Oil Drops, Risk Sentiment Lifts EUR/USD as US-Iran War Hopes Ease

European markets saw a broad risk-on shift on March 25, 2026, as oil prices fell to weekly lows following headlines suggesting optimism around a potential resolution to the US-Iran conflict. Trump's rhetoric helped cap upside in crude, though Iran's ambassador to Pakistan denied any direct talks between the US and Iran, keeping geopolitical uncertainty alive. US equity futures pushed higher, delaying a technical breakdown, while gold recovered some ground as safe-haven flows recalibrated. Japan reportedly called on the IEA to coordinate additional oil stockpile releases, adding further downward pressure on energy prices. The ECB's policy stance remains in focus amid the shifting macro backdrop. For forex traders, the improved risk mood supported EUR/USD and risk-sensitive currencies while weighing on traditional safe havens like JPY and CHF. Key support and resistance levels across major pairs are being tested as markets balance geopolitical risk against improving sentiment. Traders should watch for further developments on the US-Iran front and ECB commentary for directional cues.