The EUR/USD currency pair is resting over the weekend and preparing for an important Monday. On Sunday, Tehran and Washington may sign a memorandum of understanding that will open the Strait of Hormuz, extend the ceasefire for at least another 60 days, and initiate talks on the nuclear issue. Yes, you heard that right; nuclear negotiations will begin later, as they will likely be brought to a separate agenda.
Of course, if the Strait of Hormuz is opened on Sunday or Monday and the deal between Iran and the US goes through, it will be a huge step toward long-term peace. We have little doubt that, on Monday, we will see a decline in the US dollar due to the rise in those very risk-off sentiments. Let us remind you that all periods of growth for the dollar in 2026 are solely due to geopolitics and Donald Trump himself. If the war in the Middle East had not started, the euro would likely be trading above $1.20. Therefore, if the only support factor for the US dollar is mitigated, it will definitely lead to its decline.
Trump also stated on Saturday that "when everything calms down, we will go in and take the nuclear dust buried under the mountains." Likely, the American president meant that all enriched uranium and missiles had long been destroyed; only the remains needed to be unearthed and eliminated. Naturally, this does not correspond to reality; otherwise, the war against Iran could have been avoided. Iran still has enough enriched uranium and ballistic missiles, which will be discussed in separate negotiations.
Interestingly, this time, official Tehran did not deny Trump's statements. Iranian Foreign Minister Abbas Araghchi confirmed that the deal may be signed on Sunday via remote means, after which it will be officially announced. Therefore, this information can be believed, as both sides have confirmed it. We can only hope that the negotiations do not fall through at the very last moment.
Reports indicate that the draft deal includes opening the Strait of Hormuz, lifting the naval blockade of Iranian ports, unfreezing Iranian assets, and lifting sanctions on Iranian oil. However, we are more interested in further negotiations on the nuclear issue. Recall that the issue of Iran's nuclear energy is pivotal. It was precisely this issue that led to the war, and Iran has repeatedly stated that it will not give up its uranium reserves and the ability to enrich them in the future. Therefore, the parties may reach an agreement on the Strait of Hormuz or sanctions, but how they will agree on nuclear fuel and ballistic missiles remains unclear. We believe this issue is the weakest link in the entire chain, which could break at any moment and bury hopes for long-term peace in the Middle East.
The average volatility of the EUR/USD currency pair over the last 5 trading days as of June 14 is 53 pips, which is considered "average." We expect the pair to move between levels 1.1515 and 1.1621 on Monday. The upper channel of linear regression has turned upwards, indicating a shift to an upward trend. The CCI indicator has entered the overbought area and has formed two "bearish" divergences, warning of the onset of a downward correction that is still not complete. It last entered the oversold area, indicating a possible completion of the correction.
Nearest support levels:
S1 – 1.1536
S2 – 1.1475
S3 – 1.1414
Nearest resistance levels:
R1 – 1.1597
R2 – 1.1658
R3 – 1.1719
Trading Recommendations:
The EUR/USD pair continues its downward movement, presumably a correction within the global upward trend. The overall fundamental backdrop for the dollar remains extremely negative, and only geopolitical factors regularly support it. When the price is below the moving average, short positions can be considered with targets of 1.1515 and 1.1475. Above the moving average line, long positions are relevant with targets of 1.1719 and 1.1780. The market continues to move away from geopolitical factors, but in recent weeks the dollar has been in demand as hopes for peace in the Middle East have weakened.
Explanations for Illustrations:
Linear regression channels help determine the current trend. If both are directed in the same way, the trend is strong right now;
The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which trading should currently be conducted;
Murray levels – target levels for movements and corrections;
Volatility levels (red lines) – a probable price channel in which the pair will spend the next day, based on current volatility indicators;
The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means a trend reversal in the opposite direction is approaching.
