EUR/USD holds losses near 1.1550 amid fading hopes of a US-Iran peace deal

The Euro (EUR) remains practically flat against the US Dollar (USD) at the time of writing on Thursday, consolidating losses from the previous two days. Iran’s rejection of the US peace plan proposal has shattered the mild hopes of a peace deal in the Middle East, hurting investors' appetite for risk and providing additional support for the safe-haven USD.

Iran has rejected the 15-point plan presented by the US to end the war in the Middle East and denied any negotiations while the country remains under attack. The US has threatened to “hit harder”, while US and Israeli planes have continued attacking. Tehran has responded by launching missiles and drones targeting central and northern Israel, and the Strait of Hormuz remains closed for the fourth week, strangling the global economy and hammering market sentiment.

In the monetary policy domain, European Central Bank (ECB) committee member Joachim Nagel affirmed that a rate hike will be an option at April’s meeting, in line with President Christine Lagarde’s comments on Wednesday, who stated that the central bank is ready for monetary policy adjustments if inflation proves stronger. On the macroeconomic front, the German GfK Consumer Confidence Survey projected a sharp decline, to -28 in April, its worst reading in over two years, from -24.8 in March.

Technical Analysis: Euro recovery might have hit a top

EUR/USD trades at 1.1560 as of writing on Thursday. The pair remains within a bullish channel from mid-March lows, but the double top around 1.1635 and the evening star candle pattern in the daily chart suggest that bulls might have lost faith.

Technical indicators are also pointing lower on the 4-hour chart. The Moving Average Convergence Divergence (MACD) histogram has turned more negative, with the MACD line trading below the signal, suggesting bearish momentum. The Relative Strength Index (RSI) has retreated toward the mid-40s, reinforcing a loss of upside conviction and pointing to risk of further downside while below the recent 1.1610 zone.

Initial resistance emerges at the mentioned 1.1635 area (March 23, 25 highs) ahead of the March 10 high near 1.1670. On the downside, the 1.1550 area is holding bulls on Thursday, ahead of the channel bottom, now around 1.1535, and the March 23 low, at 1.1484.

(The technical analysis of this story was written with the help of an AI tool.)