The EUR/USD pair spent two weeks trading within Imbalance 13, attempting to form a buy signal inside this zone. However, bulls failed to find sufficient grounds for a new advance, and Friday's Nonfarm Payrolls report dealt a significant blow to bullish sentiment. The pair fell well below Imbalance 13, invalidating this pattern.
The only remaining signal is the one formed within Imbalance 15, but it is a bearish signal within a trend that is still considered bullish. Last Friday, a new bearish Imbalance 16 was formed, and prices may react to it as early as today.
However, it should be emphasized once again that bearish signals are forming within a bullish trend that cannot yet be considered complete. Moreover, under current conditions, any chart signal or pattern should be treated with caution, as geopolitical developments are capable of invalidating virtually any technical setup.
Earlier today, Donald Trump once again stated that the conflict with Iran could be resolved within the coming weeks and that the parties may reach a mutually beneficial agreement. In addition, Iran and Israel have halted mutual attacks, which is undoubtedly a step toward broader de-escalation. These two developments were the primary drivers behind EUR/USD's rise on Tuesday.
However, tomorrow Iran could resume attacks against Israel or the United States, or announce that no progress has been made in negotiations. In that case, the U.S. dollar could strengthen once again.
The objective reality is that the conflict in the Middle East is far from resolved, while Tehran and Washington remain unable to agree on terms that would satisfy all parties. On Monday, Iran carried out its first strikes against Israel in two months in response to an Israeli attack on Beirut, once again putting negotiations and a potential peace agreement at risk.
Such developments are no longer surprising, as the parties involved in the conflict continue to exchange strikes on a regular basis. At times, they appear more concerned with avoiding any appearance of weakness than with preserving the negotiation process. As a result, the U.S. dollar continues to benefit from geopolitical support.
In the near term, both price action and market sentiment will remain heavily dependent on geopolitical developments. If Tehran and Washington ultimately sign a memorandum of understanding, extend the ceasefire, and make progress on the nuclear issue, bears may be forced to retreat, allowing the euro and pound to resume their upward movement.
However, the situation remains highly fluid, forcing both bulls and bears to repeatedly adjust their positions.
Under current conditions, traders may consider bearish patterns. A new sell signal within bearish Imbalance 16 could emerge as early as today. Nevertheless, if an agreement between Iran and the United States is eventually reached, the euro could resume its advance despite the presence of bearish patterns.
Market sentiment continues to shift back and forth, forcing traders to adapt their strategies accordingly.
It is worth emphasizing once again that the U.S. dollar's rally between January and March was driven primarily by geopolitical factors. As soon as the United States and Iran reached a ceasefire agreement, bearish pressure on EUR/USD eased, and bulls dominated trading for more than a month.
At present, the likelihood of a broader agreement appears to be declining again, while the market remains highly skeptical of reports suggesting an imminent resolution to the conflict or a comprehensive agreement between Iran and the United States. Consequently, geopolitical developments continue to exert background pressure on EUR/USD.
The economic calendar was not responsible for Tuesday's rise in the euro. Earlier in the day, Germany released trade balance and industrial production reports, which delivered mixed results. The reasons behind the dollar's decline have already been discussed above.
Tomorrow, market participants will assess the inflation report, which could once again alter trader sentiment.
Bulls still have numerous arguments in their favor in 2026, and the conflict in the Middle East has not materially reduced them. From both a structural and long-term perspective, Trump's policies—which contributed to the significant decline of the U.S. dollar last year—remain largely unchanged.
In the coming months, the U.S. dollar may occasionally strengthen amid periods of risk aversion. However, this factor requires a continued escalation of tensions in the Middle East. I still do not believe in the emergence of a sustained bearish trend for EUR/USD. The dollar has received temporary support from the market, but it remains unclear what factors could provide bears with a durable long-term advantage.
The economic calendar for June 10 contains only one event, but it is an important one. The economic backdrop may influence market sentiment during the second half of Wednesday's trading session.
In my view, the pair remains in the process of forming a bullish trend. The information backdrop changed sharply three months ago, but the broader trend cannot yet be considered canceled or completed.
Therefore, bulls may well resume their advance in the near future if geopolitical developments provide even modest support.
At present, traders can maintain short positions initiated from Imbalance 15 while waiting for a new sell signal from Imbalance 16. The pair's decline has persisted for objective reasons. Without the strong U.S. labor market and unemployment data, the support zone represented by Imbalance 13 would most likely have held.
However, that support failed, giving bears an opportunity to extend their advance. The key question now is whether geopolitical developments will allow them to do so.
*La presente analisi del mercato ha un carattere esclusivamente informativo e non rappresenta una guida per l`effettuazione di una transazione.
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