The US blockade of Iranian tankers in the Strait of Hormuz was intended to further destabilize the oil market and drive up oil prices. The move is expected to boost US earnings from oil exports. Let’s discuss this topic and make a trading plan for the EUR/USD pair.
The article covers the following subjects:
Major Takeaways
- A ceasefire is better than bombing.
- Countries are signaling a willingness to resume negotiations.
- US stock indices have returned to pre-war levels.
- Long positions can be opened if the EUR/USD pair settles above 1.1765.
Weekly Fundamental Forecast for Dollar
According to Kpler, US crude oil exports reached a record high of 5 million bpd in April, up from 4 million bpd in 2025. The previous peak of 4.6 million bpd was recorded in February 2024. The US appears to be benefiting from the conflict, while the blockade of Iranian tankers—potentially further disrupting the global oil market—is also adding support. However, the US dollar is declining, and there is a clear logic behind this move.
US Oil Exports
Source: Wall Street Journal.
There are at least three reasons behind the April rally in the EUR/USD pair. A scenario in which the US blocks the Strait of Hormuz is considered more favorable for the global economy than a resumption of airstrikes on Middle Eastern energy infrastructure. The better the global GDP is, the better the euro performs.
News of renewed negotiations is emerging from multiple countries. Donald Trump has stated that key figures in Iran remain willing to reach an agreement. Meanwhile, Pakistan is making sustained efforts to resolve outstanding issues between Washington and Tehran, while China has signaled its readiness to support peace initiatives. Iran, for its part, reports progress across several areas, noting that both sides still see room for continued dialogue.
Finally, the return of US stock indices to levels seen before the armed conflict in the Middle East signals that the worst of the crisis is over.
The S&P 500 rally has been driven by a combination of factors. Strong productivity gains are allowing the US economy to expand despite sluggish employment growth. Wall Street analysts expect earnings to grow by 12.5% in the January–March period. Although Federal Reserve rates remain elevated, inflation-adjusted Treasury yields are not seen as a major headwind for equities.
S&P 500 and Forward Price-to-Earnings Ratio
Source: Bloomberg.
Given that non-residents have been actively hedging their exposure to US assets, the rally in stock indices is causing the US dollar to weaken. The surge in EUR/USD has been swift, as speculators had built up net long positions in the greenback to a 14-month high ahead of the US–Iran talks, and are now rapidly unwinding them.
Only an escalation of the conflict in the Middle East or a surge in US inflation could prevent the euro from strengthening. In the latter case, there will be rumors that the Fed may tighten monetary policy.
The EUR/USD rally may continue, but it will lose momentum as the currency pair moves higher. Current conditions in the oil market do not point to a significant price drop, and Brent’s consolidation at high levels will cause more pain for Europe than for the US.
Weekly Trading Plan for EUR/USD
In this connection, long positions on the EUR/USD pair established above 1.164 can be increased if the euro consolidates above 1.1765.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of EURUSD in real time mode
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