13.04.202604:26 Forex Analysis & Reviews: Overview of the EUR/USD Pair. Weekly Preview. Negotiations in Pakistan as the Foundation for Everything

The EUR/USD currency pair will attempt to develop an upward impulse in the new week. Last week showed that the market believes in successful negotiations between Iran and the US, but anticipates they may be difficult and prolonged. However, as we have already stated, a long path to peace is better than the continuation of war. This is the first factor for a potential rise of the euro. The second factor is the fading importance of geopolitical factors. We have previously mentioned that geopolitics has its own "expiration date." In other words, if the war in Iran continues for another year, it is unlikely that the US dollar will keep rising solely on this factor, while ignoring all others.

Recall that in the last two months, almost all macroeconomic reports and fundamental events (for example, central bank meetings) were ignored. Even on Friday, when an important inflation report was released in the US, there was no market reaction. On Thursday, the US released a disappointing fourth-quarter GDP report, which also did not reflect on the charts. Thus, geopolitical factors will remain in focus but in a somewhat different form.

As of Sunday, the negotiations in Islamabad have not yielded positive results. However, they could resume soon, according to both sides. Therefore, we would not entirely dismiss the possibility of a ceasefire. Two scenarios are possible.

The first is that peace is signed. Naturally, in this case, the euro will continue to rise. More accurately, the US dollar will continue to fall as the market no longer needs a "safe haven." Recall that over the last two months, the dollar has grown solely due to geopolitical tension in the Middle East. Had the market paid attention to other factors, the dollar would not have risen by even 200 points. At the same time, the upward trend in the EUR/USD pair remains valid on both the daily and weekly timeframes. Therefore, we expect only growth in 2026.

The second scenario is that peace will not be signed, negotiations will completely fail, and the war will continue. In this case, the euro will find it difficult to continue rising, as demand for the US dollar will increase again. Last week, the market granted the euro a certain degree of trust, reflected in hopes for an end to the war in the Middle East. If these hopes do not materialize, the market will immediately revert to the situation five days ago.

Should we pay attention to the macroeconomic background? It might be worth it, but only by habit. Reports on industrial production and inflation will be published in the Eurozone in their second estimates. Both reports can be considered secondary. We believe that everything will depend on geopolitics.

The average volatility of the EUR/USD currency pair over the last five trading days as of April 11 is 83 pips, which is considered "average." We expect the pair to move between levels 1.1644 and 1.1810 on Monday. The upper regression channel has turned downward, indicating a trend change to bearish. However, an upward trend may actually resume now. The CCI indicator has entered the overbought zone, signaling a possible near-term downward correction.

Nearest support levels:

S1 – 1.1719

S2 – 1.1597

S3 – 1.1475

Nearest resistance levels:

R1 – 1.1841

R2 – 1.1963

Trading Recommendations:

The EUR/USD pair has begun its upward movement, but its continuation will again depend on geopolitical factors. The global fundamental background for the dollar remains extremely negative; however, for the past two months, the market has focused solely on geopolitics, rendering all other factors nearly irrelevant. If the price is below the moving average, consider shorts with targets at 1.1475 and 1.1353. Above the moving average, long positions remain relevant with targets at 1.1810 and 1.1841. A stronger upward movement requires that the geopolitical situation continue to improve.

Explanations for Illustrations:

Regression channels help determine the current trend. If both are directed in the same way, it indicates a strong trend.

The moving average line (settings 20.0, smoothed) defines the short-term trend and direction in which trading should proceed.

Murray levels serve as target levels for movements and corrections.

Volatility levels (red lines) indicate the probable price channel in which the pair is likely to trade over the next day, based on current volatility readings.

The CCI indicator's entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.