FUNDAMENTALOVERVIEWUSD:The US dollar has beengradually strengthening since Tuesday as the US-Iran stalemate led to someprofit-taking on bearish dollar bets. There’s still no clear sign of a secondround of talks after Iran refused to send a delegation to Islamabad on Tuesdaydue to the US blockade in the Strait of Hormuz. The only good thing that isholding everything from puking hard is the ceasefire. Just today the Israel andLebanon ceasefire got extended by another three weeks and the US-Iran ceasefirelooks to be open-ended. In the meantime, everyonehas been replenishing their military stockpiles, with the US sending more shipsand military forces to the Middle East. Traders will need to stay nimblebecause things can get ugly very quickly. The price action continuesto be driven by US-Iran headlines, and this is unlikely to change until we getan official resolution. EUR:On the EUR side, nothinghas changed as ECB policymakers continue to reiterate their hawkish bias whilecalling for patience given the unpredictability of the US-Iran situation. Arate hike in April is now off the table after the pushback from several members,but June is still seen as live with the market pricing in a 67% probability.The PMIsyesterday highlighted the bad combination of weaker economic activity andstronger price pressures. This complicates the job for the ECB as they can onlywork on demand and therefore risk exacerbating the economic damage. In case the war ends beforethe June meeting, the ECB will likely look through the short-term impact andkeep their neutral stance at least until September as they gather more data inthe summer. If the current stalematedrags on and the supply disruptions persist, recession fears will likelyincrease, which should ultimately weigh on the euro. On the other hand, aresolution might keep the euro supported in the short-term on better risksentiment.EURUSD TECHNICALANALYSIS – DAILY TIMEFRAMEOn the daily chart, we cansee that EURUSD has extended the pullbackthis week amid the US-Iran stalemate, with the major support around the 1.1640level now getting in sight. If the price gets there, we can expect the buyersto step in with a defined risk below the support to position for a rally intothe 1.20 level. The sellers, on the other hand, will want to see the price breakinglower to pile in and target a move back into the 1.14 handle. EURUSD TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we havea downward trendline defining the current pullback into the support. We canexpect the sellers to continue to lean on the trendline to keep pushing intonew lows, while the buyers will look for a break to pile in for a rally intonew highs, although the risk to reward setup would be better around thesupport. EURUSD TECHNICAL ANALYSIS –1 HOUR TIMEFRAMEOn the 1 hour chart, there’s not much we can add here as the sellers willlikely continue to lean on the trendline to keep pushing into new lows, whilethe buyers will look for a break to pile in for new highs. The red lines definethe average daily range for today. UPCOMING CATALYSTSToday we conclude the week with the final University of Michigan ConsumerSentiment report, but the focus will remain on the US-Iran headlines. This article was written by Giuseppe Dellamotta at investinglive.com.