EURUSD surged on the news: who is behind the sharp market reversal

An unexpected turn of events in the Middle East triggered a sharp rise in the EURUSD rate, with quotes testing the 1.1670 mark. Find out more in our analysis for 8 April 2026.

EURUSD forecast: key takeaways

• Donald Trump announced agreement to a two-week ceasefire with Iran
• Tehran may agree to reopen the Strait of Hormuz
• Publication of the FOMC minutes
• EURUSD forecast for 8 April 2026: 1.1770

Fundamental analysis

The EURUSD forecast takes into account that the pair is going through a truly dramatic reversal caused by an unexpected geopolitical development. The Asian session opened with a powerful upward surge: the pair broke through the 1.1650 level and is now consolidating around 1.1670.

The main news of the day that turned the market upside down is the unexpected statement by the US President. Just an hour and a half before the expiry of his own ultimatum, in which he threatened to destroy Iran’s infrastructure, Donald Trump announced agreement to a two-week ceasefire with Iran.

According to Reuters and CNN, the terms of the ceasefire are as follows: the ceasefire will come into force provided that Tehran agrees to reopen the Strait of Hormuz to tanker traffic. An important nuance is that the Prime Minister of Pakistan, Shahbaz Sharif, acted as the mediator in the negotiations and proposed this two-week time-out for diplomatic talks between the US and Iran. Israel also agreed to the ceasefire.

Beyond geopolitics, the euro gained its own powerful trump card. On Monday, 6 April, ECB Governing Council member and Governor of the Bank of Greece Yannis Stournaras made a hawkish statement that the market did not ignore.

He stated that if the current energy shock, with oil above 100 USD per barrel, proves sufficiently prolonged and starts to affect inflation expectations and wages, the European Central Bank will have to consider tightening monetary policy.

What this means for the market:

• The market instantly revised expectations for the ECB rate. The probability of a hike at the 30 April meeting rose to more than 80%
• This sharply contrasts with the Federal Reserve’s position, where the market still expects a rate cut, although with lower probability after the strong US labour market data
• The interest rate differential is beginning to work in the euro’s favour, giving additional momentum to EURUSD growth

Today’s EURUSD forecast also takes into account the release of the FOMC minutes from the Federal Reserve’s March meeting. The market will look there for the answer to the main question: how do Fed members assess the impact of the oil shock on future policy? Hawkish notes in the minutes may limit EURUSD growth.

The euro is experiencing a perfect storm in reverse: lower geopolitical risks have coincided with aggressively hawkish ECB rhetoric. The pair has broken through key technical levels, and the path to 1.1700 and higher is now open. At the same time, the market remains highly sensitive to any news from the conflict zone, and a two-week ceasefire is not peace, but only a pause. The current rise is partly a news-driven trade, and it may be corrected just as sharply at the first signs of a collapse in negotiations.

Technical outlook

On the H4 chart, the EURUSD pair formed a Shooting Star reversal pattern near the upper Bollinger Band. At this stage, it may form a corrective wave following this signal. Since quotes have moved out of an ascending channel, the 1.1650 support level may act as the pullback target. A rebound from this level would open the way for continued upward momentum.

At the same time, today’s EURUSD forecast also suggests another scenario. Quotes may continue to rise and test the 1.1770 resistance level. Then, after breaking above resistance, they may continue their upward trajectory.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (Intraday)
• Trend: upward
• Key resistance levels: 1.1770 and 1.1825
• Key support levels: 1.1650 and 1.1535

EURUSD trading scenarios for today

Main scenario (Buy Stop)

Consolidation above the 1.1770 level would indicate stronger buying pressure amid geopolitical changes and falling demand for the dollar as a safe-haven asset.

• Take Profit: 1.1825
• Stop Loss: 1.1740

Alternative scenario (Sell Stop)

A breakout and consolidation below the 1.1650 support level would confirm weakening bullish pressure and the formation of a downward wave.

• Take Profit: 1.1535
• Stop Loss: 1.1680

Risk factors

Risks to growth include a possible rise in tensions around Iran following Trump’s statements and a breakdown in the temporary ceasefire, which could again boost demand for the dollar. Additionally, more hawkish signals from the Federal Reserve may support a decline in the EURUSD rate and cancel the bullish scenario.

Summary

The euro is gaining strength on the news, with the temporary ceasefire in the Middle East and the expectation of the FOMC release weakening the USD. EURUSD technical analysis suggests growth towards 1.1770 after a correction.

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