The USD holds steady against major currencies as Middle East escalations dominate market sentiment. Technical analysis highlights key levels for EURUSD, USDJPY, and GBPUSD.
Market Overview: USD Stagnant as Geopolitical Risks Weigh on Sentiment
The US dollar traded sideways against major peers on Thursday, with the DXY index holding near 105.00 amid heightened geopolitical uncertainty following fresh US-Iran military strikes. The FX market remained cautious as traders assessed the implications of escalating Middle East tensions on risk sentiment and inflation dynamics.
Technical Analysis: EURUSD, USDJPY, and GBPUSD
EURUSD (1.1427, +0.11%) faces resistance at 1.1450, with bullish momentum supported by ECB hawkish signals. A break above this level could target 1.1500. USDJPY (162.46, -0.07%) remains under pressure, with support seen at 162.00 ahead of the 161.50 psychological zone. GBPUSD (1.3390, +0.03%) consolidates above 1.3350, with upside potential toward 1.3450 if risk appetite improves.
NZDUSD Surges Post-Rate Hike
The NZDUSD (0.5733, +0.60%) outperformed, extending gains after the RBNZ's rate hike. The pair breached 0.5726, targeting the 0.5744 midpoint from the prior decline.
Geopolitical Escalation Drives Safe-Haven Demand
The US conducted airstrikes on Iran, targeting 90 sites in response to attacks on commercial vessels. Iran retaliated by striking US bases in Bahrain, Kuwait, and Qatar. Oil prices rose 0.60% to $73.95, while gold and silver gained amid safe-haven flows. Bitcoin held steady at $62,742.
ECB Minutes Signal Hawkish Caution
ECB policymakers emphasized persistent inflation risks, citing energy pressures and elevated expectations. While growth concerns lingered, officials signaled readiness to act if second-round effects emerge. Markets priced in a 36% chance of a July rate hike, down from 40% earlier.
US Economic Data and Yield Trends
US Treasury yields rose marginally, with the 10-year at 4.583%. Initial jobless claims and existing home sales data are due later, alongside a $30 billion 30-year bond auction.
Implications for Traders
Geopolitical risks dominate short-term USD direction, with technical levels in EURUSD and USDJPY critical for intraday strategies. ECB rhetoric supports EUR bulls, while NZDUSD momentum offers opportunities amid diverging monetary policies.
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