FUNDAMENTALOVERVIEWUSD:The US dollar regained some ground this week as US and Iran rejected therespective war-ending proposals and US inflation data came out higher thanexpected. Overall, the market remains rangebound as traders continue to waitfor new developments before picking a direction. Looking ahead, the Fed is slowly abandoning the easing bias with more andmore policymakers talking about the need of keeping all options on the tableand some explicitly bringing up rate hikes. The reopening of the Strait could weigh on the greenback in the short-termas oil prices will likely fall quickly and rate cut bets will increase oneasing inflation worries.After that though, the focus will quickly turn back to the Fed and theeconomic data. With the end of the war, the increase in economic activity couldkeep inflation higher for longer and eventually even require rate hikes tobring it sustainably back to the 2% target that the Fed has been missing since2021.There’s also another scenario where the Strait remains closed for longerand oil prices stay elevated, with the risk that the Fed turns hawkish anywayand gives the greenback a strong boost given the bearish positioning on thedollar. EUR:On the EUR side, a Junerate hike is not basically a done deal as policymakers hinted that thesituation in the Middle East and oil prices will need to change markedly to steerthem away a rate hike. The market is pricing in an87% chance of a rate hike in June and a total of 70 bps of tightening byyear-end (almost 3 rate hikes). This makes it harder for the euro to rally oninterest rate expectations alone as the ECB is unlikely to “outhawk” the marketpricing. The recent economic datahas been highlighting the ugly combination of weaker economic activity andstronger price pressures. There is no strong case for multiple rate hikes yet.The ECB wants to err on the cautious side and deliver an insurance hike if thesituation doesn’t change before June. After that, we can expectthe central bank to stay on hold until September at very least as they gathermore data over the summer. EURUSD TECHNICALANALYSIS – DAILY TIMEFRAMEOn the daily chart, we cansee that EURUSD rejected the resistance zonearound the 1.18 handle and it’s now approaching the support zone around the1.1660 level. If the price gets there, we can expect the buyers to step in witha defined risk below the support to position for a rally back into theresistance. The sellers, on the other hand, will want to see the price breakinglower to increase the bearish bets into the 1.15 handle next.EURUSD TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we cansee the price is consolidating near the broken upward trendline. We can expectthe sellers to step in around these levels with a defined risk above thetrendline to keep pushing into the support. The buyers, on the other hand, willwant to see the price rising back above the trendline to pile in for a rallyback into the resistance. EURUSD TECHNICAL ANALYSIS –1 HOUR TIMEFRAMEOn the 1 hour chart, there’s not much we can add here as the sellers will havea better risk to reward setup around the broken trendline, while the buyerswill need to wait for a drop into the support or a rally back above thetrendline. The red lines define the average daily range for today. UPCOMING CATALYSTSToday we get the US Retail Sales report and the latest US Jobless Claimsfigures. This article was written by Giuseppe Dellamotta at investinglive.com.