EURUSD remains resilient to escalating Middle East situation

The EURUSD pair opened Monday’s session with a downward gap, driven by escalating Strait of Hormuz tensions over the weekend. However, buyers were not ready to give up and quickly seized the initiative. As a result, quotes almost immediately returned to the 1.17570 level. It appeared that this negative scenario had already been priced in by the market.

Last week’s pullback from a local high of 1.18483 was mostly technical, triggered by profit-taking ahead of the weekend. Uncertainty over the outcome of peace talks between Washington and Tehran prompted investors to reduce their positions. Due to this strategy, the market’s initial reaction today was quite reserved—everything went according to plan.

Meanwhile, the key fundamental factor is no longer the escalating Middle East situation itself, but rather its near-term prospects. The United States and Iran continue to negotiate, and traders do not expect the process to come to a complete halt, keeping a flicker of hope alive for an agreement between the two sides. With this in mind, data from State Street shows that currency hedging against the dollar among global institutional investors has just reached a two-year high.

From a technical standpoint, we see building buying activity and bulls’ modest attempt to resume the uptrend after the recent corrective pullback from the local high of 1.18483. The Chaikin Oscillator confirms this dynamic, remaining in positive territory despite mounting pressure since April 15. Moreover, the pace of its decline is slower today, suggesting that an upward reversal is probable and capital flows could rotate back into EURUSD. At the same time, the Stochastic Oscillator has been going down since April 17, following its exit from the overbought zone—which it had entered on April 13. This is a sign of temporary profit-taking ahead of the pair’s next move.

Pay attention to the trading plan down below:

Buy EURUSD at the current price, with Take profit at 1.18400 and Stop loss at 1.16900.

The forecast remains valid from April 20 till April 27, 2026.