EUR/USD fell back from last week’s peak near 1.1740 on Monday, but stayed in the upper 1.1600s. It traded at 1.1685 and found support earlier at 1.1670.
Oil prices rose after peace talks between the US and Iran failed and the US said it would block the Strait of Hormuz, which lifted demand for the US Dollar. The Euro’s decline has remained limited so far.
Oil Shock And Currency Reaction
Brent crude traded just above 100 USD per barrel, while EUR/USD slipped below 1.17. Implied EUR/USD volatility was described as staying comparatively low while markets expect de-escalation.
With a light economic calendar, headlines from Iran are expected to keep moving markets. On Tuesday, attention turns to ECB President Christine Lagarde ahead of the April 30 policy decision.
EUR/USD held above the 1.1630 area and its wider trend was described as positive. The RSI was around the mid-50s and the MACD stayed close to the zero line.
Resistance was placed at 1.1725–1.1735, then 1.1825, and near 1.1930. Support levels were 1.1670, 1.1630–1.1640, and a rising trend support near 1.1590.
Then And Now
We remember this time in 2025 when tensions in the Strait of Hormuz pushed oil over $100 a barrel. The Euro held surprisingly firm against the dollar, trading near 1.17 despite the flight to safety. That period showed us that geopolitical risk does not always crush the Euro if markets are hoping for a quick resolution.
Today, on April 13, 2026, the situation is quite different. With Brent crude trading more calmly around $87 per barrel and a fragile truce holding in the Middle East, the geopolitical premium has mostly vanished. The EUR/USD pair is now trading much lower, near 1.0850, driven more by central bank policy divergence than by conflict.
Implied volatility was a key indicator then, and it remains so now. While volatility was considered low in April 2025, the underlying risk was high; today, the CBOE EuroCurrency Volatility Index sits near a multi-year low of 6.2, reflecting genuine market quiet. This makes buying options, such as straddles or strangles, relatively cheap to position for any unexpected disruption.
Last year, we were watching ECB President Lagarde for hints on managing an inflation shock from oil. Now, the focus is squarely on the divergence between the ECB and the Federal Reserve, with the ECB signaling a more aggressive rate-cutting cycle. This fundamental pressure is what is keeping a lid on any Euro rallies, unlike the resilient price action we saw in 2025.
Considering the low volatility and the bearish fundamental outlook, selling out-of-the-money call spreads on EUR/USD could be an effective strategy. This allows us to collect premium while betting that the pair will not break significantly higher, a direct contrast to the bullish trend we saw in early 2025. The 1.1000 level, which acted as support in late 2025, now looks like a formidable resistance ceiling for the coming weeks.
