USD Faces Safe-Haven Volatility as Iran-US Conflict Escalates

The escalating military conflict between Iran and the United States is injecting significant volatility into forex markets, with traditional safe-haven currencies seeing heightened demand. The conflict has intensified as Iran demonstrated retaliatory capabilities, reportedly downing a U.S. aircraft, signaling this is far from a one-sided engagement. USD/JPY is under pressure as traders flock to the Japanese yen, while USD/CHF faces similar downward momentum amid Swiss franc safe-haven buying. Gold-correlated currencies such as AUD/USD may see mixed impacts as gold prices surge on geopolitical risk, but risk-off sentiment broadly weighs on commodity currencies. Oil prices are expected to spike sharply given Iran's strategic position near the Strait of Hormuz, providing potential support to CAD through crude oil linkage. EUR/USD could see upside as capital flows out of U.S. assets amid uncertainty over the conflict's economic toll. Traders should monitor key support at USD/JPY 148.00 and resistance at EUR/USD 1.1000. Elevated volatility and widening spreads are expected across all major pairs, warranting tighter risk management and reduced position sizing in the near term.