FX markets roiled by Iran-Israel tensions; EUR/USD holds 1.0650 support

Global forex markets experienced significant volatility as Iran-Israel conflict fears dominated trading, with safe-haven currencies seeing mixed performance. EUR/USD maintained support at 1.0650 despite broad risk-off sentiment, as traders balanced geopolitical concerns against diverging central bank policies. The Strait of Hormuz emerged as a critical risk factor, with potential disruptions threatening 20% of global oil supply and sending crude prices 3% higher. USD/JPY initially surged on haven flows but later reversed, while commodity currencies AUD/USD and NZD/USD fell 0.5% each. The ECB's hawkish stance provided euro support, with officials signaling rates may remain elevated longer than previously expected. Meanwhile, Fed policy expectations shifted toward a more cautious approach given geopolitical uncertainties. Technical levels show EUR/USD facing resistance at 1.0700, while broader market sentiment remains fragile pending further Middle East developments.