Euro rises as traders expect US-Iran deal soon, USD slips

• Iran draft pledges Hormuz reopening within one month.
• White House denial keeps peace-deal optimism fragile for traders.
• Fed officials stay inflation-focused as ECB hike bets rise.

The Euro advances by 0.21% on Wednesday as risk appetite improves on news that Iran presented a draft framework to the US to end the conflict, which was cheered by financial markets. At the time of writing, the EUR/USD trades at 1.1649 after bouncing off daily lows of 1.1623.

EUR/USD gains as Hormuz draft hopes offset White House denial

Headlines from the Middle East are driving the markets. Iran’s state TV revealed the contents of a draft that says Iran will restore commercial shipping through the Strait of Hormuz to pre-war levels within a month, in exchange for the withdrawal of US military forces near Iran and the lifting of the blockade.

The draft excludes military vessels from sailing and would see Iran oversee shipping traffic through the Strait of Hormuz alongside Oman.

Recently, the White House denied the draft's contents, calling it a complete fabrication.

Data-wise, the US economic docket was light, with the ADP Employment Change 4-week average dipping from a revised 40.75K to 35.75K, yet showed that the labour market remains solid.

Meanwhile, Fed officials crossed the wires, led by Dallas Fed Lorie Logan, who refrained from discussing monetary policy but said that “if Strait of Hormuz stays blocked, world Oil and natural gas consumption could need to fall more meaningfully.” She added that “consequences would depend on whether end users can switch to other energy sources or use energy more efficiently.”

Her colleague, the Minneapolis Fed's Neel Kashkari, said the balance of risks to the dual mandate suggests focusing on inflation. He added that it is too soon to predict the timing of Fed action.

Across the pond, the docket is absent, yet European Central Bank (ECB) member Stournaras hinted that a June rate hike is likely, aligning with other policymakers.

Ahead this week, the US economic docket will feature Durable Goods Orders, jobs data, Gross Domestic Product (GDP) figures and the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index.

In Europe, traders' focus would be on Business Climate and Consumer Sentiment polls, as well as the ECB's speaking schedule.

EUR/USD Price Forecast: Technical outlook

In the daily chart, EUR/USD trades at 1.1634, holding just above the reclaimed uptrend support around 1.1578 while capped by the flattened 50/100/200-day simple moving average (SMA) cluster near 1.1663. This configuration leaves the near-term bias broadly neutral, with price oscillating between trend support and moving-average resistance. The Relative Strength Index (14) at 45 stays below the midline, hinting at only modest downside pressure rather than a decisive directional impulse.

On the topside, initial resistance is located at the SMA cluster around 1.1663, a daily close above which would open the way toward the descending resistance trend line near 1.1811. On the downside, immediate support lies at the former breakout zone around 1.1578, with a sustained move beneath this level exposing deeper trendline-derived support closer to 1.1258.

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