EUR/USD drops as strong US data and Iran impasse lift Dollar bids

• Strong Durable Goods Orders reinforced confidence in the US economy.
• Higher yields and firm oil prices supported the Greenback’s rebound.
• Traders now await Fed and ECB decisions for fresh direction.

EUR/USD drops by some 0.17% during the North American session as a possible resolution of the US-Iran conflict seems far from ending, while Durable Goods Orders data in the US suggest that the economy remains solid. At the time of writing, the pair trades at 1.1684 after reaching a daily high of 1.1720.

Euro weakens as yields jump before Fed and ECB rate decisions now

High energy prices are underpinning the US Dollar, which, of late, has been correlated with WTI, posting back-to-back bullish days and rising 0.27% in the day, according to the US Dollar Index. The DXY, which measures the performance of the buck’s value against a basket of six currencies, is at 98.66.

US Treasury yields are soaring, with the 10-year Treasury note up 5 basis points to 4.398%, a sign that investors are less confident the Federal Reserve will reduce borrowing costs in the near term.

The US President Donald Trump urged Iran to sign a deal as he prepared the US Navy for an extended blockade of Iranian ports, as negotiations have stalled.

Aside from this, US Core Durable Goods Orders in March rose sharply 3.3% from February’s 1.6% print, crushing estimates for a minimal 0.6% increase, a sign that business spending is picking up, driven by companies spending on AI to improve profit margins. Headline goods orders improved from a -1.2% YoY contraction, to 0.8% exceeding forecasts of 0.5%.

Across the pond, the Harmonized Index of Consumer Prices (HICP) in Germany rose from 2.8% to 2.9% YoY, missing estimates of 3%. Monthly, the German HICP decreased form 1.2% to 0.5%, below forecasts for a 0.8% jump.

Fed and ECB meetings up next

Now, traders’ eyes would be on monetary policy meetings in both sides of the Atlantic. The Federal Reserve is projected to keep interest rates unchanged in the 3.50%-3.75% range, but the attention would be on Powell’s decision to stay at the Fed until his term as Governor ends, or whether he would leave his place open, which would increase Trump’s allies on the committee.

On Thursday, the European Central Bank is projected to keep rates unchanged, but for the rest of the year, money markets see three basis points of rate hikes towards the end of the year, as revealed by Prime Terminal’s implied forward rates curve.

EUR/USD Price Forecast: Technical outlook

In the daily chart, EUR/USD trades at 1.1690, holding just above the triple simple moving average (SMA) clustered around 1.1649, which now acts as immediate support. The pair, however, remains capped by the broader trend structure, with former rising support now sitting above spot near recent highs around 1.1760 and converging with the dominant downward resistance line closer to 1.1800, suggesting rallies are still vulnerable while price trades beneath this confluence. The Relative Strength Index (RSI) at about 50.4 hovers around neutral, hinting at a loss of directional conviction after the recent recovery from mid-1.15s.

On the topside, initial resistance is seen near the former rising-support line around 1.1760, ahead of the broader downward resistance trend zone near 1.1800, where sellers are likely to re-emerge unless the pair can sustain a clear break higher. On the downside, the triple SMA support at roughly 1.1650 is the first level to watch; a daily close below this floor would expose a deeper pullback toward the mid-1.15 area, while holding above it would keep the pair in a consolidative stance within the broader corrective structure.

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