EUR/USD Forecasts

The direction of the market will be dictated primarily by what happens with the energy supply in the Strait of Hormuz and the duration of the war.

• If the conflict continues, and energy prices stay persistently high, this is the scenario where the dollar will benefit the most (See more). As for the euro, this scenario would leave EURUSD at lower levels, towards a range of 1.11-1.15 (See more).
• If a resolution (de-escalation) is imminent, this would cool energy prices and restore calm. USD would lose strength and the euro would recover, making the current EURUSD declines towards 1.14-1.15 a good opportunity (See more).

However, news of a ceasefire between the US and Iran on April 8 have caused a significant reversal of the aforementioned movements. Market optimism is returning and energy prices have corrected, even after the first round of face-to-face negotiations in Pakistan failed (See more). In this environment, despite the continued uncertainty, EURUSD has rebounded to levels close to 1.18, reversing much of its decline (See more).