EURUSD collapses at the start of the week: failed talks trigger a market shock

The trading week began with a drop in EURUSD after the breakdown of talks between Iran and the United States. EURUSD is trading around 1.1680. Details in our analysis for 13 April 2026.

EURUSD forecast: key takeaways

• Another failure in negotiations between Iran and the United States
• The U.S. failed to win the trust of the Iranian delegation
• The U.S. GDP growth forecast for 2026 has been cut to 0.9%
• EURUSD forecast for 13 April 2026: 1.1770

Fundamental analysis

The EURUSD outlook takes into account that the pair opened the week with a gap down, plunging from Friday’s highs near 1.1720 to the 1.1670–1.1680 area. The reason was the collapse of peace talks between the U.S. and Iran in Islamabad and a renewed threat of a naval blockade from Washington. The market switched from hopes of de-escalation to full risk-off mode.

The key weekend headline that flipped market expectations was the failure of negotiations between the U.S. and Iran in Islamabad.

Talk outcomes:

• U.S. Vice President J.D. Vance (James David Vance) confirmed the sides failed to reach a mutually acceptable deal. Washington’s key demand—removing Iran’s stockpiles of enriched uranium—was labeled a red line by Tehran and rejected outright.
• Iranian parliament speaker Mohammad Bagher Ghalibaf said the U.S. failed to win the Iranian delegation’s trust despite constructive initiatives.
• Donald Trump immediately announced a naval blockade of all vessels entering and leaving Iranian ports. U.S. Central Command (CENTCOM) will enforce the order starting at 10:00 a.m. Eastern Time on Monday.

Last week was marked by a euro rally on expectations of de-escalation and the reopening of the Strait of Hormuz. The collapse of talks instantly put the geopolitical risk premium back into prices. Capital fled into the dollar as the primary safe haven, driving EURUSD sharply lower.

The market is now in “sell first, ask questions later” mode. But if signs of a return to diplomacy appear, the dollar could lose its gains just as quickly.

In its latest Economic Bulletin, the European Central Bank confirmed a gloomy outlook: the Middle East conflict creates upside risks to inflation and downside risks to euro-area growth. The 2026 GDP growth forecast was cut to 0.9%. Inflation, by contrast, is expected at 2.6% in 2026, with a peak in the second quarter at 3.1%.

Even though the U.S. economy is also hurt by expensive oil, the dollar benefits as the main reserve currency and the primary safe-haven asset in times of crisis. Strong labor-market data (178K jobs created versus a 60K forecast) also supports the Fed’s hawkish bias.

EURUSD opened the week with a gap down after U.S.–Iran peace talks failed and a naval blockade was announced. The market shifted into risk-off mode, which typically strengthens the dollar. At the same time, a return to diplomacy remains possible, and technically the daily uptrend has not yet been broken.

Technical outlook

On the H4 chart, EURUSD formed a Shooting Star reversal pattern near the upper Bollinger Band. The session opened with a price gap, and quotes continue to form a corrective wave as the pattern plays out. Given that price remains within an ascending channel, the downside target for the pullback may be support near 1.1655. If price rebounds from this level, the uptrend could resume.

At the same time, today’s EURUSD forecast also allows for another scenario: the pair may fill the gap, resume gains, and test resistance near 1.1770. If resistance is broken, the uptrend could extend.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (Intraday)
• Trend: bullish
• Key resistance levels: 1.1710 and 1.1770
• Key support levels: 1.1655 and 1.1605

EURUSD trading scenarios for today

Base scenario (Buy Stop)

A move and hold above 1.1710 will confirm continuation of the uptrend after the correction and open the way to 1.1770 and then 1.1820.

• Take Profit: 1.1770
• Stop Loss: 1.1685

Alternative scenario (Sell Stop)

A break below 1.1655 will point to continuation of the corrective wave and stronger selling pressure.

• Take Profit: 1.1605
• Stop Loss: 1.1685

Risk factors

Upside risks include a stronger dollar on the back of U.S. macro data and Fed signals. Additional pressure could emerge if the geopolitical backdrop deteriorates, reviving demand for the dollar as a safe haven and triggering a pullback in EURUSD from current levels.

Summary

EURUSD began the session with a price gap and may attempt to fill it, even as geopolitical risks remain elevated. EURUSD technical analysis suggests a move toward 1.1770 after the correction.

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