22.09.202611:14 Forex Analyse & Reviews: EUR/USD. Iran Developments and Xi Jinping's Visit to the United States

The euro-dollar pair is trading within a relatively narrow price range, moving sideways for the second consecutive day. Sellers are taking profits as the pair approaches the 1.1440 support level (the lower Bollinger Band on H4), while buyers are reluctant to approach the 1.1500 target, which corresponds to the upper Bollinger Band on the same time frame.

The economic calendar for the current week is virtually empty in terms of market-relevant publications and events. The main central bank decisions and key macroeconomic data releases are already behind us, while the remaining releases are unlikely to change the current picture. Therefore, EUR/USD traders will focus primarily on external fundamental factors. The key events will be the UN General Assembly and Xi Jinping's visit to the United States.

The General Assembly begins today, September 22, while the general debate will continue until next Monday. However, financial markets are interested not so much in the UN agenda itself as in Donald Trump's diplomatic contacts. In particular, the U.S. president stated the day before yesterday that he was ready to meet Iranian President Masoud Pezeshkian on the sidelines of the summit, although the official details of such a meeting have not yet been agreed. The possibility of such contact is significant for the markets, given the ongoing conflict and continued disruptions to oil supplies. Essentially, the market is being presented with a rare opportunity in recent months for a diplomatic shift that could quickly change the assessment of geopolitical risks.

Traders are assessing the potential outcome of the upcoming negotiations through a direct chain of cause and effect: diplomatic progress ? lower oil prices ? a reassessment of expectations regarding the Fed's future actions ? a weaker dollar. This is particularly important against the backdrop of the September Fed meeting, at which the central bank raised interest rates and maintained a distinctly hawkish stance, focusing on inflation risks. A sustained decline in oil prices would weaken the arguments in favor of further monetary policy tightening and, consequently, put pressure on the greenback. In this case, EUR/USD could quickly return to the 1.15 level, with the potential for further growth.

However, the "Iran case" could also develop in the opposite direction. A breakdown in negotiations, tough rhetoric, or a renewed escalation in the Middle East could push oil prices higher again, increase inflation risks, and boost demand for safe-haven assets. In this case, the greenback would receive double support—both from higher U.S. Treasury yields and from traditional demand for the dollar as a safe-haven asset amid increased risk aversion.

Another important geopolitical event of the week will be Xi Jinping's state visit to the United States, scheduled for September 23–25. The focus will be on Thursday, when the Chinese leader will meet with Trump at the White House. The agenda includes trade tariffs, rare-earth metal exports, purchases of U.S. agricultural products, technology and, particularly important for the commodity market and, indirectly, for currencies, issues related to Iran.

According to preliminary statements from both sides, the United States and China are interested at least in stabilizing relations and extending the trade truce, which expires on November 10. Given the complicated history of the issue, even limited agreements between Beijing and Washington would improve global sentiment and increase interest in risk assets, including the euro.

However, the opposite scenario is also possible here. If the United States and China fail to find common ground on trade, rare-earth metals, and technology, the market will once again focus on the risks of a new escalation. In such a situation, the dollar would again benefit on two fronts—through demand for safe-haven assets and through a potential increase in U.S. inflation expectations.

Thus, over the coming days, EUR/USD dynamics will be determined less by macroeconomic data and more by developments in two geopolitical stories—the "Iran case" and Trump's meeting with Xi Jinping. Any signs of diplomatic progress could weaken demand for the greenback and push the pair back above the 1.1500 target, while another escalation in geopolitical risks would preserve the sellers' advantage.

From a technical perspective, the pair is trading within a channel between the lower and upper Bollinger Bands on H4, namely in the 1.1450–1.1550 level. A decisive break below the lower boundary of the channel would open the way for sellers toward the 1.14 level and, in the longer term, toward 1.1350 (the lower Bollinger Band on W1). At the same time, consolidation above 1.1500 would allow for a move toward 1.1570 (the middle Bollinger Band, which coincides with the upper boundary of the Kumo cloud on D1).

While awaiting the week's key events, the pair will likely continue to trade within the designated range. The further direction of price movement will depend on which sentiment prevails in the market—risk-on or risk-off.