Key takeaways
- Pullback driven by geopolitical risk and USD strength: EUR/USD declined ~1.5% from its recent high as stalled US–Iran talks and rising oil prices boosted safe-haven demand for the US dollar.
- Macro backdrop turning supportive for euro: A steepening Eurozone–US rate differential suggests a relatively less dovish ECB versus the Fed, providing underlying support for EUR/USD.
- Technical setup points to potential rebound: Price is testing key support at 1.1665/1.1635 with bullish signals (trend above major MAs, RSI divergence, ascending channel), indicating a possible reversal unless support breaks.
The EUR/USD hit a recent two-month high of 1.1849 printed on last Friday, 17 April 2026, and turned soft due to the stalled second round of US-Iran peace talks, where it declined by 1.5% to hit a low of 1.1669 on Thursday, 23 April 2026.
Secondly, cracks have appeared in the extended ceasefire agreement, where both sides are using force to prevent oil tankers from transiting the Strait of Hormuz, which led to a 10% plus rally in oil prices, increasing the appeal of short-term safe haven demand status on the US dollar.
Interestingly, the EUR/USD’s five-day decline from its recent two-month high has reached an inflection area for a potential bullish reversal from a technical analysis and intermarket perspective.
Let’s uncover these factors in greater detail.
Eurozone/US implied interest rate policy curve spread has steepened
Fig. 1: Eurozone-US implied interest rate policy curve spread as of 23 Apr 2026 (Source: MacroMicro).
The monthly implied future policy interest rate curves for the Eurozone and the US are calculated using short-term interest rate futures that are highly sensitive to the expectations on these countries’ central banks’ monetary policies
The current Eurozone/US implied interest rate policy curve spread for the period from May 2026 to September 2026 has steepened from three months ago, with the current September 2026 reading standing at -1.32% compared to -1.37% three months ago (see Fig. 1).
These observations suggest that the ECB is likely to be less dovish or more hawkish than the Fed, which in turn could provide support for a potentially firmer EUR/USD.
Let’s now focus on the potential short-term trajectory (1 to 3 days) of EUR/USD.
EUR/USD – Minor uptrend phase from 13 March 2026 low remains intact
Fig. 2: EUR/USD minor trend as of 24 Apr 2026 (Source: TradingView).
Despite the five-day decline seen in the EUR/USD, its price actions are still trading above the 20-day, 50-day, and 200-day moving averages.
Watch the 1.1665/1635 key short-term pivotal support, and a clearance above 1.1722 (potential upside trigger) may see the next intermediate resistances coming in at 1.1790, 1.1835, and 1.1890 (also a Fibonacci extension) (see Fig. 2).
On the other hand, failure to hold at 1.1635 and an hourly close below it invalidates the bullish reversal scenario to see the continuation of the corrective decline to expose the next intermediate supports at 1.1575 and 1.1510.
Key elements to support the near-term bullish bias on EUR/USD
The five-day decline of the EUR/USD has reached the intersection area of the 20-day, 50-day, and 200-day moving averages, where the 20-day MA is now shaping an impending bullish crossover above the 50-day MA.
The price actions of the EUR/USD have continued to oscillate within its minor ascending channel in place since the 30 March 2026 low.
The hourly RSI momentum indicator has just shaped a bullish divergence condition at its oversold region on Thursday, 23 April 2026.
Editorial note: This recovered market brief has been cleaned and reclassified by Next Move Markets for educational market intelligence. It is not investment advice.
Next Move Markets desk view
For active traders, this brief should be read through the lens of currency markets rather than as a standalone headline. The key question is whether the theme behind Chart Alert: EUR/USD Drifted Down to 1.1665/1635 Key Support for Potential Bullish Reversal can influence positioning beyond the first reaction. That means watching central-bank expectations, yield differentials, dollar momentum and risk appetite together, not in isolation.
A richer trading read comes from separating the catalyst from confirmation. The catalyst explains why markets are paying attention; confirmation comes from price action, liquidity and cross-asset behavior after the headline is digested. If those signals do not align, traders should treat the move as fragile and keep risk tighter.
What traders should watch next
- Whether the move is confirmed by the U.S. dollar index and short-term rate expectations.
- How London and New York liquidity react once the initial headline risk is absorbed.
- Whether price action respects the latest support and resistance zones instead of fading immediately.
- Any follow-up comments from central-bank officials or data releases that change the rate path.
Risk context
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
Scenario map
The base case is that traders keep this theme on the radar while waiting for confirmation from central-bank expectations, yield differentials, dollar momentum and risk appetite. A stronger continuation scenario requires follow-through after the first reaction, preferably with related assets moving in the same direction. A failure scenario develops if the headline is quickly absorbed, volatility fades and price returns inside the previous range.
For currency markets, the most useful approach is to compare the article theme with live market behavior. If the market confirms the narrative, pullbacks can become more constructive. If the market rejects it, the headline becomes background noise rather than a trading driver.
Execution discipline
- Define the level first: traders should know where the idea is invalidated before thinking about upside or downside.
- Separate news from setup: Chart Alert: EUR/USD Drifted Down to 1.1665/1635 Key Support for Potential Bullish Reversal may explain attention, but entry quality still depends on timing, liquidity and risk/reward.
- Watch confirmation: a clean move usually appears across related markets, not only in one isolated instrument.
- Control exposure: if volatility expands, smaller position sizing can be more professional than chasing the headline.
Next Move Markets treats this kind of brief as a starting point for preparation: identify the driver, map the scenarios, then wait for the market to prove which path is actually being priced.
Next Move Markets desk view
For active traders, this brief should be read through the lens of currency markets rather than as a standalone headline. The key question is whether the theme behind Chart Alert: EUR/USD Drifted Down to 1.1665/1635 Key Support for Potential Bullish Reversal can influence positioning beyond the first reaction. That means watching central-bank expectations, yield differentials, dollar momentum and risk appetite together, not in isolation.
A richer trading read comes from separating the catalyst from confirmation. The catalyst explains why markets are paying attention; confirmation comes from price action, liquidity and cross-asset behavior after the headline is digested. If those signals do not align, traders should treat the move as fragile and keep risk tighter.
What traders should watch next
- Whether the move is confirmed by the U.S. dollar index and short-term rate expectations.
- How London and New York liquidity react once the initial headline risk is absorbed.
- Whether price action respects the latest support and resistance zones instead of fading immediately.
- Any follow-up comments from central-bank officials or data releases that change the rate path.
Risk context
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
Scenario map
The base case is that traders keep this theme on the radar while waiting for confirmation from central-bank expectations, yield differentials, dollar momentum and risk appetite. A stronger continuation scenario requires follow-through after the first reaction, preferably with related assets moving in the same direction. A failure scenario develops if the headline is quickly absorbed, volatility fades and price returns inside the previous range.
For currency markets, the most useful approach is to compare the article theme with live market behavior. If the market confirms the narrative, pullbacks can become more constructive. If the market rejects it, the headline becomes background noise rather than a trading driver.
Execution discipline
- Define the level first: traders should know where the idea is invalidated before thinking about upside or downside.
- Separate news from setup: Chart Alert: EUR/USD Drifted Down to 1.1665/1635 Key Support for Potential Bullish Reversal may explain attention, but entry quality still depends on timing, liquidity and risk/reward.
- Watch confirmation: a clean move usually appears across related markets, not only in one isolated instrument.
- Control exposure: if volatility expands, smaller position sizing can be more professional than chasing the headline.
Next Move Markets treats this kind of brief as a starting point for preparation: identify the driver, map the scenarios, then wait for the market to prove which path is actually being priced.
