EUR/USD holds gains near 1.1800 on hopes a resolution of Iran’s war

• EUR/USD consolidates near 1.1800 following a nearly 2.5% rally in the last seven days.
• Hopes of a new round of US-Iran negotiations keep the safe haven US Dollar on the defensive.
• ECB's Lagarde warns that the Eurozone economy is approaching adverse scenarios.

The (EUR) is trading practically flat against the US Dollar (USD) on Wednesday, changing hands at 1.1785 at the time of writing, following a nearly 2.5% rally over the previous seven trading days. The common currency returned to pre-war levels on Tuesday as investors have dialed back US Dollar long positions, amid hopes of a peace deal in Iran.

US President Donald Trump confirmed those hopes in an interview with the New York Post, in which he suggested that peace talks might resume in Islamabad over the next two days. Iranian authorities did not comment on the matter, but United Nations Secretary-General António Guterres affirmed that it is “very probable” that talks will resume this week.

Meanwhile, the US military announced that the blockade in the Strait of Hormuz has been "fully implemented". This measure shuts Iran’s sea trade, which accounts for about 90% of its GDP, putting pressure on the Islamic Republic to close a deal, but also worsening the chokehold of global Oil supply.

Iran's war boosts inflationary pressures in Europe

In the Eurozone, France’s Consumer Price Index (CPI) figures for March followed the track of the German and Spanish inflation data seen on Tuesday, confirming the higher price pressures stemming from the war. Eurozone Industrial Production, due later on the day, is likely to have a limited impact as it is February’s data, before the Middle East conflict started.

On Tuesday, European Central Bank (ECB) President Christine Lagarde warned that the region’s economy has moved between the ECB’s baseline and adverse scenarios but refused to commit to any specific data for further rate hikes and maintained her data-dependent stance.

In the US, March Producer Price Index (PPI) figures revealed that prices at factory gates rose to a 4% year-on-year rate, from 3.4% in February, but below the 4.6% reading anticipàted by the market. Excluding food and energy, the core PPI rose at a steady 3.8% yearly rate, below the 4.2% expected.

Technical Analysis: Consolidating gains near 1.1825 resistance

EUR/USD maintains a constructive bullish tone as it holds comfortably near six-week highs. The Relative Strength Index (RSI ) in the four-hour chart stays in positive territory, while the Moving Average Convergence Divergence (MACD) prints marginally positive readings, together hinting that upside momentum persists.

On the topside, initial resistance aligns at 1.1825, which held bulls on February 26 and 27. Further up, the next target is the February 9, 10, and 11 highs, around 1.1930.

On the downside, downside attempts remain contained above the 1.1780 area for now, closing the path towards previous highs, at the 1.1720-1.1730 area, ahead of the April 8 and 9 lows, near 1.1650.

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