Ahead is perhaps the most information-packed week of the month. The central banks of major countries (the Federal Reserve, Bank of Japan, Reserve Bank of Australia, Swiss National Bank, Bank of England) will hold their June meetings, and key inflation growth data will be published in the UK and Japan. Additionally, in the coming days, the main intrigue of the month, and perhaps even the year, may be resolved: the US and Iran could sign an agreement that would end the Middle Eastern conflict and allow the restoration of full shipping through the Strait of Hormuz. The intrigue remains, which means the scales may tip either in favor of the dollar or against it.

The geopolitical agenda will not be the only driver of the market: traders of dollar pairs, including EUR/USD, are eagerly awaiting the June meeting of the Fed, which will be the debut for the new chairman, Kevin Warsh. Additional volatility for the pair may be prompted by key macroeconomic releases this week, including the German ZEW indexes, US retail sales data, the Empire Manufacturing Index, and the Philadelphia Federal Reserve's manufacturing activity index.

Still, in terms of a hierarchy of fundamental factors, the negotiations between the US and Iran undoubtedly take priority. The June meeting of the Fed, and certainly the macro data, only reflect the consequences of the Middle Eastern conflict, which may conclude in the near future. Therefore, the direction of EUR/USD movement in the upcoming week will primarily depend on the prospects for the "Iranian case."

I would like to remind you that on Saturday, the President of the USA stated on his social media that a peace agreement would be signed the following day, meaning on Sunday. According to him, immediately after that, the Strait of Hormuz "will be open to all," and the deal "will be a barrier to nuclear weapons for Tehran." He later added that technical issues regarding the elimination or export of highly enriched uranium from the country would be addressed in the next stage of negotiations. At the same time, the Prime Minister of Pakistan, who is mediating between the conflicting parties, confirmed Washington's expectations, stating that Islamabad is ready to hold an "online ceremony" for signing the agreement within 24 hours.

However, the Iranian Foreign Ministry spokesman denied these reports, stating that no deal would be signed on Sunday, although, according to him, the possibility of this happening in the coming days "cannot be ruled out." According to CNN, Tehran has not yet made a final decision on the framework agreement—the study of its political, legal, and technical aspects is still ongoing.

As of now, the prospects for the US-Iran deal remain contradictory. On the one hand, numerous media outlets continue to voice encouraging insights—for example, according to the Israeli channel i24, the Speaker of the Iranian Parliament, Mohammad Bagher Ghalibaf, and US Vice President J.D. Vance will indeed hold a virtual meeting on Sunday to sign a Memorandum of Understanding. On the other hand, explosions were heard again in the Middle East. Representatives of the IDF reported that the Israeli army struck "Hezbollah infrastructure in the southern suburbs of Beirut." Whether this incident will derail the US-Iran deal is an open question.

The intrigue remains, but it is precisely the "Iranian case" that could define the direction of EUR/USD movement in the medium term. If the US and Iran sign the "Islamabad Agreement" today or tomorrow, despite everything, and open the Strait of Hormuz, the dollar could come under significant pressure amid increased interest in risk assets. In that case, the EUR/USD pair would not only consolidate within the 16th figure but might also test the resistance level of 1.1700 (the upper boundary of the Kumo cloud, which coincides with the upper Bollinger Band on the D1 timeframe). However, if the deal fails once again, the pair will remain within the 15th figure, within which it traded throughout the previous week.

All other fundamental factors will play a secondary role. This includes the June meeting of the Fed, even though this will be the first meeting under Kevin Warsh's chairmanship.

The overwhelming majority of analysts believe that the central bank will keep all monetary policy parameters unchanged, so all attention will focus on the accompanying statement, the "dot plot," and comments from the new head of the Fed.

The main intrigue is whether the median point will rise for 2026, signaling the theoretical possibility of a rate hike by the end of the year in the event of a worsening inflation trend. The share of traders pricing in the odds of at least one hike by December on the futures market has already exceeded the 40% mark. However, the intrigue remains, as core inflation (unlike headline inflation) showed a rather subdued increase in May, allowing the central bank to be cautious about tightening its forecast stance.

The markets will also pay special attention to the press conference of the new Fed chair. I would like to remind you that Warsh previously criticized the excessive predictability of the central bank's policy and advocated for a change in the Fed's communication strategy. According to some experts, under him, the Fed's statements will be less detailed about future actions. Nevertheless, traders will seek answers to many of their "pressing" questions—especially how seriously the Fed takes the new wave of overall inflation, whether the central bank considers the current rise in prices a temporary phenomenon, and whether it allows for the theoretical possibility of a rate cut within this year.

Given what I believe to be somewhat overstated market expectations regarding the "hawkishness" of the Fed, the real outcomes of the June meeting may put pressure on the US currency.

Key macroeconomic reports will remain overshadowed by geopolitics and the Federal Reserve. According to preliminary forecasts, the ZEW indices will support the euro as they reflect positive dynamics. In particular, the business sentiment index in Germany is expected to "rise" in June to -5.5 points, up from -10.2 in May. The corresponding eurozone index is expected to increase to -7.6, up from -9.1 in May.

US retail sales (the relevant report will be published on June 17) are expected to remain at the previous month's level in May, at 0.5%. Excluding auto sales, the sales volume is also expected to increase by 0.5%, following a 0.7% rise in April.

The Empire Manufacturing Index, based on a survey of producers in the New York Fed district, is expected to decline in June to 13.2 points, interrupting a two-month increase. However, the corresponding manufacturing index from the Philadelphia Fed is expected to show positive dynamics, rising this month to 11.4, from the previous reading of -0.4.

However, macroeconomic reports will play a rather auxiliary role. The market will certainly focus on the geopolitical agenda and developments in the "Iranian case." It is geopolitics that will determine overall risk appetite and the direction of dollar-asset movements. If the Islamabad Agreement is concluded, the EUR/USD pair will consolidate within the 16th figure and is likely to approach the resistance level of 1.1700. Maintaining geopolitical uncertainty or a derailment of agreements will support demand for safe-haven assets (including the dollar), keeping the pair within the 15th figure and preserving the risks of a renewed downward movement.

Therefore, all attention is on the negotiation track.