On Tuesday, the EUR/USD pair returned to the 61.8% Fibonacci retracement level at 1.1578, rebounded from it, reversed in favor of the euro, and resumed its upward movement toward the 50.0% retracement level at 1.1630. A rebound from this level would favor the US dollar and signal a renewed decline toward 1.1578. Consolidation above the 1.1630 level would increase the likelihood of further gains toward the next Fibonacci level at 38.2% – 1.1682.

The wave structure on the hourly chart remains relatively straightforward. The latest completed downward wave failed to break below the previous low, while the new upward wave exceeded the previous peak. Therefore, the trend has shifted to bullish. The geopolitical situation has improved significantly after Donald Trump announced an agreement with Iran, while both Iran and Pakistan confirmed this information. As a result, the conflict may be resolved by Friday, giving bulls an opportunity to extend their advance.

There were few important economic events on Tuesday. The only notable releases were the June ZEW Economic Sentiment Indices for Germany and the Eurozone, which improved significantly compared with May. As soon as reports emerged regarding the end of the conflict between Iran and the United States, businesses and consumers immediately became more optimistic about economic prospects and business conditions. However, it would be difficult to argue that the ZEW indices triggered the latest bullish move. In my view, Tuesday's price action was not driven by either the ZEW data or the US housing starts report.

Later today, the FOMC will announce its monetary policy decisions following its fourth meeting of 2026, while Kevin Warsh will hold his first press conference as Chair of the Federal Reserve. Therefore, the market has adopted a wait-and-see approach ahead of potentially important information. It should be recalled that the Federal Reserve may take a hawkish stance by emphasizing that current inflation levels remain unacceptably high. Despite the general reluctance among FOMC members to raise interest rates, another rate hike may become necessary before the end of the year to contain rising consumer prices.

The Federal Reserve may also adopt a neutral stance in anticipation of an end to the conflict in the Middle East and the reopening of the Strait of Hormuz. Therefore, this evening's announcements could provide information capable of significantly influencing market sentiment.

On the 4-hour chart, the pair reversed in favor of the euro and began advancing within a descending trend channel toward its upper boundary. A rebound from the 38.2% Fibonacci retracement level at 1.1667 would keep the pair within the descending channel and prevent bulls from launching a sustainable advance. Consolidation above the channel would allow traders to expect the formation of a full-fledged bullish trend, with initial targets at 1.1746 and 1.1824. No emerging divergences are currently observed on any indicator.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders closed 15,878 Long positions and opened 19,056 Short positions. Over the seven-week period in February and March, the bulls' overwhelming advantage disappeared due to the conflict in Iran. During the past eleven weeks, the situation has gradually normalized amid the suspension of hostilities in the Middle East, allowing bulls to regain the upper hand.

The total number of Long positions held by speculators currently stands at 219,000, compared with 205,000 Short positions.

Overall, from a longer-term perspective, large market participants continue to view the euro favorably. Naturally, global developments of various kinds—which have been abundant in recent years—continue to influence investor sentiment. At present, the market's primary focus remains on the Middle East, where the conflict has merely been paused rather than fully resolved. Therefore, in the near term, the euro and the US dollar are likely to be driven less by Federal Reserve or ECB monetary policy decisions and economic data, and more by developments in Iran.

News Calendar for the United States and the Eurozone:

• Eurozone – Consumer Price Index (09:00 UTC)
• Eurozone – Speech by ECB President Christine Lagarde (10:50 UTC)
• United States – Retail Sales (12:30 UTC)
• United States – FOMC Interest Rate Decision (18:00 UTC)
• United States – FOMC Dot Plot (18:00 UTC)
• United States – Federal Reserve Press Conference (18:30 UTC)

The economic calendar for June 17 contains six events, three of which can be considered significant. The impact of the economic news flow on market sentiment is expected to be concentrated during the final quarter of the trading day.

EUR/USD Forecast and Trading Tips:

Short positions may be considered today following a rebound from the 1.1630 level on the hourly chart, targeting 1.1578. Long positions could previously have been opened following a rebound from the 1.1578 level with a target at 1.1630. New long positions may be considered after a confirmed close above 1.1630, targeting 1.1682.

Fibonacci retracement grids are drawn from 1.1409 to 1.1850 on the hourly chart and from 1.2081 to 1.1411 on the 4-hour chart.