The euro's rebound lacks a solid foundation; it is not advisable to chase the highs before geopolitical tensions subside.

(1) ING analysts remind that the resumption of military strikes in the Middle East means geopolitical risks have not truly subsided, and caution should still be exercised regarding the euro against the dollar at the current level. (2) For the euro to remain steadily above 1.15, multiple conditions must be met: US economic data must weaken or the Federal Reserve must issue more dovish signals to lower market expectations for a US rate hike, while global risk appetite needs to stabilize in tandem. (3) The market is currently optimistic about a de-escalation of the conflict; if this judgment proves correct, the euro against the dollar may have already seen a short-term bottom, but the volatility of the geopolitical situation remains the greatest source of uncertainty. (4) The recent rebound in the euro has been driven more by the correction in the US dollar and improved sentiment, lacking strong fundamental support; if the Middle East situation escalates again or US interest rate expectations rise, the euro will face a new round of pressure. (5) From a trading perspective, close attention should be paid to US data this week and statements from Federal Reserve officials; if expectations for rate cuts cannot be further strengthened, the euro’s upside will be limited, and a range-bound strategy is advisable in the short term.