The EUR/USD pair still appears ready to reverse in favor of the euro and resume its upward movement in line with the bullish trend. Over the past week, the euro traded within imbalance 13, while bears failed to invalidate this bullish pattern. Therefore, despite the euro's renewed decline over the past two weeks, the bullish trend remains intact.

Within a bullish trend, I prefer to look for and trade buy signals rather than sell signals. Thus, the required bullish signal may still form within imbalance 13. Naturally, the euro's near-term outlook depends heavily on geopolitics. Last week, multiple reports emerged regarding progress toward an agreement between Iran and the United States, and several more similar headlines appeared over the weekend. Most of them came from Donald Trump, which is why I would also like to hear comments from official representatives in Tehran. However, Tehran remains silent, meaning traders can only rely on statements from the US president and his closest officials.

Whether that is sufficient remains an open question, but the new week has nevertheless started with gains in the "risk-sensitive euro," which means the market still considers the signing of a framework agreement possible in the near future. Such a framework agreement would at least allow the reopening of the Strait of Hormuz and provide time for more comprehensive negotiations, which logically should eventually lead to the signing of a nuclear deal.

In the current situation, traders can only wait for another reaction from imbalance 13, which remains the last bullish pattern within the current bullish impulse, or for its invalidation. If the current decline is viewed as a corrective pullback, then it may very well conclude within imbalance 13. However, without geopolitical support, bulls will struggle to launch a new offensive.

If the current movement is instead interpreted as the beginning of a new bearish trend, then traders should expect the failure of negotiations and a renewed escalation of the conflict, while also waiting for a signal within imbalance 15. In my opinion, however, the first scenario remains more likely.

Once again, I must emphasize that the entire rise in the US dollar between January and March was driven exclusively by geopolitics. As soon as the United States and Iran agreed to a ceasefire, bears immediately retreated, and for more than a month bulls remained dominant. At present, the chances of reaching an agreement have increased sharply, though they are still far from guaranteed.

The market remains highly skeptical of any information suggesting an imminent end to the conflict or a finalized agreement between Iran and the United States. More precisely, a deal will probably be signed eventually. However, "eventually" is not sufficient to justify aggressive buying of EUR/USD right now. For example, if the agreement is signed only a year from now, traders are unlikely to remain optimistic today or aggressively sell the US dollar on that basis.

Overall, the technical structure remains relatively clear. The bullish trend is still intact, but it desperately requires support. Ideally, this support should come from geopolitics — namely, if Iran and the United States sign at least a framework agreement and then continue negotiations regarding Iran's nuclear program. Without a positive news backdrop, bulls will struggle to launch another sustained rally.

There was no macroeconomic background on Monday. However, over the weekend Donald Trump once again stated that a deal with Iran was close, which provided fresh support for bulls. Whether the bullish impulse will continue this week remains difficult to determine, but traders began the week with an optimistic outlook.

Bulls still have numerous reasons to remain active in 2026, and even the outbreak of war in the Middle East has not reduced their number. Structurally and globally, Trump's policies — which led to a sharp decline in the dollar last year — have not changed. In the coming months, the U.S. currency may occasionally strengthen amid flight-to-safety flows, but this factor requires constant escalation of the Middle East conflict.

I still do not believe in a long-term bearish trend for EUR/USD. The dollar has received temporary support from the market, but what exactly will allow bears to sustain pressure over the long term?

Economic Calendar for the U.S. and the Eurozone:

The economic calendar for May 26 contains no significant releases. Therefore, macroeconomic data will not influence market sentiment on Tuesday.

EUR/USD Forecast and Trading Advice:

In my opinion, the pair remains in the process of forming a bullish trend. The news background changed sharply three months ago, but the trend itself cannot yet be considered canceled or completed. Therefore, bulls may well resume their offensive in the near term if geopolitics provides at least minimal support.

Traders previously had opportunities to open long positions based on the signal from imbalance 12, as well as the signal from the order block. The upward movement may resume toward this year's highs from imbalance 13. However, it is important this week for bulls to maintain control of the market.

For the euro to continue rising without obstacles, the Middle East conflict must continue moving toward a sustainable peace settlement. Failed negotiations, rejection of the framework agreement by either side, or another violation of the ceasefire would quickly allow bears to regain control. At the moment, bullish traders still lack sufficient support for a full-scale offensive. The buying zone remains at 1.1605–1.1649.