The EUR/USD pair continues to trade within a narrow range, reflecting indecision among both buyers and sellers. On Tuesday, sellers recorded a low at 1.1558 but finished the trading day within the 16 figure. Buyers also failed to take the initiative in the pair: after peaking at 1.1629 (Tuesday's high), they could not hold that level, dropping to 1.1611 by the end of Tuesday's trading.

On Wednesday, traders were once again "circling" within a relatively narrow price corridor. EUR/USD buyers are attempting to break through the resistance level at 1.1630 (the upper Bollinger Bands line on the 4-hour chart), while sellers are trying to push through the support level at 1.1570 (the middle Bollinger Bands line on the same timeframe). However, the pair is essentially drifting within this range, bouncing back and forth along its borders.

Background support for EUR/USD buyers came from the IFO indices released on Wednesday. Unlike the disappointing ZEW data, Wednesday's report was quite contradictory.

The main business climate index in Germany was slightly above the consensus forecast, although it reflected negative dynamics. This month, the index decreased to 86.4 - its lowest level since February last year, while most analysts predicted a more significant decline to 86.1.

Another component of the report—the current situation assessment index from IFO—exceeded expert expectations, remaining at the previous month's level of 86.7 (with a forecast decline to 86.0). This indicates that German businesses assess their current position as more resilient than many analysts expected.

However, the expectations index was disappointing. It not only fell from February's figure of 90.2 to 86.0 (the lowest level since February 2025), but also came in below most forecasts (86.6). This is not surprising, as this is where the primary pessimism related to geopolitics and energy prices is embedded.

It is also worth noting the sectoral gap: while pessimism is increasing in the industrial sector, services are showing greater resilience to current shocks. Overall, the report published on Wednesday suggests that German businesses (for now) do not see a sharp deterioration in current conditions but are more pessimistic about future prospects.

The contradictory signals from the IFO report effectively did not help either buyers or sellers of EUR/USD.

Geopolitical factors also raise more questions than answers. The United States simultaneously broadcasts signals of a diplomatic breakthrough with Iran (which the Iranians deny) while increasing its military presence in the region.

For example, on Tuesday, Donald Trump stated that the US and Iran, through intermediaries, had reached an agreement on 15 points of a potential future agreement. In particular, according to Trump, Tehran "has agreed that it will never have nuclear weapons."

According to The New York Times, Washington's plan concerns Iran's ballistic missile program, the country's nuclear program, and maritime shipping issues. Additionally, Iranian sources from Reuters claim that Pakistan or Turkey could serve as venues for negotiations aimed at de-escalating the war in the Persian Gulf.

At the official level, Iran denies any agreements with the US. At least in public, Tehran demonstrates an uncompromising position. For instance, a senior representative of Iran's armed forces characterized Trump's statements as a "psychological operation," asserting that the Americans are negotiating "with themselves" to stabilize the oil market and prepare for new escalation cycles.

It is important to note that previous US strikes on Iran (both this year and last) were indeed preceded by "soft" or hopeful signals from Trump. Therefore, Iranian fears in this context are justified. Moreover, the United States continues to bolster its military grouping in the region. The Pentagon is redeploying special forces, Marines, and paratroopers to the Middle East. Military circles are discussing a scenario involving the capture of Kharg Island, through which about 85-90% of Iran's oil exports pass. If negotiations break down (i.e., if the Iranians reject the aforementioned 15-point "de-escalation plan"), Trump will likely attempt to "shut down" Iran's economy through physical control of its oil terminals.

There is also another factor—so to speak, "food for thought." The postponed deadline of the ultimatum expires on Friday, while Trump always initiates serious escalation after the global markets close for the weekend (again, following the precedent of previous operations).

The stakes are very high: if the planned operation is successful (for the US), Iran will lose almost all foreign currency inflows, and its leadership will face the choice of either accepting the notorious "15 points of the deal" or facing internal default. In the short term, the oil market could spike to $120-130 (due to uncertainty), but in the medium term, prices could plummet sharply if the US guarantees the safety of shipping in the Strait and/or resumes oil shipments under its control.

However, if the military operation to capture Kharg Island fails (i.e., if the landing force encounters effective defenses, suffers heavy losses, and/or fails to hold the island), oil could soar to $150-200 with all the ensuing consequences.

In such uncertainty, any trading decisions appear risky. If rumors of negotiations between the US and Iran are confirmed (the parties agree to hold a round of talks), interest in risk assets will strengthen again, and the EUR/USD pair will stabilize within the 16-figure range. Yet, the closer the ultimatum's deadline approaches without any diplomatic progress, the stronger the dollar's position as a safe-haven asset will be.

In these conditions, both long and short positions in the EUR/USD pair seem unreliable: the world is holding its breath in anticipation of a geopolitical resolution whose outcome is impossible to predict.