EUR/USD climbed to 1.1817 on Thursday, marking its ninth consecutive session of gains without interruption. The major currency pair continues to hit six-week highs. Pressure on the US dollar has intensified amid growing expectations of a diplomatic breakthrough between the US and Iran, which has reduced demand for safe-haven assets.
President Donald Trump stated that the seven-week conflict is nearing its end. The White House has also expressed confidence that an agreement can be reached. Fresh face-to-face negotiations may resume in Pakistan.
Tehran is considering allowing the free passage of ships through the Omani portion of the Strait of Hormuz if an agreement is reached, which could reduce the risks of further escalation.
Additional pressure on the dollar has come from lower energy prices, which have eased inflation fears and reduced expectations of further monetary tightening.
The broader market expects the Federal Reserve to keep interest rates unchanged this month and likely through the remainder of the year.
Technical Analysis
On the H4 chart of EUR/USD, the market is forming a consolidation range around 1.1771. An upward wave continuing to 1.1877 is expected as a local target, followed by a possible downward wave to 1.1700. Technically, this scenario is confirmed by the MACD indicator, with its signal line above zero and pointing firmly upwards, reflecting continued bullish momentum and supporting the potential for the uptrend to persist.
On the H1 chart, the market is forming the structure of the next upward wave to the 1.1835 level. After reaching this level, a correction to 1.1795 is likely, followed by a possible rise to 1.1855, with a trend perspective towards 1.1877. Technically, this scenario is confirmed by the Stochastic oscillator, with its signal line below 80 and pointing firmly downwards towards 20.
Conclusion
EUR/USD has experienced an impressive nine-session rally, driven by rising hopes for a US-Iran diplomatic breakthrough, which has diminished safe-haven demand for the dollar. With President Trump suggesting the seven-week conflict is near its end and Tehran considering concessions on passage through the Strait of Hormuz, energy prices have fallen, easing inflation fears and reducing expectations of monetary tightening. The Fed is widely expected to hold rates steady. While technical indicators suggest continued upside momentum towards 1.1877, the pair may be due for a near-term correction. The trajectory ahead hinges on whether diplomatic efforts deliver a tangible agreement or disappoint markets.
