EUR/USD Analysis: Geopolitical and Central Bank Expectations Dominate, Exchange Rate Enters Range-Bound Trading
2026-04-28 20:28:36
On Tuesday (April 28), during the European session, the exchange rate was generally in a downtrend channel, falling back to near the key support level. The battle between bulls and bears was intense, and the short-term trend was volatile and fluctuating.
Geopolitics: The ongoing US-Iran conflict fuels fluctuating risk aversion.
Recent market sentiment has been heavily influenced by the situation in the Middle East. Previously, the market was optimistic that the United States and Iran would resume negotiations in Islamabad later this week or early next week. The geopolitical tensions eased briefly, the demand for the safe-haven dollar weakened, and the euro/dollar once climbed to the 1.1800 level, a new high since February this year.
However, the foundation for easing tensions is extremely fragile. The United States continues to blockade Iranian ports in the Strait of Hormuz and increase its military deployment in the Middle East, actions that have drawn severe criticism from China, which has characterized them as dangerous and irresponsible. Meanwhile, the United States has explicitly rejected Iran's peace proposal, arguing that it fails to resolve the core contradictions of the nuclear issue, further escalating regional uncertainty.
With Brent crude oil prices currently holding steady above $100, the cost of energy imports in the Eurozone has increased significantly, exerting a persistent implicit pressure on the euro and becoming a major negative factor limiting its appreciation.
Economic data: No major data releases.
Europe: Only routine secondary indicators such as the central bank's credit survey report were released, and the overall performance was lackluster with no significant unexpected fluctuations. This had almost no positive effect on the euro exchange rate and failed to break the current oscillating pattern.
US: Only minor data such as the housing price index, consumer confidence index, and Richmond/Dallas Fed manufacturing index were released. Overall, the data was lackluster, with bullish and bearish influences offsetting each other, failing to provide clear directional guidance for the US dollar, which continued its weak consolidation trend.
Global central banks are in a crucial window of opportunity, and market sentiment is cautious.
This week features two major central bank interest rate meetings, becoming the biggest focus of the market in the short term. The Federal Reserve will hold its interest rate meeting on Wednesday, with the market generally expecting it to maintain the interest rate at 3.50%-3.75%. This meeting will also be Powell's last meeting as chairman before stepping down. Currently, the Fed's leadership transition process is progressing steadily, and personnel changes add uncertainty to the medium- to long-term trend of the US dollar.
The European Central Bank's (ECB) decision will be announced on Thursday. ECB officials have already signaled a rate hike this year, but due to economic uncertainty stemming from geopolitical conflicts in the Middle East, their policy stance remains cautious. The market currently expects the ECB to keep interest rates unchanged this week, using hawkish rhetoric to signal a potential rate hike in June or July.
However, due to rising oil prices, market expectations for hawkishness have increased significantly. If the ECB's statement leans towards conservatism and falls short of the market's aggressive expectations, the euro will face pressure for a rapid correction.
Technical Analysis
(EUR/USD 1-hour chart source: FX678)
From a technical perspective, the current situation is rather complex: a clear downward channel has been suppressing the exchange rate, causing it to fall for several consecutive days. However, the price is now approaching the support level of 1.1682. This support level has temporarily prevented the exchange rate from falling further.
With little movement in the market, prices are likely to fluctuate between recent support and resistance levels today.
It is recommended to buy when the price reaches 1.1682, taking advantage of the upward trend; or, if the price is suppressed by the resistance level at 1.1719 and a downward trend occurs, then you can sell.
Summarize
Overall, the euro/dollar exchange rate is currently constrained by geopolitical risk aversion, economic data from Europe and the US, and expectations of central bank policies, presenting a pattern of volatile fundamentals and bearish technicals.
In the short term, the market is likely to remain range-bound, with multiple resistance levels above and strong support levels below. The recommended strategy is to avoid chasing trends and instead buy low and sell high based on key support and resistance levels.
Geopolitics: The ongoing US-Iran conflict fuels fluctuating risk aversion.
Recent market sentiment has been heavily influenced by the situation in the Middle East. Previously, the market was optimistic that the United States and Iran would resume negotiations in Islamabad later this week or early next week. The geopolitical tensions eased briefly, the demand for the safe-haven dollar weakened, and the euro/dollar once climbed to the 1.1800 level, a new high since February this year.
However, the foundation for easing tensions is extremely fragile. The United States continues to blockade Iranian ports in the Strait of Hormuz and increase its military deployment in the Middle East, actions that have drawn severe criticism from China, which has characterized them as dangerous and irresponsible. Meanwhile, the United States has explicitly rejected Iran's peace proposal, arguing that it fails to resolve the core contradictions of the nuclear issue, further escalating regional uncertainty.
With Brent crude oil prices currently holding steady above $100, the cost of energy imports in the Eurozone has increased significantly, exerting a persistent implicit pressure on the euro and becoming a major negative factor limiting its appreciation.
Economic data: No major data releases.
Europe: Only routine secondary indicators such as the central bank's credit survey report were released, and the overall performance was lackluster with no significant unexpected fluctuations. This had almost no positive effect on the euro exchange rate and failed to break the current oscillating pattern.
US: Only minor data such as the housing price index, consumer confidence index, and Richmond/Dallas Fed manufacturing index were released. Overall, the data was lackluster, with bullish and bearish influences offsetting each other, failing to provide clear directional guidance for the US dollar, which continued its weak consolidation trend.
Global central banks are in a crucial window of opportunity, and market sentiment is cautious.
This week features two major central bank interest rate meetings, becoming the biggest focus of the market in the short term. The Federal Reserve will hold its interest rate meeting on Wednesday, with the market generally expecting it to maintain the interest rate at 3.50%-3.75%. This meeting will also be Powell's last meeting as chairman before stepping down. Currently, the Fed's leadership transition process is progressing steadily, and personnel changes add uncertainty to the medium- to long-term trend of the US dollar.
The European Central Bank's (ECB) decision will be announced on Thursday. ECB officials have already signaled a rate hike this year, but due to economic uncertainty stemming from geopolitical conflicts in the Middle East, their policy stance remains cautious. The market currently expects the ECB to keep interest rates unchanged this week, using hawkish rhetoric to signal a potential rate hike in June or July.
However, due to rising oil prices, market expectations for hawkishness have increased significantly. If the ECB's statement leans towards conservatism and falls short of the market's aggressive expectations, the euro will face pressure for a rapid correction.
Technical Analysis
(EUR/USD 1-hour chart source: FX678)
From a technical perspective, the current situation is rather complex: a clear downward channel has been suppressing the exchange rate, causing it to fall for several consecutive days. However, the price is now approaching the support level of 1.1682. This support level has temporarily prevented the exchange rate from falling further.
With little movement in the market, prices are likely to fluctuate between recent support and resistance levels today.
It is recommended to buy when the price reaches 1.1682, taking advantage of the upward trend; or, if the price is suppressed by the resistance level at 1.1719 and a downward trend occurs, then you can sell.
Summarize
Overall, the euro/dollar exchange rate is currently constrained by geopolitical risk aversion, economic data from Europe and the US, and expectations of central bank policies, presenting a pattern of volatile fundamentals and bearish technicals.
In the short term, the market is likely to remain range-bound, with multiple resistance levels above and strong support levels below. The recommended strategy is to avoid chasing trends and instead buy low and sell high based on key support and resistance levels.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
