USD/JPY, EUR/USD Whipsaw as Iran Conflict Fears Lift Oil Prices

Global forex markets experienced heightened volatility on Monday as a brief relief rally was abruptly reversed by renewed fears of escalation in the US-Iran conflict. Crude oil prices surged on the geopolitical risk premium, pressuring commodity-importing currencies like JPY and EUR while providing temporary support to commodity-linked pairs. The USD initially benefited from safe-haven demand before surrendering gains as risk sentiment deteriorated across asset classes. USD/JPY saw choppy price action as competing forces of dollar strength and yen safe-haven buying created two-way flows. EUR/USD also traded erratically, with the pair sensitive to shifts in risk appetite. The rapid reversal of Monday's optimism underscores the fragile nature of current market positioning, with traders reluctant to hold large directional bets amid unpredictable geopolitical headlines. Key support for EUR/USD sits near recent lows, while USD/JPY faces resistance at recent highs. Traders are advised to maintain tight risk management as headline-driven volatility is expected to persist through the week.