The clock is ticking. The date and time for the end of Donald Trump's ultimatum to Iran is approaching. However, the markets are behaving unusually calmly. US stock indices have risen, and with them, EUR/USD. It is rather strange to observe an increase in demand for risky assets when the chances of Washington and Tehran reaching an agreement are close to zero, and the likelihood of a new delay in the demands is low. The scenario with bombings of infrastructure has the highest likelihood, and in that case, one should buy safe havens.

According to the International Energy Agency, the current crisis in the oil market has surpassed the shocks of the 1970s and 2022 combined. The main victims are the oil-dependent economies of Asia and Europe. The ECB estimates that a pessimistic scenario will lead to inflation soaring to 6% and to a recession in the Eurozone. The first signs of worsening are already emerging—investor confidence in the currency bloc has plunged to its lowest point in over a year.

Dynamics of European Investor Confidence

The situation is exacerbated by a more than 60% increase in gas prices in Europe since the start of the armed conflict in the Middle East. Yes, four years ago, due to events in Ukraine, the price of blue fuel skyrocketed much faster. However, if the war in Iran drags on, the shocks will be even greater. In 2022, the euro fell below parity with the US dollar. For now, it holds steady.

The American economy appears to be much more resilient than the European one. Trump has suggested that allies take their oil independently, by force, or purchase it from the United States. They can increase energy exports and boost gas and oil production.

Dynamics of Gas Prices in Europe

So why is EUR/USD not in a hurry to move south? Perhaps investors are hoping for a ceasefire on the falling flag or another delay in Trump's ultimatum. However, the fact that the president's verdict will come after the stock market closes indicates that it could be anything—whether it be bombings of Iran's energy infrastructure or an assault on the strategically important island of Kharg.

Any escalation of the geopolitical conflict will stoke the Brent rally and support the US dollar as a safe-haven asset. There's a fine line between love and hate, so buying EUR/USD could be costly for investors.

Against this backdrop, the publication of the minutes from the March FOMC meeting regarding rate forecasts takes a back seat. The markets will consider it tomorrow. Today, geopolitics remains at the center of their attention.

Technically, on the daily chart, EUR/USD is still consolidating within the fair value range of 1.15–1.163. At the same time, a return of quotes below the moving averages and support at 1.1525 will be evidence of a bearish attack and a reason to form short positions. Consider buying if there is a successful breach of the pivot level of 1.159.