FUNDAMENTAL OVERVIEW USD:The US dollar started to regain ground in recent days as the prolonged US-Iran conflict and surging oil prices trumped the hopes for a quick de-escalation. The situation in the Middle East is getting even worse as the Houthis started to disrupt the Bab el-Mandeb strait and the Red Sea. There’s still no end in sight to this crisis and the risk sentiment remains negative. Given this backdrop, we saw a hawkish repricing across the board with the total Fed tightening now standing around 43 bps by year-end, compared to 32 bps last week after the soft US inflation data. The chances for a rate hike at the upcoming meeting in July have also risen back to 33%. The US-Iran conflict will continue to support the US dollar amid the Fed tightening risk and negative risk sentiment. Traders will watch out for signs of de-escalation as that could trigger a dovish repricing and weigh on the greenback.EUR:On the EUR side, the ECB is expected to leave interest rates unchanged today while reiterating that it remains well positioned to navigate the uncertainty caused by the war and that it will continue to follow a data-dependent and meeting-by-meeting approach. The central bank will not release the macroeconomic projections at this meeting, so the market focus will be mainly on President Lagarde's press conference for clues on whether policymakers are preparing for another rate hike in September.The most likely scenario is that we get the usual post-meeting media "leak" signalling a rate hike in September if inflation data were to surprise to the upside. The market is pricing in a total of 47 bps of tightening by year-end (roughly two rate hikes) and a 73% chance of an increase at the next meeting in September. Given this backdrop, it's going to be hard for Lagarde to out-hawk the market. Overall, the decision is likely to be a non-event with risks skewed to the downside for the euro. A pushback against the market pricing would trigger a selloff, while a pledge to tighten more than expected will likely lead to a short-term rally. EURUSD TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that EURUSDbounced from the key support zone around the 1.14 handle and it continues to compress below the trendline. The sellers will likely step in around the trendline with a defined risk above it to position for a drop into the 1.13 handle. The buyers, on the other hand, will want to see the price breaking higher to open the door for a rally into the 1.16 handle next.EURUSD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we have an upward trendline defining the recent correction. The buyers will likely continue to lean on the trendline with a defined risk below it to keep targeting a break above the major trendline. The sellers, on the other hand, will want to see the price breaking below the trendline and the support to pile in for a drop into the 1.13 handle next.EURUSD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, there’s not much we can add here as the sellers will either wait for a break below the support or a pullback into the downward trendline. The buyers, on the other hand, will continue to step in around the upward trendline and wait for a break above the downward trendline to increase the bullish bets into new highs. The red lines define the average daily range for today. UPCOMING CATALYSTSToday, we have the ECB policy decision and the US Jobless Claims data, while tomorrow we conclude the week with the Eurozone and US Flash PMIs. The focus remains on US-Iran headlines. This article was written by Giuseppe Dellamotta at investinglive.com.