Risk Appetite Strengthens on Iran Talks (05.07.2026)

Global markets remained focused on the prospect of a diplomatic breakthrough between the United States and Iran, with easing geopolitical tensions continuing to pressure the dollar and support risk assets. The dollar index fell below 98, extending its recent decline as markets increasingly priced in the possibility of a US–Iran agreement. 

The euro stayed near a two-week high above 1.1750 as traders reduced expectations for aggressive Federal Reserve tightening ahead of key U.S. labor data. Precious metals held firm after strong rebounds fueled by lower oil prices and softer inflation fears, while the Japanese yen strengthened on intervention concerns and hawkish Bank of Japan signals. Sterling struggled to extend gains despite solid UK economic data, as investors positioned cautiously before the upcoming Nonfarm Payrolls release.

Euro Nears Two-Week High

The EUR/USD pair held above 1.1750, hovering near its two-week peak as optimism for a U.S.–Iran peace agreement weakened the dollar. Fading geopolitical risks and reduced expectations for aggressive Fed tightening have dampened safe-haven demand. Despite a minor dip following strong U.S. economic data, the pair recovered as market sentiment improved. Investors are now turning their focus to Friday’s Nonfarm Payrolls report and upcoming macro data for the next clear directional signal.

For EUR/USD, the initial resistance is seen at 1.1760, while the closest support is positioned at 1.1660.

Gold Steady Near $4,700

Gold remained near $4,700 following a 3% surge, as prospects for a U.S.–Iran deal dragged oil prices down and softened inflation fears. Washington reportedly used Pakistani mediators to deliver a draft memorandum aimed at ending hostilities and reopening the Strait of Hormuz. While cheaper energy reduced the perceived need for restrictive monetary policy, supporting market sentiment, Chicago Fed President Austan Goolsbee noted that war-driven inflation remains high. This persistent price pressure continues to provide underlying support for the metal.

First resistance is seen at $4720, with initial support near $4675.

Yen Gains as Intervention Fears Persist

USD/JPY dropped below 156.50 as investors evaluated potential peace developments between the U.S. and Iran. The yen found support from lingering caution that Tokyo might intervene again, particularly after the pair recently surpassed the 160 mark. Additionally, hawkish rhetoric from the Bank of Japan regarding potential rate increases to combat persistent inflation has further constrained the pair's upward movement, keeping traders alert to a shift in policy.

Initial resistance stands at 156.50, while the first support is located at 155.20.

Pound Struggles Despite Strong PMI

GBP/USD found it difficult to hold above 1.3600 even after UK Services PMI beat expectations at 52.7. Investor attention is now locked on Friday’s U.S. Nonfarm Payrolls. With job growth projected to plunge to 60K from 178K, this report could spark significant dollar volatility and dictate the pair's next move.

From a technical view, resistance stands near 1.3610, with support around 1.3520.

Silver Stabilizes on Peace Hopes

Silver held above $77 following a sharp 6% jump, as potential for a U.S.–Iran breakthrough pulled oil prices down and eased inflation fears. Washington has reportedly used Pakistani mediators to propose a framework for ending the conflict and reopening the Strait of Hormuz. While the market awaits Tehran’s response and further nuclear negotiations, the drop in energy costs has reduced the pressure on central banks to keep interest rates elevated, providing significant support to silver's recent recovery.

From a technical view, resistance stands near $78.70 while support is located around $73.80.