European currencies are entering a consolidation phase following an attempted recovery, while market participants adopt a wait-and-see approach amid uncertainty surrounding the geopolitical landscape. Current price action reflects a balance between a softer US dollar and a lack of sustained drivers for further gains in the euro and the pound, keeping both pairs within defined ranges.

The key factor shaping the current market structure remains developments surrounding Iran. Despite signs of moderate recovery in global markets and some easing in the dollar, US rhetoric and the absence of clear signals regarding a potential agreement continue to maintain a high level of uncertainty. Rising oil prices and risks of supply disruptions through the Strait of Hormuz continue to fuel inflation expectations and, as a result, support a cautious approach to assessing the outlook for monetary policy.

Additional uncertainty stems from statements by Donald Trump, who earlier this week once again hardened his stance on Iran, suggesting the possibility of further strikes. At the same time, diplomatic efforts to reach an agreement are ongoing, although the likelihood of a near-term resolution is seen as limited. This combination of pressure and negotiations creates a mixed news backdrop, restraining the formation of a clear directional move in the currency market while leaving room for sharp impulses in the event of escalation.

EUR/USD

EUR/USD is trading within a narrow 1.1500–1.1600 range. Technical analysis suggests a potential test of the upper boundary, as several reversal patterns have formed on the daily timeframe. A sustained move above 1.1600 could lead to gains towards 1.1640. Conversely, a break below the 1.1500 support level could open the way for a decline towards the 1.1440–1.1410 area.

Key events for EUR/USD:

• today at 10:15 (GMT+3): Spain Services PMI
• today at 10:55 (GMT+3): Germany Services PMI
• today at 15:30 (GMT+3): US core durable goods orders

GBP/USD

GBP/USD is showing a similar pattern, remaining within a sideways range after a corrective rebound. A firm break above 1.3300 could pave the way for further gains towards 1.3370–1.3400. On the downside, a rejection from current levels may result in a retest of recent lows near 1.3150.

Key events for GBP/USD:

• today at 11:30 (GMT+3): UK Composite PMI
• today at 11:30 (GMT+3): UK Services PMI
• today at 17:00 (GMT+3): Atlanta Fed GDPNow

Overall, the market retains a consolidative tone, awaiting both geopolitical developments and macroeconomic signals. A breakout from the current range could be triggered by news related to negotiations involving Iran or by key economic data releases, highlighting the transitional nature of the current market phase.

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