Bullish view
- Buy the EUR/USD pair and set a take-profit at 1.1800.
- Add a stop-loss at 1.1550.
- Timeline: 1-2 days.
Bearish view
- Sell the EUR/USD pair and set a take-profit 1.1550.
- Add a stop-loss at 1.1800.
The EUR/USD exchange rate jumped to its highest point since March 3 after President Donald Trump postponed his bombardment of Iranian infrastructure. It jumped to 1.1665, much higher than the year-to-date low of 1.1412.
Donald Trump Postpones Iranian Attack
The EUR/USD pair has jumped sharply in the past few days, a trend that continued on Wednesday. In a statement, President Trump said that he would pause on his threat to bomb Iranian infrastructure like bridges and power plants.
In exchange, Iran will agree to reopen the Strait of Hormuz as the two sides deliberate on its ten-point peace agreement that prevents future attacks by the United States and Israel. Still, it is not clear whether Iran will agree to reopen the Strait because it is its main leverage.
The EUR/USD pair rose after S&P Global published weaker European services and composite PMI data. This report showed that the services PMI dropped to 50.2 in March from the previous 51.9, while the composite figure dropped to 50.7.
The Federal Reserve will publish minutes of the last monetary policy meeting in which officials decided to leave interest rates unchanged between 3.50% and 3.75%. These minutes will provide more color on what officials talked about.
The US will publish more macro data on Thursday and Friday. For example, it will release the final estimate of the fourth quarter GDP report. Economists expect the data to show that the GDP grew by 0.7% in Q4, a significant slowdown from the previous quarter’s 4.4%.
The US will also release the latest PCE report, which is the Federal Reserve's favorite inflation gauge. Economists expect this report to show that the headline PCE rose by 2.8% in February. The US will release the latest Consumer Price Index on Friday.
EUR/USD Technical Analysis
The daily chart shows that the EUR/USD pair has jumped sharply in the past few days, moving from a low of 1.1412 in March 13. It has soared to 1.1675, its highest point since March 2nd.
The pair has moved above the 50-day Exponential Moving Average (EMA). It has soared above the Bottom of the trading range of the Murrey Math Lines.
Also, the Relative Strength Index (RSI) has moved above the neutral point of 50. Therefore, the pair will likely continue rising as bulls target the key resistance level at 1.1800.