Risk-off hits AUD/USD and EUR/USD as Iran sanctions lift oil, inflation fears

Global risk sentiment deteriorated, with AUD/USD easing around 0.4% and EUR/USD drifting lower as equity indices in Europe and Asia closed in negative territory. The catalyst was the looming package of US sanctions against Iran, which raises the risk of a supply-side spike in crude oil prices and a renewed pass-through into headline inflation. Higher energy costs complicate the disinflation path that has underpinned expectations for further Federal Reserve and European Central Bank easing, and rate-cut pricing was trimmed across the curve. Oil-linked currencies split: USD/CAD was capped by firmer crude, while NOK outperformed, and net oil importers including the yen and euro faced terms-of-trade headwinds. Safe-haven demand supported the dollar and gold, with the metal holding above recent breakout levels. Technically, EUR/USD faces support at 1.1580 ahead of 1.1520, with resistance at 1.1680, while AUD/USD support sits at 0.6480 and resistance at 0.6560. Traders should expect elevated intraday volatility around sanctions headlines and any OPEC supply response.