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The EUR/USD pair showed slight growth on Monday and Tuesday, which may be a reaction to imbalance 12, which is "bullish." Thus, bulls have a new opportunity to launch an attack toward imbalance 11. Imbalance 11 remains a resistance zone for EUR/USD, and the recent chart picture is quite complex and ambiguous. However, the issue is not only the technical picture. For example, Friday's US labor market and unemployment data were ignored. And it was ignored by the bears, who have been attacking almost non-stop over the past two months. Does this mean that no one wants to sell the pair and, accordingly, buy the dollar anymore? At least without a new escalation of the war in the Middle East? Indeed, how long can the US dollar continue rising based solely on the war in the Middle East? A year?
All of the US dollar's growth over the past 4–5 weeks has been driven by geopolitics. Now, traders prefer to quietly wait for developments, unsure of what to do. Trump alternates between wanting to reopen the Strait of Hormuz and shifting responsibility to other countries. At times he speaks of successful negotiations with Iran, and at other times he promises to destroy it. We see the reflection of these events on the chart. I have repeatedly said that I do not believe in the end of the bullish trend, despite the break of key trend-forming lows. The movement of the past two months could become a bearish trend if geopolitics continues to strongly support the dollar. However, at the moment, I still doubt the bears' ability to attack continuously over a long period. Further growth of the US dollar is possible only if geopolitics continues to provide strong support to bears. And, as I have already said, this requires not just a tense situation in the Middle East, but one that continues to worsen.
The technical picture is beginning to transform and is becoming very interesting. First, the price may soon react to imbalance 11. This would be the second reaction, which could be weaker—or may not occur at all. However, I would like to remind you once again that the bullish trend remains intact, and near imbalance 11 only a sell signal may form. Second, the price may react to imbalance 12, thereby forming a bullish signal within a bullish trend. Another important point is the potential liquidity sweeps from the last three bullish swings, which may coincide with the reaction to imbalance 11. Thus, it is still too early to say that bulls are launching a full-scale offensive, but the probability exists. The key condition is that a ceasefire between Washington and Tehran is reached.
The news background on Tuesday was quite weak, and after Friday and Monday, no one expected strong movements following another US report. Traders continue to focus solely on geopolitics and are currently waiting for another decision from Donald Trump. A new deadline in negotiations with Tehran was set for April 7, after which a devastating strike on Iran would follow. Either Trump extends the negotiation timeline today or carries out the strike.
Bulls still have many reasons to attack, and even the outbreak of war in the Middle East has not reduced them. Structurally and globally, Trump's policies—which led to a significant drop in the dollar last year—have not changed. In the near term, the US currency may strengthen amid a flight to safety, but this factor cannot support it indefinitely and requires continuous escalation of the Middle East conflict. There are no other strong supporting factors for the US dollar. I still do not believe in a bearish trend. The dollar has received temporary market support, but what will allow bears to continue attacking?
Economic Calendar for the US and the Eurozone:
On April 8, the economic calendar contains two relatively minor entries. The impact of the news background on market sentiment on Wednesday is expected to be weak.
EUR/USD Forecast and Trading Tips:
In my opinion, the pair remains in the stage of forming a bullish trend. The news background sharply shifted direction four weeks ago, but the trend itself cannot yet be considered fully canceled or completed. Therefore, in the near term, traders need new patterns and signals to form short-term forecasts and open positions.
In the near future, bears may receive a signal at imbalance 11, but if geopolitics does not worsen beyond current levels, the signal may not materialize. Bulls, on the other hand, may look for a signal within imbalance 12, which could allow opening long positions with a target around 1.1670.
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