EURUSD temporarily consolidates before next leg down

EURUSD has steadied near 1.1620, following its recent rebound from four-month lows. However, how long the pair will remain in the current range is anyone’s guess. Market participants appear deeply uncertain, and for good reason. Behind this short-term recovery lie Trump’s comments regarding the Middle East conflict. The US President believes that the standoff is almost resolved, developing faster than expected. These statements have calmed energy markets, pulling oil prices nearly 15% below Monday’s peaks. As a result, inflation concerns have eased, along with demand for safe-haven assets, including the dollar.

Still, not everyone is ready to take the American leader at his word. Tehran has already pushed back against Washington’s optimistic commentary, stressing its determination to block crude shipments through the Strait of Hormuz. Commonwealth Bank of Australia analysts warn traders that this vital route could remain impassable not for weeks, but for months. Such uncertainty forces investors to tread carefully, capping the single currency’s upside potential and fueling volatility.

The eurozone's structural vulnerability only adds fuel to the fire. Germany—a major European economy—saw a significant decline in industrial orders, along with falling exports and shrinking production. The energy shock has a disproportionately greater impact on European costs than on American ones, given that the US is largely self-sufficient. It is this asymmetry that creates a sustainable structural advantage for the dollar.

The technical setup aligns with fundamental factors. A corrective rebound from 1.1506 has recently settled near 1.1629. Meanwhile, the Relative Strength Index (RSI) has exited oversold territory and now sits at 32. However, there are no signs of the pair’s decisive movement in any direction. EURUSD could either extend its recent uptick or continue trading in a flat. The Chaikin Oscillator, though still being positive, is climbing slower than before. In other words, accumulation momentum is weakening, and capital inflows from buyers are reducing. Taken together, these signals suggest that the recent rebound is a technical correction rather than a trend reversal.

Check out the following trading plan:

Sell EURUSD at the current price, with Take profit at 1.15100 and Stop loss at 1.17050.

The forecast is valid from March 11 till March 18, 2026.