EUR/USD Price Forecast: Pair Climbs to 1.1790 for 7th Straight Day as Dollar Index Cracks $98.20

The U.S. Dollar Index (DXY) has broken below its rising trendline and slipped beneath the 50-day Simple Moving Average at $98.80, now sitting at $98.20 with the 200-SMA at $99.50 functioning as a hard ceiling above. The bearish candle structure — consecutive red candles with minimal lower wicks — reflects sustained, conviction-driven selling pressure rather than panic liquidation. The RSI is heading toward 35, which is not yet oversold but is directionally confirming that dollar momentum has shifted from neutral to genuinely weak. The previous consolidation range has broken to the downside. If the $98.00 horizontal support fails to hold, the next target is $97.70 — and that move would send EUR/USD meaningfully higher on the same session it occurs.

The dollar's deterioration is happening inside a complex and contradictory macro environment. The breakdown in U.S.-Iran peace talks over the weekend, combined with President Trump ordering a full U.S. Navy blockade of the Strait of Hormuz on Monday, created the type of geopolitical shock that would historically have sent the USD surging on safe-haven demand. The fact that it did not — that the DXY is at $98.20 and declining rather than spiking above $100 — tells you something fundamental about where the dollar is in its cycle. The safe-haven premium that should be flowing into USD is being overwhelmed by the inflation expectations channel: oil above $90 per barrel is being read as a constraint on Federal Reserve flexibility, not as a dollar-supportive demand shock, because a stagflationary oil surge is categorically different from a growth-driven commodity rally in terms of its currency implications.

The 10-year Treasury yield has stabilized around 4.29-4.32%, which is a level that historically provides robust support for the dollar through the interest rate differential channel. Yet the DXY is still declining. That divergence — yields holding but dollar falling — is a signal that the currency market is pricing something beyond pure rate differentials: it is pricing the erosion of U.S. credibility as a stable reserve currency anchor during a period of escalating military adventurism, and that is a much stickier and more durable bearish driver than a simple rate move.

EUR/USD Hits 1.1790 — The Highest Level Since the Iran War Began

EUR/USD is trading at 1.1790-1.1794, its highest price since the Iran war started in late February. The pair has now advanced for seven consecutive sessions — a streak that represents one of the most sustained directional moves in the currency pair in over a year. The 4-hour RSI has pushed into overbought territory at approximately 72, while the MACD histogram has flipped positive, confirming that buying pressure is persistent and broad-based rather than isolated to a single catalyst session.

From the session low of the prior week to Tuesday's high of 1.1790, EUR/USD has moved approximately 140 pips in a straight line. That is a significant directional move for a major currency pair in a compressed timeframe, and the fact that it has occurred against the backdrop of a U.S. Navy blockade of the Strait of Hormuz — which should theoretically be dollar-bullish through the energy security channel — makes the move even more structurally significant. The market is telling you that the medium-term dollar bearish thesis is overpowering the short-term safe-haven dollar bid, and seven consecutive days of EUR/USD gains is the price action confirmation of that thesis.

The breakout above the $1.1750 resistance zone is technically clean and confirmed. Price is holding $1.1720-$1.1750 as support — the previous top is functioning as the new floor — and the structure of higher highs and higher lows on the 4-hour chart is intact. The rising trendline from late March lows now sits at approximately 1.1610, which is the ultimate structural support if a sharp reversal materializes. Between current spot at 1.1790 and that trendline support, there is 180 pips of buffer — meaning the bull trend absorbs a great deal of adverse pressure before it is technically invalidated.

The 1.1825 Ceiling Is the First Test — 1.1930 Is What Breaks the Pair Open

The immediate resistance for EUR/USD sits at 1.1825 — the level that capped gains on February 26 and February 27 and which represents the first meaningful supply zone above current price. A sustained close above 1.1825 opens the February 9, 10, and 11 highs at approximately 1.1930. Breaking 1.1930 would be a structurally decisive event because it would put the pair above every significant resistance level from the first two months of 2026 and would confirm that the Iran war-driven repricing of the dollar's reserve currency premium has moved from a tactical trade to a structural rerating.

The alternative scenario — where 1.1825 holds and EUR/USD reverses — has specific technical triggers. The first meaningful downside level is the previous top at 1.1720-1.1730. A break below that zone would shift the structure from bullish to neutral and expose the April 8-9 lows near 1.1650. Below 1.1650, the ascending trendline support from late March at approximately 1.1610 becomes the key level. A break of 1.1610 on volume would be the signal that the seven-session rally has exhausted itself and that the pair is entering a corrective phase toward the key support at 1.1675 and potentially the 50- and 200-period moving average cluster at 1.16735.

