💥 US Dollar Jumps as Tensions Escalate in Middle East
The forex market opened the week with fireworks. The USD/JPY pair surged over 1%, reaching ¥147.60 from a morning open of ¥146.67 after the US launched airstrikes on three Iranian nuclear facilities over the weekend.
📊 USDJPY +1.22%
📉 EURUSD −0.52%
📉 GBPUSD −0.54%
Safe-haven flows were back on the menu as traders flocked to the US dollar amid fears of a broader Middle East conflict. The greenback’s strength saw it break the 100-day moving average, now heading towards the 50-day resistance at ¥149.47.
📡 What Triggered the Move?
The Pentagon confirmed the weekend strikes, which mark a significant escalation in US involvement in the Iran-Israel war.
🗣 Iran’s Supreme Leader Ali Khamenei said:
“The punishment continues… the Zionist enemy must be punished.”
Meanwhile, former President Donald Trump warned:
“There will be either peace, or there will be tragedy for Iran far greater than we have witnessed over the last eight days.”
Risk sentiment was mixed — Bitcoin rebounded, and stock futures stayed flat, showing that markets are cautious but not panicking.
🔮 What’s Next for USD/JPY?
The rally in USD/JPY isn’t just about war — traders now shift focus to this week’s US economic data:
📅 Key Events to Watch This Week:
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Tuesday: Consumer Confidence Report
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Wednesday: GDP Growth (Q2 Preliminary)
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Tuesday–Wednesday: Fed Chair Jerome Powell’s Senate Testimony
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Friday: PCE Inflation Report (Fed’s favored measure)
If Powell signals a hawkish stance, we may see further strength in the dollar and a potential test of ¥149.47, a key short-term resistance.
📈 Forex Chart Analysis: USD/JPY
Technical Snapshot:
100-day MA: Broken above
50-day MA: Next target at ¥149.47
200-day MA: Already cleared
RSI: Hovering near overbought, watch for retracement after fresh highs
🔁 Related Forex Pairs Movement:
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EUR/USD: Trading slightly lower near $1.1490, showing moderate dollar pressure.
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GBP/USD: Slightly weaker at $1.3435, but still holding up amid broader calm.
✍️ Final Thoughts
The USD/JPY rally today is a potent mix of geopolitics and macro expectations. With Fed commentary coming up and Iran likely planning a response, the market could remain volatile all week.
💬 Traders: Stay sharp, follow the headlines, and watch those support/resistance levels like a hawk.
