Markets Try to Regain Stability Amid US-Iran Conflicts (06.10.2026)

Markets turned their attention to the European Central Bank on Wednesday as the euro recovered modestly from recent lows. 

Expectations for a 25-basis-point ECB rate hike remained firmly in place amid persistent inflation and elevated energy costs. Meanwhile, renewed U.S.–Iran tensions pushed oil prices higher, reinforcing inflation concerns and keeping pressure on precious metals. The yen remained near multi-month lows despite rising Japanese inflation, while sterling rebounded as hopes for Middle East de-escalation improved market sentiment.

Euro Edges Higher Ahead of ECB

The Euro staged a modest recovery to around $1.154, bouncing from a two-month low as cooling Middle East tensions improved market sentiment. Investor focus has firmly shifted to the upcoming European Central Bank meeting, where sticky inflation and high energy costs are expected to drive a 25-basis-point rate hike. Traders are now awaiting clues from President Christine Lagarde regarding future policy, given that the immediate tightening is already fully priced in.

For EUR/USD, the initial resistance is seen at 1.1570, while the closest support is positioned at 1.1510.

Gold Slides Below $4,200

Gold dropped below $4,200 per ounce on Wednesday, striking its lowest level since late March. Escalating U.S.–Iran frictions, amplified by American military action following reports of a downed helicopter, have disrupted ceasefire hopes and pushed crude oil prices higher. These compounding energy shocks have intensified inflation anxieties. With strong U.S. labor indicators, the macroeconomic backdrop has solidified expectations for tighter Federal Reserve monetary policy, severely weighing on the non-yielding asset ahead of key inflation data.

First resistance is seen at $4240, with initial support near $4140.

Yen Stagnates Near Multi-Month Lows

The Japanese Yen hovered around 160.3 per Dollar, hovering near its weakest level in over a year despite surging wholesale inflation. May producer prices jumped 6.1%, beating forecasts due to elevated energy costs. The hot data reinforced market bets that the Bank of Japan will hike interest rates soon, with further monetary tightening expected later this year.

Initial resistance stands at 160.90, while the first support is located at 159.40.

Sterling Recovers Toward $1.34

The British Pound climbed toward $1.34, rebounding from three-week lows as Israel and Iran agreed to de-escalate hostilities following diplomatic pressure from U.S. President Donald Trump. While earlier geopolitical friction drove oil prices and inflation expectations higher, markets are now pricing in a September Bank of England rate hike. However, internal central bank debate persists over whether current monetary policy is already sufficiently restrictive.

From a technical view, resistance stands near 1.3410, with support around 1.3320.

Silver Drops Toward $64

Silver dropped toward $64 an ounce on Wednesday, touching its lowest level since late March. Renewed U.S. military strikes on Iran, sparked by a downed American helicopter, heightened Middle East instability and complicated ceasefire prospects. This escalation pushed crude oil higher, worsening inflation fears. Also, rising energy costs and expectations of a more hawkish Federal Reserve continue to pressure precious metals ahead of crucial U.S. inflation and employment data.

From a technical view, resistance stands near $66.20, while support is located around $63.20.