International crude oil prices fell and US Treasury yields declined as markets anticipated a deal between the US and Iran in the coming weeks or months, causing the euro/dollar exchange rate to fluctuate. The rate briefly fell to 1.1593, its lowest level since April 7, before recovering slightly and trading around 1.1595, awaiting the release of key Purchasing Managers' Index (PMI) data from the two major economies of Europe and the US.



Trump releases positive expectations for US-Iran deal

Trump stated that the US and Iran were close to reaching an agreement, potentially ending or temporarily halting regional conflicts. This news had only a minor impact on the euro/dollar exchange rate. Stimulated by this positive news, Brent crude and West Texas Intermediate (WTI) crude oil prices both fell by more than 5%, and US Treasury yields on both short and long-term maturities declined in tandem.

Hours before Trump's statement, Iran warned that it would retaliate against regions outside the Middle East if the United States launched a military strike. The specific operational plans of the Iranian Islamic Revolutionary Guard Corps are currently unclear. However, US media reports indicate that despite the recent ongoing military bombing operations between the US and Iran, Iran still possesses considerable military strength.

However, the market remains skeptical of this positive news, as Trump's statements may be intended to stabilize the market. Iran has not yet confirmed the start of negotiations. Trump has repeatedly claimed that Iran is willing to reach a reconciliation agreement, but the two sides have significant differences, and related negotiations have made no substantial progress. Therefore, the actual progress of reaching an agreement is likely less optimistic than Trump's statements suggest.

In addition, the newly released minutes of the Federal Reserve meeting also caused slight fluctuations in the euro/dollar exchange rate. The minutes revealed the core views of the Fed's latest policy meeting, with some Fed officials believing that conditions for a rate cut this year are ripe given the backdrop of weak US economic growth. However, two officials disagreed, arguing that US inflation remains high and sticky.

Currently, the next key factor influencing the EUR/USD exchange rate is the upcoming release of preliminary PMI data from the Eurozone and the US, which will directly reflect the latest economic conditions of these two major economies. Market economists predict that the Eurozone's composite PMI will be 48.8, and the US's composite PMI will be 50.

EUR/USD Technical Analysis


(EUR/USD daily chart source: FX678)

From the daily chart, the EUR/USD exchange rate has been declining recently. A double top pattern formed at 1.1795, with the neckline support at 1.1657. The exchange rate has now broken below this neckline, confirming a short-term downtrend.

Meanwhile, the exchange rate has slightly fallen below the 50-day moving average, and the current price level is at a key reversal point in the Murray mathematical indicator, indicating a clear downward signal from a technical perspective.

Based on a comprehensive technical analysis, the EUR/USD pair is likely to continue its downward trend in the short term, potentially testing the key psychological level of 1.1500. However, if the exchange rate rebounds and breaks through the resistance level of 1.1657, the current bearish technical logic will become invalid, and the market will reverse.

bearish outlook

Short EUR/USD, set take-profit at 1.1500, stop-loss at 1.1700, and trade for 1-2 trading days.

Looking at multiple approaches

Go long on EUR/USD, set a take-profit target of 1.1700, a stop-loss target of 1.1500, and a trading period of 1-2 trading days.