Euro bounces from three-month lows at 1.1505 with all eyes on the Middle East

• The Euro has bounced up from 1.1505 lows but remains nearly 0.9% down from Friday's highs.
• Trump's calls for an immediate ceasefire between Israel and Iran have eased risk aversion.
• Eurozone Sentix Confidence Index and German Factory Orders depict a grim economic outlook.

The Euro (EUR) turned positive against the US Dollar (USD) in the daily charts heading into the US session opening on Monday as the EUR/USD bounced to 1.1540 after hitting three-month lows at 1.1499. US President Donald Trump's calls to end the hostilities in the Middle East have soothed investors and contributed to trimming some of the recent USD gains.

Trump affirmed earlier on Monday that final negotiations on "peace" are proceeding, and that getting in this way is subject to "ignorance or stupidity". The US President called for an immediate ceasefire of the hostilities between Israel and Iran after the rivals exchanged attacks, ramping up concerns of an all-out war and sending Oil prices higher.

In the Eurozone, the Sentix Investors’ Confidence Index ticked up in June, yet within levels consistent with a dismal investors' mood and, anyway, below the average numbers seen before the US-Israel attack on Iran. Earlier on the day, German Industrial Orders dropped well beyond market expectations, clouding the Eurozone outlook further and adding pressure on the EUR. 

On Friday, the US Labour Statistics Office revealed that Nonfarm Payrolls rose by 172K in May, beating expectations of an 85K rise, while April’s figures were upwardly revised to 179K from previous estimates of a 115K increase. These numbers confirm that employment creation is gathering pace in the US in 2026, after a weak 2025 year, and boost hopes that the Federal Reserve will tighten its monetary policy later this year, which has sent the US Dollar higher across the board.

Technical Analysis: looking like a dead cat's bounce

EUR/USD trades at 1.1540, yet with the near-term bias looking strongly bearish. The 4-hour Relative Strength Index (RSI) at around 38 and the negative Moving Average Convergence Divergence (MACD) both hint that downside momentum is still dominant despite a mildly oversold tone.

Initial support is aligned at April's bottom, around the 1.1500 area, ahead of the March 19 and 30 lows around 1.1430. Further depreciation below those levels seems unlikely today.

Upside attempts, on the contrary, are likely to find significant resistance at the previous channel bottom near 1.1580. In the unlikely case that those levels are breached, Thursday's and Friday's highs, near 1.1650, and the late Mat high at 1.1685, will be targeted next.

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