The broader technical framework from the weekly chart adds important context: EUR/USD had been trapped below the 50- and 200-period moving averages for most of the early 2026 selloff, and the decisive recapture of both those averages in the past week — with the breakout above 1.1750 resistance — represents the most bullish technical development in the pair since the pre-war rally. The TRIX indicator still maintains an upward slope but sits below the zero line, indicating that long-term moving average momentum retains a bearish underlying bias that has not yet been fully reversed. A sustained move above 1.1825 with the TRIX crossing above zero would finally confirm a complete technical regime change in EUR/USD.

The Rate Differential Arithmetic That Keeps EUR/USD From Running Away

The interest rate differential between the U.S. and the eurozone is the structural constraint that prevents EUR/USD from breaking out with unrestrained momentum regardless of how bullish the geopolitical dollar narrative becomes. The Federal Reserve's current rate sits at 3.75%, with CME Group data showing a 99.5% probability that it remains unchanged at the April 29 meeting. The European Central Bank's deposit rate is at 2.00%, with current market pricing showing a 66% probability of a hold at 2.00% and a 34% probability of a rate increase to 2.25% at the April 29 decision.

The U.S.-eurozone rate differential is therefore 175 basis points — 3.75% versus 2.00% — and that spread is not narrowing in the near term under any realistic central bank scenario. If the ECB raises to 2.25%, the differential narrows to 150 basis points, which is modestly EUR-positive. If both central banks hold, the differential stays at 175 basis points, which is modestly USD-supportive through the carry channel. The one scenario that would dramatically accelerate EUR/USD upside — the Fed cutting while the ECB holds or raises — has a near-zero probability in April given the oil-driven inflation environment.

This arithmetic caps the rally in EUR/USD at a level that reflects geopolitical dollar weakness rather than genuine fundamental euro strength. The ECB meeting on April 29 is the same day as the Fed decision, which makes that day the most concentrated event risk for the currency pair in the near term. A 34% probability of an ECB hike is not negligible — if the ECB surprises with a 25 basis point increase to 2.25% while the Fed holds at 3.75%, the rate differential compression from 175 to 150 basis points is a clean catalyst for EUR/USD to break above 1.1825 and test 1.1930 in a single session.

Christine Lagarde's scheduled conference at the IMF meeting Tuesday provided the market with its first major ECB communication of the week. Her language around the inflationary impact of the Iran war on European energy prices — Germany's Wholesale Price Index came in at 4.1% year-over-year in April versus a prior reading of 1.2%, and Spain's Harmonized Index of Consumer Prices hit 3.4% year-over-year versus a 3.3% consensus — is directly feeding into the 34% ECB hike probability. Both Germany and Spain are confirming that the war's inflationary pass-through into European consumer prices is accelerating, which gives the ECB a legitimate policy rationale for tightening even as growth risks mount.

The German WPI at 4.1% versus a prior 1.2% is a staggering acceleration in producer-level price pressure — a 290 basis point month-over-month jump in the underlying inflation pipeline. That number almost certainly reflects the energy cost surge from the Strait of Hormuz supply shock working its way through German industrial supply chains, and it will take months to fully pass through into consumer prices. The implication is that European inflation is not peaking — it is building.

The Dollar's Safe-Haven Paradox — Why USD Is Losing Even When Geopolitics Favor It

The fundamental paradox driving EUR/USD higher in the face of an active U.S.-Iran military confrontation is that the same event generating safe-haven demand for USD is simultaneously generating a stagflationary scenario that limits the Fed's ability to respond to growth deterioration. During the 2022 energy shock driven by the Russia-Ukraine war, the USD surged because the Fed was able to aggressively hike rates while Europe faced a more severe energy shock. That playbook is not replicating cleanly in 2026 because the Fed is already at 3.75% with no room to cut, the U.S. economy is facing its own energy inflation from the Strait closure, and the geopolitical context of the U.S. being an active combatant rather than a bystander changes the risk calculus for global reserve managers.

