10.04.202619:37 Analisis Forex & Kajian: EUR/USD Smart Money: Rising Inflation Fails to Move the Market

The EUR/USD pair has been rising for the fifth straight day on expectations of a ceasefire between Iran and the United States. All other news, reports, and events are having little to no impact on trader sentiment. It is worth noting that technical analysis had already signaled a potential rise in the euro. A reaction occurred at bullish imbalance 12, which triggered the current upward move. Of course, if geopolitics had not shifted against the bears, this bullish advance might not have happened—but the pattern itself still mattered. Traders therefore had the opportunity to open long positions, which are now showing strong profits.

As for the news backdrop, military activity in the Middle East continues intermittently. On Wednesday, the U.S. struck another refinery in Iran, Iran launched missiles toward Kuwait, and Israel carried out heavy bombing in Lebanon. However, no similar events were reported on Thursday and Friday. The market continues to believe in a longer-term ceasefire, and as a result, demand for the U.S. dollar has weakened.

All of the dollar's gains over the past one and a half to two months were driven solely by geopolitics. As soon as the U.S. and Iran agreed to a two-week ceasefire, bears immediately retreated and bulls stepped in aggressively. The truce remains fragile, but the key point is that a bullish signal has been generated and EUR/USD is rising. That, in itself, is enough for the market.

I have repeatedly stated that I do not believe the bullish trend has ended, despite the break of key structural lows. The price action over the past two months could still evolve into a bearish trend if geopolitics deteriorates again. However, at this stage, I remain skeptical that bears can sustain prolonged pressure based on a single factor. A renewed bearish push would require a complete failure of ceasefire efforts and a continued blockade of the Strait of Hormuz.

The technical picture has changed noticeably in recent days. First, the price may still react to imbalance 11 and resume its decline—this scenario would become primary if the ceasefire collapses. Second, the reaction to imbalance 12 has already formed a bullish signal within an uptrend. Third, a new bullish imbalance is likely to form this week, which will serve not only as a potential entry zone for long positions but also as a support area for the euro.

Friday's news flow was not just interesting but important. I did not expect a strong market reaction to Germany's inflation report, but I did anticipate increased volatility following the U.S. inflation data—and that did not materialize. U.S. CPI rose to 3.3%, exactly as expected, which explains the muted reaction. Still, it must be acknowledged that inflation has accelerated significantly, and the Federal Reserve will now have to consider how to bring it back down.

There are still plenty of reasons for bulls to stay active, and even the outbreak of conflict in the Middle East has not diminished them. Structurally and globally, Trump's policies—which led to a significant decline in the dollar last year—have not changed. In the near term, the dollar may gain on risk aversion, but this support is temporary and depends on continued escalation in the Middle East. Without that, the dollar lacks strong drivers.

I still do not believe in a sustained bearish trend. The dollar has received temporary support, but what will allow bears to continue pushing lower?

News Calendar for the U.S. and the Eurozone

• U.S. – Existing Home Sales (14:00 UTC)

On April 13, the economic calendar contains only one entry, none of which are significant. The news background is unlikely to influence market sentiment on Monday.

EUR/USD Forecast and Trading Tips

In my view, the pair remains in the process of forming a bullish trend. Although the news backdrop shifted sharply two months ago, the broader trend cannot yet be considered reversed or completed. Therefore, bulls may continue their advance in the near term—provided geopolitics allows it.

In the short term, bears may receive a signal at imbalance 11, but unless the geopolitical situation worsens, this signal may not materialize. Bulls, meanwhile, had the opportunity to open long positions based on the signal from imbalance 12, targeting around 1.1670. This target has already been reached, and the upward movement may continue toward yearly highs.

However, there is one key condition: the conflict in the Middle East must move toward a stable peace.