EUR/USD bounces from 1.1850 ahead of Trump’s speech on Iran

• USD bulls are taking some profits ahead of Trump’s announcement on the Iran nuclear deal at 18:00 GMT.
• The US dollar got a boost earlier in the day by strong hawkish comments from Fed’s chairman Jerome Powell but bears are trying to erase the gains.

The EUR/USD is trading at around 1.1884 down 0.32% on Tuesday as Trump is set to announce its decision on the Iran deal at 18:00 GMT. 

The EUR/USD is bouncing from the 1.1850 level as USD bulls are taking some profits off the table as the European session has come to an end. 

Market participants are shifting their attention to the Trump’s speech on Iran. From recent US officials comments, it is expected that the United States will pull out of the current Iran nuclear deal. It is forecast that Trump will impose new sanctions on Iran but they may take months to go into effect and a “grace period” would give room to further negotiations, according to CNN. 

The news can affect USD in the short-term but is unlikely to provide any major change in trend as the market is focused on the US rate normalization while the Fed is expected to hike at least three times this year.

Earlier in the day, the greenback saw a strong buy wave triggered by strong hawkish comments from Jerome Powell, the Federal Reserve’s chairman. He said “some investors and institutions may not be well positioned for anticipated US interest rate hikes” and EUR/USD tumbled to fresh lows below the 1.1850 level.

EUR/USD 4-hour chart 

The main trend is bearish. “A break below 1.1838 (2018 low May 8) would open the door to 1.1768 (78.6% Fibo of November-February up move) and finally 1.1718 (monthly low Dec.12 2017). On the other hand, the next upside barrier aligns at 1.2019 (200-day sma) seconded 1.2021 (10-day sma) and finally 1.2153 (low Mar.1).” wrote FXStreet’s own Pablo Piovano.