The extraordinary rally of the EURUSD appears to be nearing its end. Since early March, the pair has surged by 10.7%, reaching as high as 1.15200, with much of the momentum driven by sharp gains during Asian trading hours in April. However, the bullish drivers that fuelled this ascent now seem to be fading.

Trade tensions between the United States and China have entered a period of de-escalation, with both sides signalling a willingness to seek compromise. In response, U.S. Treasury yields have stabilised—an indicator of calmer market sentiment—which in turn has brought more balance to the currency markets. Any progress towards formal negotiations between Washington and Beijing could further challenge the recent weakness in the U.S. Dollar.

Technically, the EURUSD has now overshot its previous upside targets, suggesting that a deeper reversal could be on the horizon. The pair’s current levels may represent a turning point, with primary downside targets seen between 1.10500 and 1.11500.

Against this backdrop, a short position at current levels is being considered, with a stop-loss set at 1.19500 in case of renewed Euro strength.