The US-Iran war has been going on for well over a month, and while traders got ecstatic after the announcement of a ceasefire, it remains more than feeble. After weeks of rallies in the US dollar, the prospect of an end to the war brought it to its knees, but that effect was merely temporary. EUR/USD attempted to rally from its consolidation, but a large fundamental test reprices optimism in the pair.
Markets were pleased to hear that a US-Iran ceasefire was finally taking place after weeks of chaos in the Middle East.
The truce was arranged to prepare for the recently failed negotiations1 in Islamabad, Pakistan. The issue is that participants may have just gotten ahead of themselves.
While equity markets bounced around 10% throughout last week2, with a heavily optimistic repricing, the US dollar and WTI Crude oil combo still haven’t said their last words3 – both exploded higher at the start of the week. The peace talks have largely stalled as Iran still disagrees to relieve its leverage on the Strait of Hormuz and give up their ballistic missiles program4.
Add to this threats from President Trump to form a blockade5 to prevent Iranian ships from freely navigating the world’s most important 10km region, and traders are already afraid that the ceasefire could come to an end.
Major FX currencies had built a remarkable bounce last week against the USD6, but this optimism could not withstand renewed angst over the conflict.
The Euro, victim of its prior success and strongly affected by Gulf oil production stalling (with Russian oil being dismissed as a supply option), eased by close to 4,000 pips in March. Last week marked an attempt to erase most of these losses, with a break above its key 1.17 resistance.
Nonetheless, EUR/USD could not hold up against the re-aggravating fundamentals and has officially faked out above the level. The weekly open formed a gap down in the world’s most popular currency pair.
With the RSI rejecting overbought levels, momentum is now reaching neutral again in a striking U-turn.
Traders are now awaiting further clarity, as negotiating parties are still wondering if the ongoing talks will lead to a more long-lasting peace7.
Several points remain under heavy debate, hence tensions remain elevated.
EUR/USD 4H chart, April 13, 2026. Source: TradingView. Past performance is not indicative of future results.
Resistance levels
- 1.17 to 1.1720 March resistance
- 1.1740 Friday highs
- 1.1750 to 1.1760 psychological resistance
- Major 2025 resistance zone 1.18 (+/- 150 pips)
Support levels
- Major Pivot 1.16250 to 1.16350
- 4H 200-period moving average 1.1592
- 1.1540 to 1.1570 war support
- War lows 1.14111
- August 2025 lows 1.14
This article and its contents are intended for educational purposes only and should not be considered trading advice. Forex trading is high-risk. Losses may exceed deposits.
