Oil consolidates as Israel-Iran tensions ease, forex volatility subsides

Crude oil prices have stabilized around $78.50/barrel after Friday's 2.1% surge was largely erased as Middle East tensions cooled without supply disruptions. The initial spike in oil prices had strengthened commodity currencies, with CAD/USD gaining 0.4% and NOK/USD up 0.5% on Friday before retracing Monday. Markets are monitoring developments between Israel and Iran, though the lack of infrastructure damage has calmed immediate supply concerns. Energy-linked currencies remain in consolidation mode, with USD/CAD holding near 1.3650 and USD/NOK around 10.85. Technical indicators suggest range-bound trading unless fresh escalation emerges. For forex traders, further de-escalation could weaken commodity currencies against the US dollar, while any supply disruption threats would likely boost CAD, NOK, and RUB positions. Near-term support for USD/CAD sits at 1.3620, with resistance at 1.3680.