilize the tape. The critical support complex is stacked at 1.1667 to 1.1682, defined by the March 10 swing high, the 200-day moving average, and the 38.2% retracement of the advance off the yearly low. Subsequent support rests with the January low-close and the 100% extension of the January decline at 1.1598 to 1.1612.

The Intraday Read on the Four-Hour and Two-Hour Charts

The four-hour structure shows (EUR/USD) trading within a consolidation range around 1.1736 with price extending down to 1.1693, and the MACD signal line sitting below zero and pointing firmly downward — a posture consistent with sustained bearish momentum on the lower timeframe. The pair is developing a move lower toward 1.1680 on the hourly chart, with potential for a corrective rebound to 1.1711 before a further decline toward 1.1620. The Stochastic oscillator with its signal line below 20 and pointing downward confirms continued short-term downside pressure. The two-hour chart shows (EUR/USD) has slipped decisively below its ascending channel, a pattern that suggests the recent run was a genuine bull rally rather than mere consolidation and that the breakdown below the mid-channel support and the 50-period moving average carries real structural weight. Multiple rejections have occurred at 1.1835, price is making lower highs, and trading below the lower channel boundary confirms the breakdown. The RSI on intraday charts has dipped into oversold territory, which technically supports the bearish lean but simultaneously raises the probability of a short-term bounce to unwind the positioning extreme.

The 1.1825 Fibonacci Debate — Is 1.1825 Really the Decisive Level?

The technical debate unfolding on the higher timeframes centers on whether the 1.1825 zone — specifically the 61.8% Fibonacci retracement level — functions as a decisive barrier or as a momentary pause. That level has now been tested three times in six trading sessions, which is typically a precursor to a directional resolution rather than continued range-bound action. The Ichimoku Cloud shows price approaching cloud resistance that aligns with the Fibonacci level. Bollinger Band analysis indicates the pair traded at the upper band boundary, pointing to mean-reversion pressure. The MACD has shown bullish momentum decelerating as the pair approached the barrier. Multi-timeframe alignment is unusually tight — the weekly chart shows 1.1825 coinciding with a trendline drawn from the 2022 highs, and the monthly chart places this level near the 38.2% retracement of the longer-term 2017-2024 range. Commitments of Traders data as of January 2025 showed leveraged funds had reduced net long Euro positions by 18% compared with December 2024 peaks, suggesting significant institutional caution ahead of the test. Asset managers have maintained relatively stable positioning, creating a divergence in sentiment between short-term speculators and longer-term allocators. Historical analysis of Fibonacci tests shows that when (EUR/USD) tests major retracement levels with elevated volume, subsequent moves average 2.8% in the direction of the resolution within ten trading sessions.

The Playbook From Prior Fibonacci Tests — What History Tells Us

The historical precedents on 61.8% Fibonacci tests offer meaningful guidance even if they are not perfect templates. In March 2023, (EUR/USD) rejected decisively from a 61.8% retracement at 1.1035, leading to a 4.2% decline over the subsequent month. In August 2024, a clean break above a 61.8% level at 1.1620 preceded a 3.8% rally. The current scenario shares structural similarities with the August 2024 setup but differs in three consequential ways. Trading volume is 15% higher than during the prior test, which amplifies the reliability of whatever signal the tape eventually produces. The macroeconomic divergence between the Eurozone and the US is more pronounced, with growth, inflation, employment and manufacturing all tilting toward Dollar strength. Sentiment indicators are less extreme than during the August 2024 analog, which reduces the risk of a contrarian squeeze but also limits the upside if a breakout materializes. The reality is that neither the bullish nor the bearish resolution is fully baked in, and the tape is genuinely at a coin-flip juncture that will resolve through the next several sessions of closing prices rather than intraday noise.

The Inflation Pass-Through That Could Change the Equation

One underappreciated variable is the pass-through effect of elevated oil prices on inflation expectations in both jurisdictions. Brent crude (BRN00) near $102.47 and WTI (CL00) at $93.30 are sitting at levels that, if sustained, will feed into headline CPI readings over the next several months. The ECB's shift toward the rate-hike possibility is driven precisely by this mechanism, while the Fed's hold-for-longer posture is also partially a function of persistent inflation concerns. The tension is real — both central banks face inflation pressure, but only one is seriously contemplating tightening, which is the ECB. If the oil pass-through accelerates and the Eurozone core inflation reading surprises to the upside, the hawkish ECB narrative would strengthen materially and could catalyze a genuine break higher through the 1.1814/26 resistance complex. Conversely, if oil prices retreat on a diplomatic breakthrough, the hawkish ECB case weakens, the Dollar benefits from the safe-haven unwind and the Euro faces a deeper retracement toward 1.1598 to 1.1612. That binary setup is a big part of why positioning has become cautious and why the pair is behaving as a range-bound instrument rather than a trending one.

Key Resistance and Support Map — The Levels That Actually Matter

Every active trader in the pair should have the following level structure memorized. Critical resistance on the daily timeframe sits at 1.1745 (yearly open), 1.1814/26 (key confluence zone), 1.1919 (2025 swing high), and 1.2020 (38.2% retracement of the broader 2008 decline). Critical support stacks at 1.1667/82 (confluent zone with 200-day SMA and 38.2% retracement), 1.1598 to 1.1612 (January low-close and 100% extension), and 1.1553 (deeper structural floor). On the intraday timeframes, the immediate battle lines are 1.1735 as nearby resistance and 1.1670 to 1.1645 as the critical support zone. A clean break below 1.1645 exposes 1.1607 and eventually 1.1560. Above 1.1735, the path opens to 1.1800 and then the confluence barrier at 1.1814/26. Those levels are not arbitrary — they represent the convergence of multiple independent technical signals across different timeframes, which is why they matter and why the market respects them with such consistency.