15.06.202617:52 Forex Analysis & Reviews: EUR/USD – Smart Money Analysis: Trump's Statements Reduce Bearish Expectations

EUR/USD has risen for six consecutive trading days. Initially, the move appeared to be a standard corrective pullback that would likely end within Bearish Imbalance 16. However, after six days of gains, it can be said that buyers now have a strong opportunity to regain the initiative and resume the broader bullish trend.

I would like to remind readers that over the past several months I have consistently maintained that the bullish trend has not ended. It has merely been paused due to the complex geopolitical environment. A closer look at recent price action supports this view. Last Tuesday and Wednesday, the pair rebounded twice from Bearish Imbalance 16, which could reasonably have been interpreted as a sell signal. Everything appeared logical and technically justified. However, on Thursday the pair posted a strong advance, paused briefly on Friday, and resumed its upward movement on Monday.

Why did this happen? Because on Thursday Donald Trump unexpectedly changed his stance toward Iran and once again stated that a deal could be reached over the weekend. On Monday, this information was confirmed not only by Trump, but also by Iran and Pakistan. Although the agreement has not yet been formally signed, confirmation from all three parties involved in the negotiations significantly increases the probability of a successful outcome. At this stage, market participants appear far more focused on the likelihood of a deal than on what may follow afterward.

Bearish Imbalance 16 is now close to being invalidated, which would represent the first signal that the bullish trend is resuming.

In the near term, both price action and market sentiment will continue to depend heavily on geopolitical developments. If Tehran and Washington ultimately sign a memorandum of understanding, extend the ceasefire, lift restrictions, and make progress on the nuclear issue, sellers may be forced to retreat, while the euro and the pound could resume their upward trajectories.

For now, however, traders remain cautious and are waiting for the agreement to be formally ratified, which may take place in Switzerland on Friday.

At present, there are simply no actionable trading patterns available. If Bearish Imbalance 16 is invalidated, it would indicate that the bearish impulse has been broken. In that case, traders should wait for new bullish patterns to emerge and trade accordingly. A bullish imbalance may form this week, potentially providing future buying opportunities.

Once again, it is worth noting that nearly all of the U.S. dollar's strength between January and March was driven by geopolitical factors. As soon as the United States and Iran reached a ceasefire agreement, sellers quickly retreated, while buyers dominated trading activity for more than a month.

At present, the probability of a formal agreement remains relatively high. Nevertheless, the market remains skeptical of any reports suggesting that the conflict is nearing a final resolution. As a result, the euro is moving higher, but the pace of gains remains measured and cautious.

The economic backdrop on Monday clearly did not support buyers, as the only notable report—the industrial production data from the European Union—came in below market expectations. Industrial output increased by only 0.1% in April compared with March. Therefore, today's rise in the euro can be attributed primarily to growing market optimism regarding the prospect of peace in the Middle East.

There remain numerous reasons for buyers to stay active throughout 2026, and the conflict in the Middle East has not materially changed that outlook. From both a structural and long-term perspective, the policies that contributed to the dollar's significant decline last year remain unchanged. In the coming months, the U.S. dollar may occasionally strengthen as investors seek safe-haven assets, but this factor would require a sustained escalation of tensions in the Middle East.

I still do not believe in the emergence of a long-term bearish trend in EUR/USD. The dollar has received temporary support from geopolitical developments, but it remains unclear what could provide sellers with a durable advantage over the longer term.

News Calendar for the United States and the Eurozone:

• Germany – ZEW Economic Sentiment Index (09:00 UTC).
• United States – Building Permits (12:30 UTC).
• United States – Housing Starts (12:30 UTC).

The economic calendar for June 16 contains three scheduled releases, none of which are considered particularly significant. Therefore, the impact of economic data on market sentiment on Tuesday is expected to be minimal or nonexistent.

EUR/USD Forecast and Trading Recommendations:

In my view, the pair remains in the process of forming a bullish trend. The fundamental backdrop changed sharply three months ago, but the broader trend cannot yet be considered invalidated or complete.

Therefore, buyers may be able to resume their advance in the near future if geopolitical developments continue to provide support.

At present, traders should focus on the emergence of new trading patterns, preferably bullish ones. I expect such a pattern to form this week. It is also critically important that the agreement between Iran and the United States does not collapse. Otherwise, sellers could regain control of the market, and the developing bullish structure could be prematurely invalidated—just as the bearish setup was last week.