Risk-Off Dominates Forex as Middle East War Drives Oil Above $100

Global forex markets are firmly in risk-off mode as renewed geopolitical risks from escalated attacks on oil and transport infrastructure across the Middle East sent crude oil prices surging above $100 per barrel. The persistent rise in energy costs has amplified inflation concerns worldwide, pressuring central banks that were previously leaning toward rate cuts. The US dollar and Japanese yen outperformed as traditional safe-haven currencies, with USD/CHF dipping as the Swiss franc also attracted defensive flows. EUR/USD dropped approximately 50 pips as the eurozone faces acute vulnerability to energy supply disruptions given its import dependency. GBP/USD also weakened, trading near session lows. Emerging market and commodity-importing currencies bore the brunt of selling pressure. Technical indicators show the VIX-equivalent forex volatility measures spiking to multi-month highs. Key levels to monitor include EUR/USD support at 1.0750 and USD/JPY resistance at 152.00. Traders should maintain reduced position sizes given the elevated headline risk environment.