The White House and the Middle East are deciding the fate of EURUSD

Following the US President’s statements, the euro strengthened its position, with the rate currently standing at 1.1620. Find out more in our analysis for 21 May 2026.

EURUSD forecast: key takeaways

• Donald Trump stated that negotiations with Iran are in the final stage
• Most Fed officials said that a rate hike may become necessary
• EURUSD forecast for 21 May 2026: 1.1675

Fundamental analysis

The EURUSD forecast takes into account that the pair remains dependent on statements from the White House. Following the US President’s remarks, the euro received support and strengthened against the USD.

On Wednesday evening, Donald Trump stated that negotiations with Iran are in the final stage and that Tehran is behaving very well. This triggered a sharp strengthening in the euro: the pair rebounded from the low of 1.1583 to the current level of 1.1622. But this statement also has another side: the US President immediately warned of new attacks if the deal is not concluded. Iranian President Masoud Pezeshkian stated that Tehran is not on the verge of capitulation and threatened to expand the conflict beyond the Middle East in the event of strikes by the US.

On Wednesday, the minutes of the April Fed meeting were published, where most officials stated that a rate hike may become necessary if inflation remains above target levels.

The market also expects the ECB to raise the interest rate at its June meeting.

The rate gap between the Federal Reserve and the ECB remains, but it could narrow. If the ECB raises the rate in June and the Fed pauses, the euro will receive fundamental support.

The fundamental analysis for 21 May 2026 takes into account that the EURUSD rate remains dependent on the fragile balance between hope for peace and a prolonged conflict in the Middle East. Peace will support the euro, while escalation will support the USD, pushing the pair lower.

Technical outlook

On the H4 chart, the EURUSD pair formed an Inverted Hammer reversal pattern near the lower Bollinger Band. At this stage, quotes may continue their upward trajectory as the signal plays out. Since they remain within an ascending channel, the 1.1675 resistance level may act as the upside target. A breakout above this level would open the potential for continued upward momentum.

At the same time, today’s EURUSD forecast also suggests another scenario. Quotes may form a downward wave and test the 1.1575 support level. After a rebound, they could continue their upward trajectory.

EURUSD overview

• Asset: EURUSD
• Timeframe: H1 (Intraday)
• Trend: downward with risks of a bullish correction
• Key resistance levels: 1.1675 and 1.1725
• Key support levels: 1.1575 and 1.1475

EURUSD trading scenarios for today

Main scenario (Buy Stop)

A breakout above the resistance level and consolidation above 1.1675 would indicate a bullish wave in the pair.

• Take Profit: 1.1735
• Stop Loss: 1.1645

Alternative scenario (Sell Stop)

A breakout and consolidation below the 1.1575 support level would signal stronger selling pressure and a bearish scenario.

• Take Profit: 1.1475
• Stop Loss: 1.1605

Risk factors

The main risks to the EURUSD upside scenario are continued selling pressure if buyers fail to gain a foothold above the key 1.1675 resistance level. An additional risk factor is easing tensions in the Middle East conflict and a possible breakout below the 1.1575 support level, which could lead to a resumption of the downward wave.

Summary

The euro has every chance of strengthening after statements from the White House. EURUSD technical analysis suggests growth towards 1.1675 after the correction.

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