EUR/USD Price Forecast: Short-term outlook turns bearish after breaking below 1.1655

• EUR/USD declines further toward 1.1655 as the US Dollar continues to strengthen amid several supportive factors.
• Both the US and China maintain that the Strait of Hormuz should remain open.
• The Federal Reserve is expected to keep interest rates unchanged this year.

The EUR/USD pair continues its decline for a fourth consecutive session on Friday, slipping 0.15% to around 1.1653 during Asian trading hours. The pair remains under pressure as the US Dollar (USD) strengthens further after encouraging developments from Thursday’s meeting between United States (US) President Donald Trump and Chinese President Xi Jinping.

At the time of writing, the US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, is up 0.15% near 99.00, marking its highest level in two weeks.

Remarks from both Trump and Xi suggested improving trade relations between the US and China, while both leaders also emphasized the importance of keeping the Strait of Hormuz open.

The US Dollar is also drawing support from growing expectations that the Federal Reserve (Fed) will keep interest rates unchanged throughout this year.

Meanwhile, in the Eurozone, most economists surveyed by Reuters expect the European Central Bank (ECB) to implement an interest rate hike at its June policy meeting.

Technical Analysis

EUR/USD remains under pressure around 1.1653 during the Asian session, with the pair maintaining a bearish short-term outlook as it trades below the 20-day Exponential Moving Average (EMA) at 1.1710. A confirmed breakdown of the Double Top pattern after falling beneath the April 30 low at 1.1655 signals the potential for further downside extension.

Meanwhile, the Relative Strength Index (RSI) near 44 continues to point lower, suggesting bearish momentum remains active and selling pressure has not yet faded.

To the upside, the first resistance level is seen at the 20-day EMA around 1.1710. A move back above this zone could reduce near-term bearish pressure and support a broader recovery toward 1.1800. On the downside, key support levels are located at the April 8 low of 1.1589 and the April 6 low near 1.1505.