24.06.202618:36 Forex-elemzések és áttekintések: EUR/USD – Smart Money Analysis: The Euro Continues to Decline

The EUR/USD pair fell by 190 points last week. The new week began with an additional 130-point decline in the euro. What is driving such a powerful bearish advance? At present, there is no discussion of a renewed conflict in the Middle East, although Donald Trump warned on Monday that new strikes against Iran could follow if a nuclear agreement is not signed within 60 days.

The Federal Reserve adopted a more hawkish tone at its June meeting, but an entire week has passed since then, while the bears continue to press their advantage as if the prospect of a rate hike had only become known yesterday. The ECB's stance at its latest meeting could hardly be described as dovish enough to justify a week-long decline in the euro. Negotiations between Tehran and Washington have begun, and both sides now have two months to resolve the nuclear issue. The signing of a temporary truce last week already spoke volumes. Nevertheless, traders are not merely holding dollars as a safe-haven asset in case tensions flare up again in the Middle East—they continue to buy the currency aggressively, as if the conflict had resumed and a blockade of the Strait of Hormuz had been accompanied by a closure of the Bab el-Mandeb Strait.

The downward move has been so strong that price has not even attempted to rebalance into inefficiency zones (imbalances). As a result, traders currently lack trading signals despite the sharp decline. In my view, there are no fundamental reasons whatsoever for such a strong rise in the U.S. dollar at this stage.

Geopolitical developments ultimately moved into the background last week. Tehran and Washington signed a memorandum of understanding, extended the truce for 60 days, and began working toward reopening the Strait of Hormuz. Nuclear negotiations officially began in Switzerland on Sunday. However, we did not see the expected decline in the dollar resulting from lower geopolitical tensions. Nor did we see euro strength following the ECB's tighter monetary policy stance. The bears simply refuse to relinquish control despite the prevailing geopolitical and informational backdrop. Under these circumstances, all that remains is to wait for the bearish advance to end—or at least for new sell signals to emerge.

Bearish imbalance 16 ultimately held, but price moved above it, so I would not interpret it as a confirmed sell signal. In my opinion, without the Federal Reserve meeting, the decline in the pair—at least on this scale—would not have occurred. In that case, imbalance 16 could very well have been invalidated, and market developments were moving in that direction. The current technical picture points to the continuation of the bearish impulse that began on April 17. The bearish imbalance was neither fully mitigated nor transformed into a valid sell signal.

The economic backdrop on Wednesday was virtually nonexistent. Germany's IFO Business Climate Index was released in the morning and matched forecasts exactly. Therefore, the euro's latest decline could not have been triggered by this report. Donald Trump made no aggressive statements today, and there are currently no signs that negotiations between Tehran and Washington are at risk of failure. I see no informational basis for another round of dollar strength on Wednesday.

The bulls still have numerous reasons to return to the market in 2026, and the conflict in the Middle East has not reduced their number. Structurally and globally, the policies of the Trump administration—which contributed to the sharp decline in the dollar last year—have not changed. At present, I see no major sources of support for the U.S. currency despite the hawkish tone of the FOMC. EUR/USD is approaching a series of lows and swing points where liquidity could be taken, potentially providing a signal for a reversal of the current bearish impulse.

News Calendar for the United States and the Eurozone:

• Germany – GfK Consumer Confidence Index (06:00 UTC);
• United States – Core PCE Price Index (12:30 UTC);
• United States – Durable Goods Orders (12:30 UTC);
• United States – Q1 GDP (12:30 UTC);
• United States – Initial Jobless Claims (12:30 UTC).

The economic calendar for June 25 contains five scheduled releases, with U.S. GDP standing out as the most significant. Economic data may influence market sentiment on Thursday, but it is clear to all market participants that economic reports are not the primary driver of the current move.

EUR/USD Forecast and Trading Tips:

In my view, the pair remains in the process of forming a bullish trend. The fundamental backdrop shifted sharply in favor of the bears four months ago, but the broader trend cannot yet be considered canceled or completed. Therefore, the bulls may launch a new advance after liquidity is taken below clearly defined lows. However, opening long positions at this stage appears premature. The current bearish impulse should first come to an end, and bullish patterns need to emerge.

Last week, bearish imbalance 17 was formed and can be used as a reference for opening short positions. However, I would like to draw attention to the proximity of four significant swing points that could serve as liquidity targets. Once liquidity is taken from these areas, a new bullish impulse may begin. In any case, the current decline is so strong that price is largely ignoring technical patterns and swing levels.