EUR/USD traded near 1.1777 in Asian trading on Friday and moved sideways after a two-week rise to about 1.1825. Markets were watching for news on a further round of US-Iran talks.
S&P 500 futures were flat in Asia after gaining 0.26% to 7,041 on Thursday. The US Dollar Index was slightly higher near 98.25, though it was on track for a second weekly fall.
Us Iran Talks In Focus
No timetable was given for the next talks, but President Donald Trump said Iran was ready to hand over its uranium enrichment. He also said the US was “very close to a deal” and warned military action could resume if there is no deal.
In Europe, ECB policymaker François Villeroy de Galhau said talk of an April rate rise was premature. The ECB policy meeting is due on April 30.
Technically, the pair stayed above the 20-day EMA at 1.1673 after rebounding from the mid-1.15s. The 14-day RSI was near 62.
Support sits at 1.1673, with further support in the mid-1.15 area if it breaks. Resistance is at 1.1825, then 1.1929.
One Year Market Shift
We see that this time last year, the focus was on a potential bullish breakout for EUR/USD above 1.1825. At that point in April 2025, the pair was consolidating near 1.1777 after a strong rally. Today, the landscape has completely shifted, with the pair trading much lower at 1.1150, a drop of over 5% in the last twelve months.
The dovish ECB stance mentioned by Villeroy in 2025, where he pushed back on rate hike expectations, has fully materialized and intensified. We have since seen the ECB cut its deposit facility rate, most recently in February 2026 to 3.50%, as inflation remains stubbornly below target at 1.8%. This policy divergence with the US Federal Reserve continues to weigh heavily on the euro.
Geopolitical factors have also reversed, as the optimistic US-Iran talks from last year under the previous administration failed to produce a lasting deal. The focus has since shifted, and renewed tensions have contributed to a risk-off sentiment that benefits the US dollar. Consequently, the Dollar Index (DXY) has climbed from 98.25 last April to around 104.50 today, buoyed by persistent US inflation figures hovering at 3.2%.
Given the current environment, holding long positions seems risky, and the pair’s failure to rebound suggests selling into any strength. For options traders, this muted volatility and downward drift could make strategies like selling out-of-the-money call spreads attractive, capitalizing on the pair’s inability to break key resistance levels. This approach allows for premium collection while defining risk, a prudent strategy in this market.
