- EUR/USD hovers right above 1.1800, on track for a nine-day rally.
- Rising hopes of the resolution of the Middle East conflict are hammering the safe-haven USD.
- Trump threatened to fire Fed Chairman Jerome Trump if he does not step aside in May 15.
The (EUR) edges up against the US Dollar (USD) on Thursday, trading right above 1.1800 at the time of writing, on track for a nine-day rally. Hopes of a new round of negotiations between the US and Iran have prompted investors to move away from the safe-haven Dollar, propelling the pair to pre-war levels.
US President Donald Trump confirmed ongoing indirect negotiations with Tehran and affirmed in an interview that peace talks might resume in the coming days. He also affirmed that Israel and Lebanon will start “direct talks” soon, which would contribute to laying the ground for a steady peace agreement with Iran.
Apart from that, the US president has reignited his feud with Federal Reserve (Fed) Chair Jerome Powell, raising concerns about the central bank’s independence and adding pressure on the USD. The Republican threatened to oust him from his separate seat on the Board of Governors if he refused to vacate it at the end of his term as Fed Chair. Powell’s term as the central bank’s chief ends on May 15, but his term on the Board of Governors does not expire until 2028.
Technical Analysis: Resistance at 1.1825 is holding bulls
EUR/USD holds a constructive near-term bias, with technical indicators on the four-hour chart showing mixed signals. The Relative Strength Index hovers in bullish territory near 66 while the Moving Average Convergence Divergence (MACD) has slipped marginally into negative ground.
Bulls are struggling to break the late February lows in the 1.1825 area, which is closing the path towards the February 10 and 11 highs, near 1.1930.
On the downside, initial support is seen at Wednesday’s low, right above 1.1770, followed by the previous tops, between 1.1720 and 1.1740. Further down, a breach of the support area around 1.1650 (April 8, 12 lows) would put the current bullish trend into question.
