EUR/USD: A diplomatic impass, Trump is furious

The EUR/USD, an imperfect but sensitive mirror of risk appetite in financial markets, remained weighed down by the lack of visibility regarding the outcome of the war in Iran and, more broadly, the lack of any de-escalation in the Middle East.

Oil prices rebounded today, after Donald Trump bluntly rejected Iran's response to US proposals to end the war. After more than a month of truce between the two belligerents, hopes for a settlement remain uncertain, as neither side has publicly unveiled its proposals.

On Sunday, Donald Trump abruptly rejected Iran's response to US proposals to end the war, once again raising the specter of Tehran, which is accused of targeting its Gulf neighbors. "I just read the response from the so-called 'representatives' of Iran. I don't like it - IT IS TOTALLY UNACCEPTABLE!" the US president wrote in capital letters in a brief message on his Truth Social network.

"So we are still far from a definitive resolution of the conflict," concludes Greg Kounowski, investment advisor at Norman K, for whom "as long as the blockade of the Strait of Hormuz continues, concern is growing at the White House about energy prices and their impact on inflation, growth, and monetary policy prospects, not to mention the tension created in the bond markets. If the war does not end soon, all of these indicators will be affected. This is why US diplomatic efforts are primarily focused on reopening the strait."

Brent crude, one of the two major global benchmarks on the oil market, climbed back above the symbolic $100 mark, reaching $105.29 at the time of writing. Its American counterpart, West Texas Intermediate (WTI), was trading above $97.

Iran threatened France, which is sending the aircraft carrier Charles de Gaulle to the Strait of Hormuz to facilitate its reopening when the time comes. "We have never considered deploying to reopen Hormuz. That has never been France's option. I call on everyone to remain calm and act responsibly. There are far too many verbal escalations that always lead to physical escalations," the very unpopular French president clarified.

On the statistical front, currency traders took note of the US employment report for April on Friday. Ultimately, the US created 114,000 jobs in the fourth month of 2026, more than double the figure expected by economists surveyed by the Wall Street Journal (54,000), while the unemployment rate remained stable at 4.2%.

However, Bastien Drut of CPR AM considers this report to be "very mixed." "This employment report is confusing: the business survey tends to show stabilisation (more job creation outside of healthcare), but the household survey is poor (fourth consecutive month of decline in the number of people reporting employment and a rise in the underemployment rate)," the economist explains.

Right now, the EUR/USD is trading at $1.1780.

KEY TECHNICAL ELEMENTS
From a technical perspective, the EUR/USD is now encountering a pivotal zone. After recovering much of its decline related to the acute phase of the conflict, it is trading near the upper boundary of its trading range. This configuration reflects a compression of volatility and marked hesitation among traders, who are currently unable to trigger a sustained upward move. In the absence of a clear catalyst - whether macroeconomic, monetary, or geopolitical - the pair remains contained below this major resistance ($1.1825), in a wait-and-see phase that could lead to a more directional move once this equilibrium is broken.

MEDIUM-TERM FORECAST
Based on the key technical factors mentioned above, our medium-term outlook for the EUR/USD is bearish.

Our entry point is $1.1779. The price target for our bearish scenario is $1.1461. To protect your invested capital, we advise you to place a stop-loss order at $1.1851.

The expected profit for this strategy is 318 pips, and the potential loss is 72 pips.