EUR/USD rebounds within Friday's range as Iran ceasefire deadline looms

• The US Navy seized an Iranian cargo ship on Sunday after Iran re-closed the Strait of Hormuz over the weekend.
• Oil surged on Monday as the two-week US-Iran ceasefire heads toward Tuesday's expiry with no deal in sight.
• Traders face a thin data docket this week, with US Retail Sales on Tuesday and global flash PMI prints on Thursday.

EUR/USD added around 0.2% on Monday, finding a small lift off overnight lows close to 1.1730 to trade near 1.1790 during the European session. The pair opened the new week lower after a volatile Friday that saw price whip from a six-week high above 1.1840 down to finish under 1.1780, and today's modest recovery has left it pinned within that range. A cluster of small-bodied candles through the Asian session showed traders reluctant to push fresh lows, with a steady grind higher into the London open carrying price back into the middle of Friday's corridor.

On the geopolitical front, the two-week ceasefire between the US and Iran is careening toward its Tuesday expiry with no framework agreement in place. The US Navy seized an Iranian cargo ship in the Gulf of Oman on Sunday after firing on its engine room, hours after Iran reinstated strict control over the Strait of Hormuz and fired on commercial vessels attempting to transit. President Trump claimed talks would resume in Islamabad on Monday evening, though Iran's foreign ministry denied any second round was scheduled, casting fresh doubt on the prospects for any lasting agreement. West Texas Intermediate (WTI) crude jumped more than 6% to above $89 per barrel as oil markets digested the weekend's escalation.

Despite the steady drumbeat of negative headlines, currency markets have so far avoided pricing in a worst-case scenario. The US Dollar Index (DXY) is trading close to six-week lows as traders continue to bet on some form of diplomatic resolution, even as that optimism looks increasingly fragile. Outside of the Iran storyline, the data calendar is light, with US Retail Sales on Tuesday and global flash Purchasing Managers Index (PMI) prints on Thursday the only notable risk events for the remainder of the week.

EUR/USD 15-minute chart

Technical Analysis:

In the fifteen-minute chart, EUR/USD trades at 1.1788. The pair holds a constructive intraday bias as it trades above the daily open at 1.1749, keeping the short-term structure tilted to the upside despite the absence of nearby moving average references.

On the downside, initial support is located at the day’s open around 1.1749, where a break would suggest a deeper corrective phase within the broader intraday advance. The Stochastic RSI at 82.0 sits in overbought territory, hinting that bullish momentum is stretched and that a pause or minor pullback toward underlying support cannot be ruled out before buyers attempt a fresh extension higher.

In the daily chart, EUR/USD trades at 1.1788. The pair holds above both the 50-day and 200-day exponential moving averages (EMAs), which lie well below the market and together suggest that the broader bias remains constructive despite the recent pullback from the highs. The Stochastic RSI sits deep in overbought territory near 95, hinting that upside momentum is stretched and that bullish follow-through could slow in the near term.

On the topside, the first area to watch is the 50-day EMA around 1.1669, with the longer-term 200-day EMA down near 1.1597 reinforcing secondary dynamic support on any deeper correction. With no nearby chart-based resistance levels immediately overhead in the data, price action will likely be guided by overbought momentum signals and whether buyers can defend these moving-average floors on dips.

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