EUR/USD tests 1.1665-1.1635 support as dollar strengthens

EUR/USD is testing short-term support at 1.1665-1.1635 after falling roughly 1.5% from a two-month high of 1.1849. The pair fell to about 1.1669 on April 23, 2026 before finding the support zone.

Traders pointed to the breakdown of a second round of US-Iran negotiations – Trump extends ceasefire – and renewed incidents in the Strait of Hormuz, where actions affecting tanker movements pushed oil prices up more than 10% and increased demand for the US dollar as a safe haven.

On policy expectations, implied interest-rate curves for the eurozone and the United States show a slight steepening of the eurozone-US spread for May-September 2026. The September reading was around -1.32%, compared with -1.37% three months earlier, reflecting market pricing that the European Central Bank may be relatively less dovish than the Federal Reserve.

Technically, the pair remains above the 20-, 50- and 200-day moving averages and stays in the short-term uptrend that began after the March 13 low. Price has pulled back to the area where those moving averages converge and the 20-day average is near a crossover above the 50-day average. An hourly relative strength index showed a bullish divergence in oversold territory on April 23, and the pair has traded inside an ascending channel since the March 30 low.

Traders are watching 1.1722 as a near-term upside trigger with resistance levels near 1.1790, 1.1835 and 1.1890. A firm hourly close below 1.1635 would invalidate the bullish reversal scenario and could expose lower supports near 1.1575 and 1.1510.

Market commentary and technical observations were provided by senior market analyst Kelvin Wong, based in Singapore, who has more than 15 years of experience in global macro and foreign-exchange research. Wong identified geopolitical risk, oil price moves and shifting interest-rate expectations as the main short-term drivers of EUR/USD.

EUR/USD reached 1.1849 on April 17, 2026 before the recent retreat. Tensions around Iran and disruptions to shipping in the Strait of Hormuz have affected oil and currency markets, while traders continue to reflect central-bank policy differences in forward rate curves.