Euro rises as US-Iran deal hopes sink USD, Oil

• Trump’s Iran post fuels optimism over Hormuz reopening terms.
• Oil slides toward $87, dragging the Greenback lower.
• Fed officials warn war-driven inflation could tighten policy.

The EUR/USD edges up by 0.12% as the Greenback drops amid hostilities in the Middle East, while a US-Iran deal is pending approval by the White House and senior Iranian officials. At the time of writing, the EUR/USD trades at 1.1664.

EUR/USD gains as Hormuz reopening hopes pressure Dollar and crude

Sentiment remains positive amid a post in social media by US President Donald Trump, who said that Iran must agree that it will never have a nuclear weapon or bomb, adding that the Strait of Hormuz must be open immediately and that water mines would be terminated by Iran. Regarding the enriched uranium, “it will be unearthed by the United States (which, it is agreed, is the only Country, along with China, with the mechanical capability of doing so!), in close coordination and conjunction with the Islamic Republic of Iran, plus the International Atomic Energy Agency, and DESTROYED.”

In the headline, Oil prices tumbled by 1.50% with WTI extending its losses towards $87.20, while the Greenback is down 0.17% according to the US Dollar Index (DXY). The DXY, which measures the buck’s value against six currencies, sits at 98.81, a tailwind for the shared currency.

The US economic schedule featured the Chicago PMI, which expanded by 62.7, exceeding estimates of 49.7 according to Reuters.

Aside from data releases, Fed Governor Michelle Bowman commented that the disinflation process has stalled, and that she would consider a shift in the policy outlook if war-driven inflation broadens.

Philadelphia Fed President Anna Paulson said inflationary pressures are weighing on the economy, making it tough for firms to plan for the future. Earlier, Kansas City Fed Jeffrey Schmid said the US central bank needs to weigh how to tighten monetary policy, warning against treating the Oil shock as transitory.

Across the pond, German inflation eased in May from 2.9% to 2.7% YoY. Core figures steadied, up from 2.3% in April to 2.5% YoY.

Next week, the US and Eurozone economic schedules will feature Flash PMIs across Europe, while in the US, the ISM Manufacturing PMI is expected to deteriorate modestly in the May reading.

EUR/USD Price Forecast: Technical outlook

In the daily chart, EUR/USD trades at 1.1679. The pair holds a constructive near‑term bias as it trades above the cluster of simple moving averages (50, 100 and 200) grouped around 1.1666 and remains supported by the rising trend line break area near 1.1582. The Relative Strength Index (14) at 51.5 is close to neutral but tilts slightly to the upside, suggesting modest bullish momentum while price consolidates above its underlying trend support.

On the topside, initial resistance is located at the descending trend line break level around 1.1809, where prior rallies have struggled. On the downside, immediate support is seen at the latest close region around 1.1679, followed by the simple moving average cluster near 1.1666, with the former trend line break at 1.1582 providing a deeper cushion ahead of the more distant structural floor near 1.1245.

(The technical analysis of this story was written with the help of an AI tool.)