Following a bearish opening to the week, EUR/USD reversed its direction in the second half of the day on Monday to end marginally higher. The pair holds its ground early Tuesday and trades in positive territory at around 1.1650.

The sharp correction seen in Oil prices on hopes of G7 members releasing reserves to stabilise markets allowed investors to breathe a sigh of relief. Additionally, US President Donald Trump hinted that the military operation against Iran could end soon, saying that “the war is very complete, pretty much.”

After Wall Street’s main indexes registered gains on Monday, US stock index futures rise between 0.3% and 0.5% in the European session on Tuesday, suggesting that markets remain risk-positive.

G7 energy ministers will reportedly hold a virtual meeting to discuss a possible release of Oil reserves later in the day. In case this is confirmed, the market mood could improve further and allow EUR/USD to extend its recovery. Conversely, another leg higher in Oil prices, with a further reescalation of the conflict in the Middle East and G7 members failing to come to an agreement, could have the opposite impact on the pair’s action.

The economic calendar will not feature any high-tier data releases on Tuesday. On Wednesday, the US Bureau of Labor Statistics will publish the Consumer Price Index (CPI) data for February.

EUR/USD Technical Analysis:

In the 4-hour chart, EUR/USD trades at 1.1653. The near-term bias is mildly bullish as the pair rebounds from the 1.1570 support area and pushes above the 20-period Moving Average (MA) near 1.1600, with price also reclaiming ground above the lower Bollinger Band after earlier downside pressure. The 50- and 100-period MAs slope lower and remain above spot, framing the move as a corrective bounce within a broader downbeat context, but the latest Relative Strength Index (RSI) recovery from oversold territory toward the mid-50s shows improving momentum on this timeframe. Price now trades between the middle and upper Bollinger Bands, indicating stabilizing volatility after the recent slide.

Immediate resistance emerges at 1.1670, aligned with the nearby 50-period MA overhead, and a sustained break above this level would open the door toward the 100-period SMA at 1.1735. On the downside, initial support stands at 1.1570 (static level). A drop below this level would neutralize the current recovery attempt.

(The technical analysis of this story was written with the help of an AI tool.)

The GBP/USD pair attracts buyers for the third consecutive day and climbs to over a one-week high, around the 1.3485 region, during the first half of the European session on Tuesday. The move up is backed by a combination of supporting factors, which backs the case for an extension of the recent bounce from the vicinity of mid-1.3200s, or a three-month trough, touched last week.

US President Donald Trump said on Monday that the US-Israel campaign in Iran may soon come to a conclusion and would be over very soon, boosting investors’ confidence and triggering a goodish recovery in the global risk sentiment. This is evident from a positive tone around the equity markets and undermines demand for the safe-haven US Dollar (USD). Furthermore, the latest development led to an overnight dramatic turnaround in Crude Oil prices, which provides some respite from a potential war-driven surge in inflation. This likely reduces the chances ​of a hawkish shift from the US Federal Reserve (Fed) and weighs on US Treasury bond yields, dragging the USD further away from a three-month top set on Monday and lending some support to the GBP/USD pair.

The British Pound’s (GBP) relative outperformance could also be tied to the Bank of England (BoE) interest rate repricing. Two weeks ago, traders were pricing in approximately three BoE rate cuts for 2026. As of Monday, those expectations were replaced with a roughly 70% probability of a rate hike by year-end. This marks a swing of 100 basis points (bps) in expected BoE policy direction within two weeks, which turns out to be another factor acting as a tailwind for the GBP/USD pair. That said, hopes that the British government could introduce packages to support households in the face of a new energy cost shock – as hinted by Prime Minister Keir Starmer – raise the odds of a destabilising bond market and might cap the GBP. This warrants some caution for aggressive bullish traders.

