05.05.202604:17 Analisis Forex & Kajian: EUR/USD Overview. Weekly Preview. The Second Act of Military Drama in the Middle East

The EUR/USD currency pair traded quietly at the beginning of the week until Iran attacked an American warship in the Persian Gulf near Hormuz Island. This news alone pushed oil prices back to $120 per barrel and provided powerful support to the US dollar. As mentioned, we anticipated the dollar strengthening due to geopolitical events, but now that will only happen in isolated cases. A full bullish trend for the dollar is only possible if the war in the Middle East reignites. And it seems that this is indeed the direction in which things are heading.

In our articles, we prefer not to just list all the news from the previous day. We strive to provide expert analysis of global events. From our perspective, the likelihood of reaching a peace agreement between Iran and the US, which was already near zero, remains unchanged. Anyone following events in the Middle East knows that Iran has been under global sanctions for about 50 years due to its refusal to disarm its nuclear capabilities. Western countries see Iran as a threat to their security, hence they require Tehran to relinquish all nuclear stockpiles and guarantee that uranium will not be enriched in the future. Iran has consistently refused such proposals for about half a century. Therefore, Trump's recent military threats are unlikely to change Iran's nuclear policy.

The US President likely feels the sting of defeat and has decided to impose an oil blockade on Iran, reasoning that without revenue from energy exports, Iran will quickly concede and sign the required documents. However, Tehran is more likely to resume military actions in the Persian Gulf and attempt to lift the American blockade by force. Of course, it is still too early to say that conflict will resume, but it is clear that several US warships cannot maintain the blockade of the Strait of Hormuz for months or years. Iran has missiles and drones, and oil revenues are a major source of its budget. Therefore, it seems all but certain that military actions will recommence.

What to expect next? Firstly, the reaction from Washington to the attack on the American ship. Donald Trump has previously declared complete victory over the adversary and stated that all operational goals have been achieved. However, it appears that not everything is resolved, as the White House continues to expect Iran to relinquish its nuclear stockpiles. Secondly, we can expect a renewed increase in oil prices, as a new escalation of the conflict may lead to even more devastating consequences for the region's infrastructure, particularly oil and gas infrastructure. Essentially, it would make little sense for the US allies to focus on repairing damaged and destroyed facilities at this time if a new war were to quickly lead to their destruction once again. However, we do not believe that a new dollar trend will begin in the near future. Only if there is even more active military action than in March.

The average volatility of the EUR/USD currency pair over the last 5 trading days as of May 5 is 70 pips, which is considered "average." We anticipate movement within the range of 1.1629-1.1769 on Tuesday. The upper channel of the linear regression has turned downward, indicating a bearish trend. However, the upward trend of 2025 may still resume. The CCI indicator has entered the overbought zone and formed two "bearish" divergences, signaling a downward correction.

Nearest Support Levels:

• S1 – 1.1658
• S2 – 1.1597
• S3 – 1.1536

Nearest Resistance Levels:

• R1 – 1.1719
• R2 – 1.1780
• R3 – 1.1841

Trading Recommendations:

The EUR/USD pair maintains an upward trend amid waning geopolitical influence on market sentiment and easing geopolitical tensions. The global fundamental backdrop for the dollar remains extremely negative; therefore, we still expect long-term growth for the pair. If the price is below the moving average, shorts can be considered with targets at 1.1658 and 1.1629 based on technical grounds. Above the moving average line, long positions with targets at 1.1780 and 1.1841 are relevant. The market is continuing to distance itself from geopolitical factors, while the dollar is losing its only growth driver.

Explanations for the Illustrations:

• Linear regression channels help determine the current trend. If both are pointing in the same direction, it indicates a strong trend.
• The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which trading should be conducted.
• Murray levels – target levels for movements and corrections.
• Volatility levels (red lines) – indicate the probable price channel in which the pair will spend the upcoming day, based on current volatility metrics.
• CCI Indicator – its entry into the overbought (above +250) or oversold (below -250) areas signals that a trend reversal is approaching in the opposite direction.