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Euro Forecast: EUR/USD Tests 2-Week Highs on Potential Trump “TACO”

By :   Matt Weller CFA, CMT , Head of Market Research
March 23, 2026 5:59 PM

EUR/USD Key Points

  • President Trump’s “very good and productive” talks between the US and Iran have sent crude oil down more than -10%, US stocks surging, and the US dollar sharply lower.
  • The primary takeaway for traders is that the US is looking for a potential off-ramp from the ever-escalating conflict.
  • EUR/USD remains within a bearish channel dating back to late January, leaving the medium-term bias to the downside for now.

In a generally quiet period for economic data, this week’s trade was always going to be driven by developments in Middle East, though most traders probably didn’t expect the headlines to hit so hard and heavy this early.

Over the weekend, President Trump issued a 48-hour ultimatum to Iran before bombing key infrastructure in the region, sending risk markets lower to start the week. Just before the US open though, President Trump suspended the strikes for five days, citing “very good and productive conversations” with Iran:

Source: Truth Social

Hopes of yet another “TACO” situation sent crude oil down more than -10%, US stocks surging, and the US dollar sharply lower.

The moves have since moderated slightly as Iranian media denied any contact with the US, but the dominant takeaway for traders is that the US is looking for a potential off-ramp from the ever-escalating conflict. Time will tell if that sentiment holds, but for now, the first signs of a potential “light at the end of the tunnel” for the conflict are enough to support risk appetite and weigh on the dollar.

Euro Technical Analysis: EUR/USD Daily Chart

Source: Tradingview, StoneX

Turning our attention to the charts, EUR/USD had rallied nearly 150 pips from its overnight lows to approach the top of its post-war bearish channel in the mid-1.16s at one point today before pulling back toward 1.1600 as of writing.

The world’s most widely-traded currency pair remains within a bearish channel dating back to late January, and even a break above the upper trend line would still leave the imminent “death cross” of the 50-day EMA and 200-day MA near 1.1675 as overhead resistance for bulls to navigate before flipping the medium-term bias back to the topside.

-- Written by Matt Weller, Global Head of Research

Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX

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