RBC Research discusses EUR/USD outlook and targets the pair at 1.17 in Q2 and 1.120 by year-end.

"In the short-term, EUR/USD is facing two-way risk, but we view the risk-reward as more asymmetric to the upside in the medium term.

If the ceasefire holds, then EUR/USD will receive a further boost as the ‘conflict’ premium is priced out and markets revert to a grind lower in the USD in the medium-term," RBC notes.

If the Iran conflict escalates and materializes into sustained closure of shipping chokepoints or the peace process breaks down, then EUR/USD will be under pressure again, but that move may be tempered or even reversed if the EZ-US policy rate gap narrows," RBC adds.