EUR/USD Technical Analysis and Market Outlook - April 17, 2026

Technical Overview

The EUR/USD 4-hour chart reflects an ambiguous wave structure. While the long-term upward trend originating in January remains intact, the current price action lacks clear definition, warranting a transition to lower timeframes to identify actionable short-term patterns.

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Analysis of lower timeframe data reveals a classic five-wave impulse structure, characterized by an extended third wave. If this interpretation holds, the impulse phase is complete, and the pair is currently engaged in a corrective phase. Potential recovery in the euro may face resistance near the 1.1824 level.

Market Reaction to Geopolitical Developments

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The EUR/USD pair gained 35 points on Friday, largely unfazed by the announcement regarding the reopening of the Strait of Hormuz by Iran's Foreign Ministry. Initial volatility in oil and the US dollar proved transitory, as the dollar quickly recovered its losses within a few hours, suggesting that the market had already priced in potential geopolitical de-escalation.

Despite the reopening of the strait, the current technical structure suggests the potential for a further downward wave. Market participants appear cautious, as the absence of formal peace agreements between the United States and Iran implies that regional tensions could resurface unexpectedly.

Strategic Outlook

The instrument remains within an overarching upward trend, though it is currently confined to a corrective structure. This correction may extend in duration only if a sustained and comprehensive ceasefire is established among all involved parties in the Middle East.

In the absence of a stable geopolitical resolution, the pair is at risk of initiating a new downward sequence or a significant corrective wave from current price levels. Traders are advised to prioritize clear wave structures and adhere to strict risk management, including the use of stop-loss orders, given the inherent uncertainties in current market conditions.

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