FUNDAMENTALOVERVIEWUSD:The US dollar weakenedacross the board on Thursday after a couple of de-escalatory headlines turnedthe risk sentiment around. That didn’t last long as the dollar started toregain ground on Friday after Wall Street Journal reported that the US wassending warships and thousands of additional marines to the Middle East despiteTrump’s assurances that he won’t put American boots on the ground in Iran. CBS news later doubled downon the reports saying that Trump’s administration was making heavy preparationsfor potential use of ground troops in Iran. Over the weekend, Trump issued anultimatum to Iran to reopen the Strait of Hormuz within 48 hours or face strikeson key infrastructure. The ultimatum is set toexpire this late evening, but it doesn’t look like Iran is going to followthrough at all, so that will likely traders on edge. Until we get a realde-escalation, the bullish US dollar trend should remain intact amid safe havendemand and rate hike bets. EUR:On the EUR side, the ECB keptinterest rates steady with an upward revision to the inflation forecasts and adowngrade to growth. The forward guidance language was left unchanged with adata-dependent and meeting-by-meeting approach, and no pre-commitment to anyrate path. The ECB stressed thatinflation implications will depend both on the intensity and duration of theconflict and on how energy prices will affect consumer prices and the economy. The usual “ECB sources”noted that the central bank may have to start debating a rate hike at the Aprilmeeting and potentially tighten in June barring a quick resolution of the conflict. The market went berserk onrate hike expectations with 85 bps of tightening priced in by year-end.EURUSD TECHNICALANALYSIS – DAILY TIMEFRAMEOn the daily chart, we cansee that EURUSD pulled back into the 1.16handle last week but eventually reversed following escalatory news. If we getanother pullback, we can expect the sellers to lean on the trendline with adefined risk above it to position for a drop into the 1.1395 level. The buyers,on the other hand, will look for a break higher to open the door for a rallyinto the 1.18 handle next.EURUSD TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we havean upward trendline defining the pullback from the 1.14 handle. If the pricefalls to the trendline, we can expect the buyers to lean on it with a defined riskbelow it to extend the pullback into the major downward trendline. The sellers,on the other hand, will look for a break lower to increase the bearish betsinto the 1.1395 level next targeting a breakout.EURUSD TECHNICAL ANALYSIS –1 HOUR TIMEFRAMEOn the 1 hour chart, we have a minor downward trendline defining thebearish momentum on this timeframe. If we get a pullback, we can expect thesellers to lean on the trendline with a defined risk above it to keep pushinginto new lows, while the buyers will look for a break higher to start targetingthe major downward trendline around the 1.1650 level. The red lines define the average daily range for today. UPCOMING CATALYSTSTomorrow we have the Eurozone and the US PMIs. On Thursday, we get the latest USJobless Claims figures. As a reminder, the focus is mainly on the US-Iran war,so keep an eye on the headlines. This article was written by Giuseppe Dellamotta at investinglive.com.