EUR/USD Faces Drop to 1.16 as Iran Tensions Fuel Safe-Haven Dollar Demand

EUR/USD is under significant bearish pressure amid escalating geopolitical tensions involving Iran, with analysts projecting a potential decline to the 1.16 level should the situation deteriorate further. The US dollar is benefiting from its traditional safe-haven status, drawing capital flows away from the euro as risk aversion intensifies across global markets. The USD/JPY pair is also in focus as the Japanese yen competes with the dollar for safe-haven demand, while EUR/GBP cross dynamics add further complexity to euro positioning. The US Dollar Index Futures have firmed considerably, reflecting broad-based dollar strength against a basket of major currencies. From a technical perspective, a sustained break below key support levels in EUR/USD could accelerate the move toward 1.16, a level not tested in recent sessions. Traders should monitor developments in the Middle East closely, as any further escalation or de-escalation could trigger sharp intraday moves. Risk management is critical given the heightened volatility environment, and upcoming economic data releases may take a backseat to geopolitical headlines in driving price action.