The euro/dollar pair tested the 1.14 figure at the start of the new trading week, marking 1.1488. However, a small corrective pullback followed after Donald Trump said that the US and Iran could reach an agreement in the coming days. According to him, the sides are now conducting both direct and indirect talks.

Such remarks allowed EUR/USD buyers to push the pair up by a few dozen points. Even so, the market continues to show skepticism about the prospects for a speedy end to the Middle East conflict. The hesitant and rather modest corrective retracement of EUR/USD only confirms this. In my view, this skepticism is quite justified. Therefore, longs in the pair still look unreliable and risky.

Let us begin with the fact that, alongside the talks (the very existence of which Iran flatly denies), the United States is actively preparing for a ground military operation. It is known that the number of US troops in the Middle East has already exceeded 50,000. According to The New York Times, the White House and the Pentagon plan to deploy paratroopers from the 82nd Airborne Division to seize Iran's Kharg Island—the country's main oil export hub in the northern Persian Gulf. Incidentally, Donald Trump himself allowed for such a scenario: in an interview with the Financial Times, he said he would like to take the oil in Iran following a Venezuela-style scenario (it is necessary to recall that 90% of Iran's oil exports pass through Kharg).

In turn, Washington Post sources claim that the Pentagon is preparing for possible prolonged ground operations in Iran—these could last several weeks and longer but would not involve a full-scale invasion. According to WP sources, these operations may aim, in particular, to capture Kharg Island or to destroy weapons in coastal areas near the Strait of Hormuz. The White House believes that seizing Iranian territory would create valuable leverage in future negotiations.

Such leaks jar with Trump's statements that he will soon strike a deal with Tehran. Although, literally today, the head of state said that Iran had agreed to most US conditions for ending the war, the United States wants to add a couple more points.

At the same time, Iran rejects US conditions and, last week, put forward its own counterconditions, including retention of Iranian control over the Strait of Hormuz, payment of reparations by the Americans, and guarantees against new attacks. Of course, Washington did not accept these conditions and continues to insist on its fifteen points.

Moreover, Iran is openly preparing for a US ground attack. Mohammad Bagher Ghalibaf, speaker of the Iranian parliament (who previously served as commander of the Islamic Revolutionary Guard Corps and mayor of Tehran), yesterday explicitly stated that the United States is secretly planning a ground assault despite diplomatic promises. He said that Iranian forces are ready for such a scenario.

Judging by EUR/USD traders' reaction, market participants do not believe Donald Trump's US diplomatic signals are being interpreted through the prism of past experience, when "soothing" messages from the White House chief preceded another round of escalation.

In other words, the market fears that the talks, or the illusion of talks, may be a tactical pause before a ground invasion.

Fuel was poured on the fire by news that another actor has entered the Middle East conflict — the Yemeni Houthis. Alongside attempts to strike Israel, their militant activity could complicate shipping in the region. In particular, the EU naval mission Aspides has already warned of the threat of attacks by this pro-Iran movement on international shipping in the Red Sea and the eastern Gulf of Aden. According to representatives of that organization, vessels in this area could again come under attack.

Thus, despite Trump's peaceful statements, anti-risk sentiment continues to predominate in the markets, and the safe-haven dollar remains in high demand. Therefore, corrective spikes in EUR/USD should be used as opportunities to open short positions.

Technical indicators also point to a priority for shorts. On the four-hour and daily charts, the pair is positioned between the middle and lower Bollinger Bands lines and is also below all lines of the Ichimoku indicator, which demonstrates a bearish "Parade of Lines" signal. On the weekly chart the pair is also between the middle and lower Bollinger Bands lines, below the Tenkan-sen and Kijun-sen lines, but inside the Kumo cloud. The nearest target of the southward move is 1.1480 (the lower Bollinger Band on H4), the main target is 1.1440 (the lower Bollinger Band on D1).