EUR/USD Rally Fades as Iran Denial Revives US Dollar Demand

EUR/USD surrendered earlier gains and pulled back from intraday highs as Iran's denial of escalation reports brought US dollar buyers back into the market. The pair had initially rallied on broad dollar weakness driven by Middle East tensions, with risk-off flows favoring the euro as an alternative reserve currency. However, the reversal was swift once Iran's denial eased geopolitical fears, allowing the greenback to reassert its yield advantage. The move highlights how sensitive forex markets remain to geopolitical headline risk, with EUR/USD swinging in a roughly 60-pip range during the session. GBP/USD followed a similar pattern, retracing gains as dollar demand returned, while USD/JPY bounced off session lows. AUD/USD also retreated from its peak. From a technical perspective, EUR/USD faces immediate resistance near 1.0870, while support is forming around 1.0810. Traders should remain cautious as further geopolitical developments could trigger renewed volatility. The near-term bias has shifted back toward the dollar as risk premiums unwind.