• EUR/USD struggles to register any meaningful recovery and hangs near a two-week low.
• Rising Iran tensions and reviving hawkish Fed bets underpin the USD, capping spot prices.
• The technical setup seems tilted in favor of bears and backs the case for further losses.

The EUR/USD pair remains on the back foot through the Asian session on Friday and currently trades around the 1.1680-1.1675 region, just above a nearly two-week low touched the previous day.

Despite a temporary extension of the ceasefire, the lack of progress in peace talks due to the US naval blockade of Iranian ports tempers hopes for a durable de-escalation and keeps investors on edge. Furthermore, elevated Crude Oil prices revive inflationary concerns and fuel hawkish US Federal Reserve (Fed) expectations. This, in turn, assists the US Dollar (USD) in preserving its gains registered over the past three days and acts as a headwind for the EUR/USD pair.

From a technical perspective, spot prices currently hover around the 200-period Exponential Moving Average (EMA) on the 4-hour chart, keeping the immediate tone neutral after the recent slide from higher levels. However, Thursday's breakdown below the 38.2% Fibonacci retracement level of the recent upswing from the March swing low favors the EUR/USD bears. Moreover, the Relative Strength Index (RSI) near 32 suggests lingering downside pressure.

Meanwhile, the slightly negative Moving Average Convergence Divergence (MACD) reading reinforces a lack of clear bullish momentum despite the EMA support. In the meantime, any further weakness could find immediate support near the 50.0% Fibonacci retracement at 1.1648. A convincing break below this zone would open the way toward the deeper retracement levels at 1.1600 and 1.1532, ahead of the cycle floor at 1.1445.

On the upside, initial resistance is located at the 38.2% Fibo. retracement at 1.1696, with a break there exposing the next hurdle at the 23.6% retracement at 1.1755. Nevertheless, the broader setup suggests that the path of least resistance for the EUR/USD pair is to the downside, and any meaningful recovery attempt is more likely to get sold into.

(The technical analysis of this story was written with the help of an AI tool.)

EUR/USD 4-hour chart