Over the past several days, the EUR/USD pair has been trying to reverse in favor of the euro and resume its upward movement in line with the bullish trend. During the past week, the euro remained within imbalance 13. The bears failed to invalidate this bullish pattern, which means that despite the euro's decline over the past two weeks, the bullish trend remains intact.

In a bullish trend, I prefer to look for and trade buy signals rather than sell signals. Therefore, within imbalance 13, I am still waiting for the formation of a new buy signal. However, the euro's near-term future will depend not on technical analysis or signals, but on geopolitics.

Last week, there were repeated reports about a possible agreement between Iran and the United States. A new week has begun, and the stream of optimistic statements and reports from the U.S. has not stopped. However, today the United States launched new strikes in southern Iran near the port of Bandar Abbas.

According to media reports, the missile strikes targeted missile launchers as well as boats that, according to U.S. military officials, were attempting to lay mines. I will leave it to readers to decide who is right and who is wrong in this situation, as attempting to determine that during the second month of the ceasefire and the third month of the conflict makes little sense. At this point, only one thing matters: either the parties reach a deal or they do not. Market sentiment toward the euro and the dollar depends on it.

In the current situation, traders can only wait either for another reaction from imbalance 13 — the last bullish pattern within the current bullish impulse — or for its invalidation. If the pair's decline is viewed as a corrective pullback, then it may very well end within imbalance 13. However, without geopolitical support, it will be difficult for bullish traders to launch a new offensive.

If the current movement is interpreted as the beginning of a new bearish trend, then one should expect negotiations to fail, the conflict to resume, and a signal to appear within imbalance 15. In my opinion, the first scenario still appears more likely.

I cannot once again fail to point out that the entire rise of the U.S. dollar from January through March was driven solely by geopolitics. As soon as the United States and Iran agreed to a ceasefire, the bears immediately retreated, and for more than a month the bulls dominated the market.

At the moment, the chances of reaching an agreement have increased significantly, but they are still far from guaranteed. The market remains highly skeptical of any information suggesting a quick resolution to the conflict or a deal between Iran and the United States. More precisely, a deal will probably eventually be signed. But "eventually" is not exactly what is needed for a strong rally in the pair.

For example, if the deal is signed a year from now, traders are unlikely to become highly optimistic about it today and rush to sell the U.S. dollar.

The overall technical picture remains fairly clear. The bullish trend is still intact, but it desperately needs support. Ideally, that support should come from geopolitics — Iran and the United States signing at least a framework agreement and then continuing discussions regarding Iran's nuclear program. Without positive news flow, it will be difficult for the bulls to launch another offensive.

There was no economic background on Tuesday. Over the weekend, Donald Trump once again stated that a deal with Iran was close, which gave the bulls additional confidence. However, Tuesday's events demonstrated that another round of negotiations could collapse at any moment, just like all previous ones. Therefore, bulls are clearly not rushing to buy EUR/USD.

The 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 caused the dollar to weaken significantly last year — have not changed.

Over the coming months, the U.S. currency may occasionally strengthen amid investor flight from risk, but this factor requires constant escalation of the Middle East conflict. I still do not believe in a sustained bearish trend for EUR/USD. The dollar has received temporary market support, but what exactly will allow the bears to maintain pressure over the long term?

Economic Calendar for the U.S. and the Eurozone

The economic calendar for May 27 once again contains no notable events. Therefore, the influence of economic data on market sentiment on Wednesday will again be absent.

EUR/USD Forecast and Trading Advice

In my view, the pair remains in the process of forming a bullish trend. The information backdrop changed sharply three months ago, but the trend itself still cannot be considered canceled or completed. Therefore, in the near future, the bulls may well resume their advance if geopolitics provides even modest support.

Traders previously had opportunities to open long positions based on the signal from imbalance 12, as well as from the order block signal. The upward movement could resume all the way toward this year's highs from imbalance 13.

However, this week it is important for the bulls to maintain market control. For the euro to rise without obstacles, the Middle East conflict must continue moving toward a lasting peace. Failure in negotiations, rejection of the framework agreement by either side, or another violation of the ceasefire — and the bears will return to the offensive once again.

At present, bullish traders still do not have enough support for a full-scale advance. The buying zone remains 1.1605–1.1649.