Demand for risk assets has returned, and the U.S. dollar has weakened slightly following news that the first session of American-Iranian negotiations concluded with a cautiously positive outcome. Mediators from Qatar and Pakistan reported encouraging progress and the establishment of a mechanism for further technical negotiations. The parties also agreed on a roadmap to achieve a final agreement within 60 days.

The specifics of the negotiations are more reassuring than vague statements. The parties established a line of communication to prevent incidents and ensure the safe passage of vessels through the Strait of Hormuz. A conflict resolution coordination center has been created involving Lebanon, as the Lebanese track has repeatedly threatened the entire structure. Iranian Foreign Minister Araqchi listed what has already been achieved: oil and petrochemical exports have resumed, the blockade has been lifted, part of the frozen assets has been unfrozen, and a plan for Iran's reconstruction has been launched.

Nevertheless, the path to a final agreement will be fraught with challenges, as Sunday clearly demonstrated. The negotiations began with confusion: Iranian media reported the suspension of discussions following another threat from Trump to strike if Hezbollah continued its attacks on Israel. Trump himself, in his characteristic fashion, stated in an interview with Fox News that he told Iranian leaders directly, if they close the Strait of Hormuz, "you won't even return" to Iran, using an expletive. He also threatened to impose a fee for passage through the strait if a deal was not reached. A notable detail of diplomatic protocol is that the Iranian delegation refused to participate in the opening televised address and was not present in the room until negotiations began—Tehran did not want to be seen shaking hands with Americans before an agreement was reached.

As I noted earlier, the key issue of the entire framework of the peace agreement is Lebanon, and through it, Israel. A positive outcome ultimately depends on Israeli support, and only the withdrawal of Israeli troops from Lebanon can provide a full guarantee, which Netanyahu is unlikely to agree to. At the same time, Israel was also not a participant in the negotiations and insists on maintaining a military presence until Hezbollah no longer poses a threat. This is a vicious circle: Iran demands an end to hostilities in Lebanon, Israel refuses to withdraw, and the U.S. finds itself mediating between an ally that is uncontrollable and an adversary with whom it is negotiating.

We are facing 60 days of technical negotiations with unresolved issues concerning the nuclear program, economic assistance, and Lebanese settlement. The main event for markets this week will be the release of U.S. PCE data — this will indicate how justified the hawkish pivot in Federal Reserve rate expectations is.

As for the current technical picture of EUR/USD, buyers need to consider how to reclaim the 1.1485 level. Only this will allow for a test of 1.1530. From there, one could aim for 1.1590, but doing so without support from major players will be quite challenging. If the trading instrument declines, I expect any serious actions from major buyers only around 1.1450. If no one is present there, it would be wise to wait for an update of the low at 1.1425 or to open long positions from 1.1385.

Regarding the current technical picture of GBP/USD, pound buyers need to reclaim the nearest resistance at 1.3250. Only this will allow for targeting 1.3285, above which it will be quite difficult to break through. The furthest target will be the area of 1.3325. In the event of a decline, bears will attempt to gain control over 1.3200. If successful, breaking through this range will deliver a serious blow to the bulls' positions and push GBP/USD toward the 1.3160 low, with the prospect of reaching 1.3131.