There is a lot of uncertainty in the currency markets due to uncertainty in the interest rate outlook after the U.S.-Iran war.
Despite this bullish hammer candle, the RSI also remains below the midline, which keeps the pair in negative direction.
Therefore it all depends on US dollar movements. If the U.S. Dollar Index breaks above 100.50, it will likely put pressure on EURUSD. But if the U.S. Dollar Index consolidates between the 96 and 100.50 levels, it will likely keep EURUSD consolidation alive.
However, the short-term price action in EURUSD is constructive, as seen in the 4-hour chart. EURUSD formed a rounding bottom pattern in March 2026. The breakout from the cup pattern has produced another rounding bottom pattern above the 1.158 level. This rounding bottom is produced after hitting the support of the trend line. This construction indicates bullish price action for EURUSD in the short term.
