EUR/USD is poised for potential upward movement as it sits near key resistance levels, though traders are seeking a fresh catalyst for further gains.

After a rally from the March monthly low, the pair has encountered significant structural resistance in the 1.1800 area, which has contained numerous daily highs and lows as well as monthly highs since June 2025.

Investors are closely watching geopolitical developments, particularly regarding the conflict with Iran, as a peaceful resolution could lead to lower oil prices, benefiting the eurozone economy and the euro itself.

A resolution might also contribute to lower U.S. yields, eroding the dollar's yield advantage over the euro. Should the 2-year U.S.-German yield spreads tighten, this could provide support for EUR/USD gains.

However, technical indicators suggest that the pair may need additional time to overcome the resistance around 1.1800. The daily Relative Strength Index (RSI) is approaching overbought territory, indicating a potential need for a corrective move before the broader rally can resume. Moreover, the daily cloud top, which has stalled the recent rally, is set to begin declining on Friday, potentially adding short-term downward pressure on EUR/USD.

If the pair successfully clears the 1.1800 resistance, the rally from the March low could gain momentum, with the January monthly high at 1.2084 becoming the next target.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)