The USD remains stable as Middle East tensions dominate markets. ECB's hawkish stance and technical outlooks for EURUSD, USDJPY, GBPUSD analyzed.
Market Overview: USD Stable Amid Geopolitical Uncertainty
The US dollar traded sideways against major currencies at the start of the North American session as forex markets reacted to escalating Middle East tensions. The DXY held near 104.50, with EURUSD at 1.1427, USDJPY at 162.46, and GBPUSD at 1.3390.
Middle East Escalation Drives Risk Sentiment
US Central Command confirmed airstrikes targeting 90 Iranian sites overnight, following 80 strikes the previous day. Iran reported 14 deaths and 78 injuries, while attacks on US bases in Bahrain, Kuwait, and Qatar raised fears of broader conflict. Oil prices rose 0.60% to $73.95, and gold climbed 0.76% to $4,111 amid safe-haven demand.
ECB Minutes Signal Hawkish Policy Outlook
European Central Bank officials expressed concern over persistent inflation risks, citing energy price pressures and second-round effects. The probability of a July rate hike increased to 36%, while policymakers emphasized data-dependent decisions. AI-driven labor market shifts and structural growth risks were noted as downside factors.
Technical Analysis: Key Levels for Major Pairs
- EURUSD: Bias neutral; resistance at 1.1450, support at 1.1400.
- USDJPY: Slight bearish tilt; key support at 162.00, resistance at 163.00.
- GBPUSD: Sideways trading; 1.3400 resistance, 1.3350 support.
NZDUSD outperformed, rising 0.60% to 0.5733 after the RBNZ's rate hike, with a target at 0.5744.
Yield and Data Watch
US Treasury yields edged higher, with the 10-year at 4.583%. Initial jobless claims and existing home sales data are due, alongside a 30-year bond auction. Markets remain cautious ahead of geopolitical developments.
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