The EURUSD pair has recently been moving within a relatively narrow range, alternating between gains and losses. It started the week with a downward move following negative news regarding the situation in the Middle East.
Geopolitics
Yesterday, the Tasnim News Agency reported that the exchange of messages between the US and Iran has been suspended. This move is reportedly a protest by Iran against continuous Israeli attacks on Lebanon. The probability of reaching a swift agreement between the parties is falling, which weighs on market sentiment.
After President Trump ordered Israel to halt its attacks on Beirut, while simultaneously stating that talks were progressing "at a lightning pace," market sentiment stabilized slightly, allowing the EURUSD pair to recover some of its losses. However, the news coming out of Tehran and Washington remains highly inconsistent, meaning that sentiment may stay volatile.
Macroeconomic Data
Behind us is the release of inflation data from the Eurozone. An upside surprise in the core gauge (an increase to 2.5%) seems to all but seal a June interest rate hike. The market-implied probability of such a move currently stands at 96%. However, the market reaction has been remarkably subdued.
Ahead of us today is another significant release – the April JOLTS report, which will serve as a prelude to Friday's NFP data. If the data, in line with expectations, shows a still relatively healthy state of the US labor market, bets on a Fed rate hike may increase slightly, providing support for the US dollar.
Technical Analysis
Figure 1: EURUSD (17.12.2025 - 02.06.2026)
Source: xStation, 02.06.2026
The EURUSD pair is currently in a clear consolidation phase, as illustrated by the flattening and intertwining of key exponential moving averages: the 50 EMA, 100 EMA, and 150 EMA. This phenomenon clearly confirms the loss of strong directional momentum and the market's transition into a sideways trend. In a broader technical context, the key event was the testing and successful defense of a significant support level – the 61.8% Fibonacci retracement.
The lack of decisiveness among investors is also reflected in the oscillator readings. The RSI indicator is stabilizing at 46.8 – within the neutral zone, just below the 50 mark. This reflects a balance of market forces with only a minimal advantage for the bearish side, which currently lacks sufficient strength to trigger a deeper sell-off.
—
Michał Jóźwiak, Financial Markets Analyst at XTB
Market Wrap: Europe is catching up🔼 Will Eurozone CPI data determine the ECB’s rate hike?
Economic Calendar: Key readings on the schedule (02.06.2026)
Morning Briefing: Inconsistent messages ahead of key data (02.06.2026)
Daily summary: Tech sector holds valuations despite risk
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
