Financial markets have flipped notably in the last 24 hours. What looked like a defensive, dollar-driven market through March has quickly turned on its head after the ceasefire agreement between the US and Iran. The reaction was classic macro playbook. Risk assets caught a bid, tumbled, and the dollar gave back a chunk of its safe-haven premium. European equities extended gains into the morning, while FX markets leaned into a softer dollar narrative. While this initially felt like a relief rally than a fully confirmed trend reversal, market reaction so far suggests this could be more long-lasting. One of the major beneficiaries of the turnaround in risk appetite is the .
Oil Drop Changes the Macro Narrative
The key driver here is energy. Lower oil prices directly ease stagflation concerns, which had been a major headwind for the EUR/USD previously. Fresh comments from Donald Trump today suggesting progress towards a more permanent resolution added another leg lower in crude. More importantly, Iran signalling safe passage through the Strait of Hormuz is a big deal for global supply.
If shipping flows normalise, the market will likely continue unwinding those defensive trades—long dollar, short euro, weak equities. That said, markets have already priced a good portion of this shift. The easy move may already be behind us.
As Dollar Unwinds, Euro Finds Support
From a macro standpoint, the softer oil backdrop opens the door for a more constructive EUR/USD trend. Lower energy costs ease pressure on the eurozone while simultaneously reducing the dollar’s safe-haven appeal. There’s also a subtle shift happening in rate expectations. Markets are again flirting with the idea of Federal Reserve cuts later this year, although conviction still looks shaky. For now, sentiment is doing the heavy lifting—and that’s enough to keep EUR/USD supported on dips.
Technical Structure Turns Constructive
Technically, the story has been improving even before the headlines hit. The EUR/USD has been carving out a series of higher lows, hinting that selling pressure was already fading. The post-ceasefire spike simply accelerated that underlying trend.
In the near term, the EUR/USD trend points toward a potential move into the 1.1750–1.1800 resistance zone, where we may see sellers re-emerge.
On the downside, the structure is quite clear:
- 1.1605 (Tuesday’s high) now acts as first support
- 1.1578 (reclaimed low from January) reinforces the base
As long as this 1.1578-1.1605 region holds, dips look buyable and the bias remains tilted to the upside.
However, a break below this zone would invalidate the bullish structure and likely drag the pair back into a more defensive, dollar-supported environment. For now, sentiment has improved materially, but this is still subject to many moving parts. If oil continues lower and risk sentiment holds, there’s room for EUR/USD to grind higher. But if tensions flare up again, this could unwind just as quickly.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.