EUR/USD declined by 190 points last week, after which bearish pressure faded, while bulls failed to launch a meaningful counterattack. At present, there is no discussion of a renewed conflict in the Middle East, although on Monday Donald Trump threatened Iran with new strikes if a nuclear agreement is not signed within 60 days. Trump also stated that the United States could take control of the Strait of Hormuz and charge vessels for security services.

At this stage, however, these statements remain largely rhetorical. Negotiations between Tehran and Washington have only just begun, and both sides have two months to break the diplomatic deadlock. The very fact that a temporary ceasefire agreement was signed last week already says a great deal. Nevertheless, traders remain reluctant to draw conclusions and abandon the safe-haven U.S. dollar. The situation is gradually moving in the right direction, but it could deteriorate again at any moment. The market understands this, which is why bulls remain on the sidelines.

From a local perspective, the market remains in a bearish phase, while the broader trend remains bullish. Traders can currently consider positions only from imbalance 17. Opening long positions requires a change in the technical picture, such as the invalidation of imbalance 17.

Geopolitics moved into the background last week. Tehran and Washington signed a memorandum of understanding, extended the ceasefire for 60 days, and began work on reopening the Strait of Hormuz. Nuclear negotiations began on Sunday in Switzerland. However, the market did not deliver the expected decline in the U.S. dollar following the reduction in geopolitical tensions. Nor did the euro benefit from the ECB's tighter monetary policy stance.

As a result, bears continue to control market momentum despite the prevailing fundamental and geopolitical backdrop. In this situation, it is necessary to wait for the bearish phase to run its course. The broader bullish trend remains intact.

Bearish imbalance 16 ultimately held, but price moved above it, so it would be premature to treat it as a confirmed sell signal. In my view, if not for the FOMC meeting, the pair would not have experienced such a significant decline. Consequently, imbalance 16 was close to being invalidated, and market developments appeared to be moving in that direction.

The current technical picture points to the continuation of the bearish impulse that began on April 17. On Friday, liquidity was taken below the March 19 and March 30 lows, which offers some hope for the bulls, but for now it remains only hope. Two days have passed, and the euro remains much closer to another decline than to a recovery. In addition, bearish imbalance 17 was formed on Friday.

It is worth emphasizing once again that the entire appreciation of the U.S. dollar between January and March was driven primarily by geopolitical developments. As soon as the United States and Iran agreed to a ceasefire, bearish pressure immediately subsided, and bulls dominated trading for more than a month. At present, the agreement has been signed, and the market had been preparing for another advance in EUR/USD, but the dollar received substantial support from the Federal Reserve's shift toward a more hawkish stance.

Despite last week's dollar strength, the expectation remains that the current bearish impulse will eventually end and that the broader bullish trend will resume.

There was no economic data on Monday. Throughout the day, however, a large number of geopolitical headlines crossed the wires. Despite the fact that negotiations ultimately took place, the market continues to favor EUR/USD selling. In my opinion, current market movements are not entirely consistent with the broader fundamental backdrop.

There remain numerous reasons for bulls to stay active in 2026, and the conflict in the Middle East has not diminished them. Structurally and fundamentally, Trump's policies, which contributed to the sharp decline in the dollar last year, have not changed. At present, there are no significant long-term support factors for the U.S. dollar despite the hawkish tone of the FOMC.

EUR/USD is approaching a series of significant lows and swing points where liquidity may be taken. Such a move could serve as a signal for a reversal of the current bearish impulse.

News Calendar for the United States and the Eurozone

• Germany – Manufacturing PMI (07:30 UTC)
• Germany – Services PMI (07:30 UTC)
• Eurozone – Manufacturing PMI (08:00 UTC)
• Eurozone – Services PMI (08:00 UTC)
• United States – Manufacturing PMI (13:45 UTC)
• United States – Services PMI (13:45 UTC)

The June 23 economic calendar contains six releases, with particular attention warranted for the European PMI data. Economic reports may influence market sentiment throughout Tuesday's trading session.

EUR/USD Forecast and Trading Advice

In my view, the pair remains in the process of forming a broader bullish trend. The fundamental backdrop shifted sharply in favor of the bears four months ago, but the trend itself cannot yet be considered canceled or completed. Therefore, bulls may launch a new advance after liquidity is taken below clearly defined lows, although opening long positions at present is not advisable. First, the bearish impulse must be completed and bullish patterns must emerge.

For now, traders should wait for new patterns to form, preferably bullish ones. Last week, bearish imbalance 17 was formed and may be used as a basis for short positions. Attention should also be paid to the proximity of four significant swing points where liquidity may be taken, potentially paving the way for a new bullish impulse.