The EUR/USD currency pair has shown notable movement this week. For four days, there was a total flat, which is best seen on the hourly timeframe, and on Friday, the pair fell by over 100 pips, thus concluding a three-week flat. The sharp rise of the American currency was triggered exclusively by the Non-Farm Payrolls report. Notably, all other positive data from across the ocean was blatantly ignored by the market. On the 4-hour timeframe, it is clearly visible that the flat between 1.1597 and 1.1658 lasted for three weeks. Only Friday's Non-Farm Payrolls managed to push the EUR/USD pair out of the sideways channel.

Thus, one can immediately conclude that the Non-Farm Payrolls report and the market's reaction to it are more of an exception than the rule. Next week, the market may again ignore macroeconomics and fundamentals, waiting for a geopolitical resolution in the Middle East, reacting to the CCI indicator's oversold condition, and recalling the very likely tightening of the European Central Bank's monetary policy. Therefore, we are not at all sure that the downward trend will continue, and we will see another fall next week.

The market continues to selectively price in geopolitical factors and, to a lesser extent, macroeconomic and fundamental factors. As we mentioned, almost all important reports from the US last week were ignored, except for the Non-Farm Payrolls. The market paid no attention to ECB monetary policy and has simply grown weary of geopolitics. This week, the US and Iran made no progress in negotiations, despite Trump's claims that an agreement was again supposed to be "signed literally within days." Independent media continue to note that the parties more frequently launch new strikes or issue new demands and ultimatums in negotiations than they do concessions and steps towards signing a deal.

Therefore, we maintain the opinion that there will be no agreement in the near future. Is this factor enough for the dollar to continue to rise? In our view, no. If negotiations drag on for another two years, will the dollar rise during this time? Unlikely. The dollar receives support from time to time, but it should be understood that the global fundamental backdrop continues to weigh on it. Trump's policies are the main reason for the fall of the US currency in 2025, and in 2026, it worsened further. Simply because the dollar remains, in the minds of many investors, a "safe-haven currency," it has appreciated in recent months.

We should not forget about the technical picture as well. On the weekly timeframe, the entire "mind-boggling" rise of the dollar is best seen. Since July of last year, the pair has essentially been in a flat. The upward trend that began in 2022 remains and is supported by the trendline. Thus, a decline in the pair to the level of $1.08 will not break this trend.

The average volatility of the EUR/USD currency pair over the last 5 trading days as of June 7 is 64 pips, which is considered "average." We expect the pair to move between levels of 1.1459 and 1.1587 on Monday. The upper linear regression channel has turned upward, indicating a potential change in trend toward an uptrend. The CCI indicator entered the overbought area and formed two "bearish" divergences, which warned of the beginning of a downward correction that is still not complete. On Friday, it entered the oversold area, signaling a possible end to the correction.

Nearest Support Levels:

S1 – 1.1475

S2 – 1.1414

S3 – 1.1353

Nearest Resistance Levels:

R1 – 1.1536

R2 – 1.1597

R3 – 1.1658

Trading Recommendations:

The EUR/USD pair continues its downward movement, which is presumably a correction within the global upward trend. The global fundamental background for the dollar remains extremely negative, and only the geopolitical factor regularly supports it. When the price is below the moving average, short positions can be considered with targets of 1.1475 and 1.1459. Above the moving average line, long positions are relevant with targets of 1.1719 and 1.1780. The market continues to detach from the geopolitical factor, but in recent weeks, the dollar has been in demand as hopes for peace in the Middle East have diminished.

Explanations for Illustrations:

• Linear regression channels help determine the current trend. If both are directed in one direction, it means the trend is currently strong;
• The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which trading should currently be conducted;
• Murray levels are target levels for movements and corrections;
• Volatility levels (red lines) indicate the likely price channel in which the pair will spend the next 24 hours based on current volatility indicators;
• The CCI indicator — its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.