EUR/USD Weekly Outlook for April 13, 2026: Everyone Wants Peace, No One Wants Peace

• Trump promises peace and prosperity after securing a truce with Iran, but Israel remains committed to its operations in Lebanon, prioritizing its national security despite the broader push for de-escalation. These tensions are bad news for bonds, because of inflation risk, and for the dollar. Energy prices remain high, and central banks are heading into a difficult summer after inflation surged in the U.S.
• Europe is among the regions most exposed to the current geopolitical backdrop, with key industries heavily dependent on oil and gas. They could face both supply shortages and unsustainable costs unless the Strait of Hormuz is reopened on acceptable terms.
• EUR/USD has bounced from support and reclaimed the 1.17 level. For the single currency, the risk of a break below 1.14 has faded for now, and attention is turning to resistance levels.

Economic Slowdown Is the Risk for 2026

The two-week truce agreed between the United States and Iran will have to be used wisely during the talks now underway in Pakistan, where both sides are trying to lay the groundwork for a lasting peace. In the background, however, military tensions between Israel and Lebanon continue to keep the Strait of Hormuz effectively unusable. Added to that is Trump’s threat of a naval blockade following the failure of the first round of negotiations.

Oil and gas prices remain under pressure, raising serious concern among central banks and Western governments, which risk having to manage both energy rationing this summer and another spike in inflation.

March U.S. consumer-price data has put Trump in a difficult position. With inflation rising to 3.3% from 2.4%, the U.S. is seeing a renewed acceleration in prices that the Federal Reserve had previously brought under control with notable success.

In its Beige Book, the Fed continues to leave the door open to a possible rate cut by year-end if unemployment begins to show signs of a lasting increase. At the same time, Powell is not underestimating the inflationary impact of current developments and still considers the present level of interest rates appropriate.

Europe faces the same problems, with the added burden of political fragmentation that continues to block any common diplomatic or economic initiative, as well as a unified energy policy capable of taking advantage of the continent’s scale. These are the European Union’s familiar structural weaknesses. The rise in long-dated yields is nevertheless signaling inflation risk, something the ECB will have to take into account with further rate increases.

EUR/USD, Still Stuck in a Range for a While Longer

The sideways pattern in EUR/USD remains intact. The truce agreements have given the euro room to catch its breath and look at the coming weeks with somewhat greater calm, both on the energy-risk front and on the inflation front.

It will take time to clear out the damage, but from a technical standpoint EUR/USD has once again entered a rebound phase just as the MACD reached oversold territory, a setup that in both 2024 and 2023 allowed the single currency to recover. Any move back toward the 1.15 area should pave the way for a push toward the upper end of the 1.18-1.20 range, even in a climate still dominated by uncertainty.

The next monthly closes in the Dollar Index will be important in determining whether the greenback’s direction in spring and summer 2026 will in fact turn bullish.

According to the momentum oscillator, once the index moves into oversold territory and then triggers a bullish signal, the dollar enters a favorable phase that typically pushes it at least toward the midline of its regression channel. If that signal is confirmed, it would imply a recovery of at least 6% to 7% for the greenback.

Since 2008, that signal has never proved false. If it were to be activated, it would represent an excellent entry opportunity.

But that is precisely the point: the two-week truce agreed between Iran and the United States has, for now, prevented the bullish signal from being triggered. The sharp rebound in EUR/USD confirmed as much, showing that the market is still unwilling, at least for now, to move decisively back into the dollar.