The euro (EUR) remains under pressure against the US dollar (USD) as the American currency enjoys stable demand amid the conflicting signals surrounding the US and Iran's efforts to reach a ceasefire agreement. While Washington hopes for a diplomatic breakthrough, uncertainty over Tehran's position is driving demand for the dollar as a safe-haven asset.

Iran has made it clear that it does not intend to accept US proposals: the state-affiliated Press TV reported that Tehran will agree to end the conflict only on its own terms. A senior political security representative stated that Iran "will not allow Trump to dictate the timeline for ending the war," emphasizing that any resolution is only possible if Tehran's demands are met. Key conditions include a complete cessation of attacks and killings, guarantees that hostilities will not resume, compensation for military damage, ending fighting on all regional fronts, and recognizing Iran's control over the Strait of Hormuz.

Reports that the US has proposed a 15-point plan for a month-long ceasefire to start negotiations have added to the uncertainty. According to media reports, the initiative involves restrictions on Iran's nuclear program and guarantees to keep the Strait of Hormuz open in exchange for possible sanction relief. However, the mixed signals from Washington and Tehran suggest that significant diplomatic breakthroughs are not expected in the near future, increasing the risk of a prolonged conflict. This fuels concerns about inflation amid rising oil prices and complicates the formulation of future monetary policy by major central banks.

Markets have fully priced in expectations of two interest rate hikes by the European Central Bank (ECB), while the probability of rate cuts by the Federal Reserve this year is largely already reflected in prices, and investors are increasingly working under the assumption that the Fed will keep rates unchanged until the end of 2026.

According to a Reuters survey published on Wednesday, of 60 economists, 38 believe that the ECB will maintain the deposit rate at 2.00% for the rest of the year, while 21 analysts now expect at least one rate hike in 2026.

Earlier on Wednesday, ECB President Christine Lagarde stated that the central bank "will not take action until it has sufficient information," noting that if the energy shock leads to a significant, albeit not very sustainable, exceedance of the inflation target, a "measured adjustment" of policy may be required. Lagarde also emphasized the importance of determining when the increase in energy prices begins to transform into broader, sustainable inflation across the Eurozone economy.

From a technical perspective, a bearish trend is observed. Oscillators are negative, indicating weakness among bulls and bear dominance in the market. For bulls to have an initial chance at growth, they must overcome the 20-day SMA, which will then open the way to more significant moving averages.