In fact, Starmer said that Chancellor Rachel Reeves was in touch with the BoE, which is the clearest sign that the government is worried that measures could trigger unforeseen market reactions. Moreover, Iran’s Islamic Revolutionary Guard Corps (IRGC) dismissed Trump’s remarks as nonsense and said that Tehran, not Washington, will determine when the war ends. Adding to this, Iranian officials warned that regional security would either exist for everyone or for no one. This keeps geopolitical risks in play, which could limit deeper losses for the safe-haven Greenback and contribute to capping the GBP/USD pair. Hence, the focus remains squarely on developments surrounding the US-Israel-Iran war as traders look to this week’s macro data from the US and the UK for short-term opportunities.

GBP/USD 4-hour chart

Technical Analysis:

An intraday move beyond the 23.6% Fibonacci retracement level of the 1.3255–1.3867 downswing was seen as a key trigger for the GBP/USD bulls, though the subsequent move up stalls near the 38.2% Fibo. level. Hence, it will be prudent to wait for some follow-through buying beyond the 1.3500 psychological mark before positioning for additional gains toward the 50% retracement and the 200-period SMA on the 4-hour chart converging in the 1.3560–1.3565 region.

On the downside, initial support stands at the 23.6% retracement at 1.3399, followed by stronger backing at 1.3350, where the recent consolidation base aligns with the latest pullback lows. A sustained move above 1.3565 would strengthen the bullish case, while a drop below 1.3350 would weaken the current upward bias and point back toward the 1.3300 area.

Momentum signals underpin the upside: the Moving Average Convergence Divergence (MACD) line has moved above its signal line in positive territory with a modestly expanding histogram, and the Relative Strength Index (RSI) holds near 60, indicating firm but not overstretched bullish momentum.

(The technical analysis of this story was written with the help of an AI tool.)

EUR/USD started the week with a bearish gap and declined toward 1.1500 before recovering slightly. At the time of press, the pair was trading at 1.1525, losing about 0.8% on a daily basis.

Crude Oil prices rose sharply at the opening with no signs of a de-escalation in the Middle East conflict.

Although Iranian President Masoud Pezeshkian apologised to the neighbouring countries over the weekend and announced that Tehran will not strike “unless they attack first,” the disruption in Strait of Hormuz remains unchecked. Several major oil producers in the region, including the United Arab Emirates and Iraq, have decided to reduce Oil production, citing a lack of storage space because of tankers refusing to pass through the strait. As of writing, the barrel of West Texas Intermediate was trading near $103, rising more than 13% on the day.

Rising Oil prices and growing fears over a prolonged crisis force investors to adopt a cautious stance on Monday. The US Dollar (USD) Index, which trackes the USD’s performance against a basket of six major currencies, was last seen rising 0.7% on the day at 99.50. Reflecting the intense flight-to-safety action, US stock index futures are down about 1.5% in the European session on Monday, while Euro Stoxx 50 Index loses more than 2.5%.

Investors will remain focused on geopolitics because the economic calendar will not feature any high-tier data releases on Monday.

The International Energy Agency (IEA) is reportedly discussing a coordinated release of emergency oil reserves among G7 members to stabilize the energy markets. In case Oil prices correct sharply lower following an intevention, the risk mood could improve with the immediate reaction and help EUR/USD find a foothold. Unless there is a noticeable de-escalation, however, the pair’s recovery attempts could remain short-lived.

EUR/USD Technical Analysis:

The near-term bias is mildly bearish as the pair holds below the 20-, 50-, 100- and 200-period Simple Moving Averages (SMAs) on the 4-hour chart, which all slope lower and cap recovery attempts. Price trades near the lower area of the recent Bollinger Bands, reflecting persistent downside pressure after the recent slide from the mid-1.17s. The Relative Strength Index (RSI) sits in the low-30s, staying below the 50 line and reinforcing bearish bias without yet signaling an extreme oversold condition.

Immediate resistance emerges at 1.1570, where a horizontal barrier aligns just ahead of the descending 20-period SMA near 1.1600 and the 50-period SMA slightly higher, forming a resistance zone that would need clearing to ease bearish pressure. Above that, the next resistance is seen at 1.1670. On the downside, initial support stands at 1.1500, followed by a more distant floor at 1.1460, with a deeper level at 1.1401 only coming into play if sellers extend the current downtrend.

(The technical analysis of this story was written with the help of an AI tool.)