Oil Slides Below $74 as Markets Fade Iran Strike Fears, USD Eases

Crude oil retreated sharply from overnight highs, with WTI falling 2.1% to $73.80 as initial panic over potential US-Iran military escalation subsided. The dollar index pulled back 0.3% from session highs at 106.20, allowing EUR/USD to recover to 1.0825 and GBP/USD to 1.2640. Energy-linked currencies showed mixed performance, with CAD/USD gaining 0.2% to 0.7285 despite oil weakness, supported by strong Canadian retail sales data. Risk appetite partially returned as S&P futures rebounded 0.4% from early declines. Asian markets remained cautious with the Nikkei down 0.6% and Shanghai Composite flat. Technical analysis shows oil finding support at the 50-day moving average ($73.50), while USD index faces resistance at the 200-day MA (106.45). Traders are reassessing geopolitical risk premiums, with many viewing the measured responses from both sides as reducing immediate escalation probability.