When sovereign reserve managers around the world — managing trillions in foreign exchange reserves — see the United States actively blockading an oil-producing nation's ports, they face a structural question about the dollar's long-term role as the neutral global reserve currency. That question does not get answered in a single session, but the direction of travel is clear in EUR/USD's seven-day winning streak: reserve diversification flows out of USD and into EUR, JPY, and gold are providing a persistent bid underneath the euro that is structural rather than tactical.

The DXY is at $98.20, down from the 100-102 range it occupied during the peak of the early conflict. A further decline to $97.70 — the next technical target below $98.00 support — would add approximately 70-80 pips to EUR/USD from current levels on a pure correlation basis, which would put the pair solidly above 1.1860 and within striking distance of 1.1930.

GBP/USD's Seven-Day Rally Confirms the Dollar Weakness Is a Systemic Theme, Not EUR-Specific

GBP/USD is trading near $1.3535, extending its own rally within a clean ascending trendline, with consecutive bullish candles and higher highs confirming strong directional momentum. The pair has recaptured the 200-SMA near $1.3380 — the most technically significant development for sterling in weeks — and is now pressing toward the resistance zone at $1.3550-$1.3600. The RSI is approaching 65-70, which is elevated but not yet at the extreme overbought readings that historically precede sharp reversals.

The fact that both EUR/USD and GBP/USD are simultaneously making multi-week highs against the dollar — while the DXY breaks its rising trendline and 50-SMA — confirms that this is a broad dollar weakness story rather than a euro-specific or sterling-specific strength story. When the dollar is losing ground against both major European currencies simultaneously, the causal driver is dollar-side, and the persistence of that driver depends on how the Iran situation resolves and how U.S. inflation data evolves.

The GBP/USD setup provides a useful cross-reference for the EUR/USD trade: if sterling holds above $1.3450 — the rising trendline support — and continues toward $1.3600, it confirms that the broader dollar bearish trend is intact and that EUR/USD has the tailwind of systemic dollar weakness supporting its move toward 1.1825-1.1930. If GBP/USD fails at $1.3550-$1.3600 and reverses, it may signal that the near-term dollar bounce is beginning and that EUR/USD will face resistance at 1.1825 with increased conviction.

Iran's Uranium Enrichment Demand Was the Dealbreaker — and That Matters for EUR/USD Duration

The specific reason the Islamabad talks collapsed over the weekend — Iran refusing to abandon its uranium enrichment program — is the most important piece of fundamental context for assessing how long the EUR/USD uptrend can sustain. Reuters confirmed that the parties were close to a deal but that Iran's nuclear capabilities were the dealbreaker. Both sides have confirmed they are willing to continue engagement, and reports indicate a potential second round in Islamabad as soon as April 16.

The critical distinction for EUR/USD traders is between a deal that achieves Iran's uranium concession versus a deal that simply extends the ceasefire without resolving the nuclear question. A ceasefire extension without nuclear resolution is a temporary risk-on event that would modestly weaken the USD — sending EUR/USD toward 1.1825 — but would not sustainably break the pair above 1.1930 because the underlying geopolitical uncertainty would remain. A comprehensive deal that includes nuclear concessions from Iran is the scenario that would generate a multi-week dollar selloff as the full energy supply restoration narrative unfolds, oil collapses toward $70-80, inflation expectations fall sharply, and the Fed's rate path reasserts its dominance as the primary EUR/USD driver.

U.S. Vice President JD Vance stated Tuesday that it is up to Tehran to "take the next step" in peace negotiations — a formulation that signals Washington is waiting rather than actively pushing, which reduces the probability of a rapid breakthrough and keeps the USD in a weakening but not collapsing posture. President Trump's statement Monday that Iran had called asking to "work for a deal" is constructive, but the fact that the nuclear issue remains unresolved means the risk premium in energy markets — and the corresponding dollar uncertainty premium — will stay elevated until there is concrete evidence of Iranian nuclear concessions.

The April 21 Ceasefire Expiration Is the Binary Event That Determines Whether 1.1930 Trades or 1.1610 Tests

The two-week ceasefire announced April 7 expires April 21 — seven days from today. The EUR/USD trade thesis is directly conditional on what happens to that ceasefire. A renewal of the truce — even without a permanent deal — removes the acute risk of Strait of Hormuz closure escalation, allows oil to decline further from current $94-$96 levels, reduces inflation expectations, and gives the Fed more room on the rate path. That scenario sends EUR/USD through 1.1825 and toward 1.1930 in the days immediately following the announcement.

