The USD remains stable against major currencies as Middle East tensions dominate market sentiment. Technical analysis highlights EURUSD, USDJPY, and GBPUSD dynamics.
USD Stability Amid Geopolitical Uncertainty
The US dollar showed minimal movement against major currencies at the start of the North American trading session, as foreign exchange markets remained cautious amid escalating tensions in the Middle East. The EURUSD traded at 1.1427 (+0.11%), USDJPY at 162.46 (-0.07%), and GBPUSD at 1.3390 (+0.03%), reflecting a lack of clear directional bias.
Technical Analysis: EURUSD, USDJPY, GBPUSD
From a technical perspective, EURUSD faces resistance near 1.1450, with bullish momentum supported by the recent bounce off the 1.1400 level. A break above 1.1450 could target 1.1480. USDJPY remains range-bound, with support at 162.00 and resistance around 163.00. GBPUSD holds above 1.3350, with potential for further gains if it clears 1.3420.
Middle East Escalation and Market Impact
The US military conducted fresh airstrikes on Iran, targeting approximately 90 locations to counter threats to shipping in the Strait of Hormuz. Iran reported 14 fatalities and 78 injuries over two days, while also claiming attacks on US bases in Bahrain, Kuwait, and Qatar. Oil prices rose marginally to $73.95 (+0.60%), with gold and silver gaining 0.76% and 1.47%, respectively, as investors sought safe-haven assets.
ECB Hawkish Tone and Inflation Concerns
European Central Bank minutes revealed policymakers' concerns over persistent inflation, with core prices expected to remain above the 2% target. Officials cited energy-related pressures and rising inflation expectations, though they acknowledged downside risks to economic growth. The probability of a July ECB rate hike fluctuated between 36% and 40%, reflecting market uncertainty.
US Market Indicators and Upcoming Data
US stock futures rose, with the Dow up 39 points, S&P 500 up 12.29 points, and Nasdaq up 264 points. Bond yields climbed, with the 10-year note at 4.583% (+1.6 basis points). Traders await US initial jobless claims (expected 218K) and existing home sales (4.20 million annualized) for further cues.
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