The situation in Iran has driven up energy prices, which in turn has increased inflation expectations. Eurozone government bonds have recorded one of the worst monthly sell-offs in nearly a decade. Borrowing costs in countries like Italy, France, and Spain have surged to multi-year highs, while market concerns have simultaneously intensified, as governments are forced to increase fiscal spending to protect consumers. The yield on Italy's 10-year government bond once rose to 4.14% this month, a new high since mid-2024, with a cumulative increase of about 0.8 percentage points. The scale of the sell-off is comparable to that during the previous energy crisis in 2022. The French 10-year yield touched nearly 3.9% intraday, the highest level since 2009. Spain's yield during the same period approached 3.7%, the first time since late 2023. The Iranian shock has driven up oil and gas prices, raising inflation expectations, and the European Central Bank (ECB) may be forced to raise interest rates three times this year. Meanwhile, national finances are deteriorating due to energy subsidy measures, the bond market sell-off is intensifying, and borrowing costs are spiraling upward.

From a daily perspective, the Bollinger Bands are expanding downwards, and the moving averages are diverging lower, indicating that the overall downtrend remains unchanged. The MACD's downward momentum has weakened, with both lines forming a golden cross and pulling back towards the zero line. Currently, they are still far from the axis, suggesting the rebound is not yet complete. The price will likely continue to rebound towards the EMA50 and the Bollinger Middle Band, located at 1.165 and 1.16, respectively. The RSI is at 40, indicating a pessimistic market sentiment. Based on the 4-hour chart, the Bollinger Bands are also expanding downwards, and the moving averages are diverging downwards. The price is oscillating downwards between the Bollinger Lower Band and the EMA12. However, the MACD is about to form a golden cross, and a rebound could occur at any time. The RSI is at 39, reflecting a pessimistic market sentiment. In the short term, the trend will turn from bearish to bullish unless a new low is hit. Thus, it is better to buy the dips.

Trading direction: Buy

Entry Price: 1.15

Target Price: 1.18

Stop Loss: 1.14

Support: 1.145/1.14/1.13

Resistance: 1.17/1.18/1.21