A collapse of the ceasefire without renewal — particularly if it coincides with Iranian military action against U.S. naval forces in the strait — triggers an immediate dollar safe-haven spike that could send EUR/USD back to 1.1650-1.1720 in a single session. The ascending trendline from late March at 1.1610 would then be directly tested within 48-72 hours of such a breakdown. A break of 1.1610 would push the pair toward the 50- and 200-period moving average cluster at 1.16735 and potentially toward the key support at 1.15355.

The market is currently positioned closer to the optimistic scenario — EUR/USD at 1.1790 after seven consecutive days of gains reflects a market that is assigning majority probability to ceasefire extension. The specific asymmetry in current positioning is that the seven-day rally has generated elevated RSI readings near 72 and has moved the pair into technical territory where a consolidation is overdue even if the fundamental backdrop remains constructive. The overbought RSI at 72 does not prevent further gains, but it does mean that a positive ceasefire headline might generate a "buy the rumor, sell the news" reaction at 1.1825-1.1830 where sellers who have been long since below 1.1700 begin taking profit.

The Fed's April 29 Decision and the ECB's Simultaneous Meeting Are the Catalysts That Define May

Both the Federal Reserve and the European Central Bank meet on April 29 — the same day — creating one of the highest single-day event risks for EUR/USD in recent memory. The Fed holds at 3.75% with 99.5% probability. The ECB holds at 2.00% with 66% probability or raises to 2.25% with 34% probability. The four possible combinations of those outcomes have very different implications for the pair.

Fed holds, ECB holds: Rate differential stays at 175 basis points, EUR/USD reaction is minimal — the dominant driver reverts to geopolitics and energy. Fed holds, ECB raises to 2.25%: Rate differential compresses to 150 basis points, EUR/USD gains 60-80 pips on the announcement and tests 1.1930 with momentum. Fed surprises with a cut to 3.50%, ECB holds: Rate differential compresses to 150 basis points from the opposite direction, EUR/USD gains 100+ pips in a single session — but this scenario has essentially zero probability given the current inflation trajectory. Fed surprises with a hike, ECB holds: Rate differential widens to 200 basis points, EUR/USD drops sharply below 1.1720 — also near-zero probability.

The actionable scenario is the ECB hike at 34% probability, which is high enough to keep EUR/USD bid on dips ahead of April 29 as the market positions for the possibility. The Beige Book release on April 15 and initial jobless claims on April 16 will refine the Fed's language and potentially shift the ECB's calculus if U.S. data deteriorates enough to signal global growth weakness that forces European policymakers to prioritize stability over inflation fighting.

The EUR/USD Trading Call — Buy the Pair, Respect 1.1825, and Size for April 21

EUR/USD is a Buy at current levels of 1.1780-1.1794. The technical structure — seven consecutive bullish sessions, RSI at 72 with persistent buying pressure, MACD histogram positive, price above both the 50- and 200-period moving averages, 1.1750 breakout zone confirmed as new support — is unambiguously bullish. The DXY breakdown below $98.80 and the 50-SMA confirms the dollar side of the trade. The 34% ECB hike probability provides a fundamental catalyst for April 29. The ceasefire renewal probability before April 21 provides the near-term geopolitical catalyst.

The entry is current spot around 1.1780-1.1800 on any shallow pullback. The stop goes below 1.1700 — the immediate support below the breakout zone. The first target is 1.1825 — the February 26-27 high. A break of 1.1825 on a weekly close targets 1.1930 — the February 9-11 highs — which represents approximately 130 pips of additional upside from current levels. The full trade from entry at 1.1780 to the 1.1930 target is 150 pips, with a stop at 1.1700 representing 80 pips of risk — a 1.875:1 reward-to-risk ratio that is acceptable given the momentum and fundamental support.

The risks are concrete. The RSI at 72 is in overbought territory and a corrective move is technically due. A failure of the April 16 Iran negotiations would trigger a dollar bounce that tests 1.1720-1.1730. The DXY $98.00 support level is the line to watch: if it holds, EUR/USD consolidates below 1.1825. If it breaks, the pair accelerates toward 1.1930. The 4.29-4.32% 10-year Treasury yield is still providing a meaningful real yield differential that fundamentally limits how far EUR/USD can run in the absence of a dramatic narrowing of the rate gap between Washington and Frankfurt. Everything above 1.1825 requires either a ceasefire deal, an ECB hike, or a continued DXY breakdown — preferably all three.

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