The EUR/USD currency pair is trading near the 1.1570 price zone on Monday, reflecting gains for the euro as the US Dollar loses momentum. This shift is attributed to easing concerns about the Iran war, with growing hopes for a ceasefire in the Middle East undermining the USD's safe-haven appeal in the second half of the American session [1]. Diplomatic efforts, reportedly involving regional intermediaries, are helping to calm markets and reduce the urgency for investors to seek safety in the USD [1].
Over the weekend, US President Donald Trump maintained a hardline stance, warning that failure to reopen the Strait of Hormuz would result in severe consequences. He threatened to destroy Iran’s power plants and bridges if the Strait is not reopened by the deadline he set for Tuesday [1]. Despite this ultimatum, recent developments suggest that diplomatic channels are being explored to stabilize the situation and ensure maritime traffic through the Strait, which has softened the impact of Washington’s threats and capped further upside in the USD [1].
Additionally, the Institute for Supply Management (ISM) reported that the Services Purchasing Managers Index (PMI) eased to 54 in March from 56.1 in February, missing expectations of 55. This weaker-than-expected data has put additional pressure on the USD [1].
Technical analysis indicates that EUR/USD trades at 1.1555 on the 4-hour chart, with a mildly bullish near-term bias. The price holds above the 20-period Simple Moving Average (SMA) and challenges the 100-period SMA cluster, signaling improving demand after recent consolidation. The Relative Strength Index (RSI) near 54 supports modest positive momentum, suggesting a gradual grind higher rather than a sharp rally. Immediate support is at 1.1538, with resistance at 1.1571. A sustained move above resistance could open the way to higher levels, while a drop below support would neutralize the current bullish bias [1].
CONCLUSION
Ceasefire hopes and diplomatic efforts in the Middle East have reduced safe-haven demand for the US Dollar, supporting gains in EUR/USD. Weaker US Services PMI data has further pressured the USD. The market is showing a mildly bullish bias for EUR/USD, with technical levels suggesting buyers retain the advantage as long as support holds.