Tensions Return to Center Stage (05.05.2026)

Global markets are navigating a renewed wave of geopolitical risk as tensions in the Strait of Hormuz intensify. 

The euro remains relatively stable near $1.17, supported by expectations of an upcoming ECB rate hike, even as rising oil prices and tariff concerns weigh on sentiment. Meanwhile, gold is attempting to stabilize after recent losses, while the yen weakens under safe-haven dollar demand. Sterling holds firm ahead of key UK political developments, and silver remains under pressure as inflation fears and energy-driven volatility continue to shape investor positioning across asset classes.

Euro Stabilizes Amid Rising Tensions

The euro traded near $1.17 in early May as investors assessed fresh US tariffs and growing signs of a June ECB rate hike. Geopolitical risks intensified after reports of an Iranian strike on a US warship in the Strait of Hormuz, sending oil prices to four-year peaks. These developments follow Tehran's warning that American involvement in the region would violate the existing ceasefire, fueling widespread market concern.

For EUR/USD, the initial resistance is seen at 1.1760, while the closest support is positioned at 1.1640.

Gold Steadies Near $4,500 After Slide

Gold stabilized near $4,500 on Tuesday after a nearly 2% decline in the previous session. Heightened Middle East tensions have driven energy costs upward, intensifying global inflation fears. Market volatility follows reports that U.S. forces repelled Iranian attacks while escorting vessels through the Strait of Hormuz. Additionally, the UAE confirmed intercepting cruise missiles and attributed a major fire at the Fujairah port to an Iranian drone strike, keeping geopolitical risks elevated.

First resistance is seen at $4650, with initial support near $4500.

Yen Slides on Safe-Haven Dollar Demand

The Japanese yen weakened past 157 per dollar this Tuesday, reversing recent gains. This slide follows a strengthening USD, fueled by safe-haven demand as escalating Middle East tensions threaten the fragile four-week ceasefire between Washington and Tehran.

Initial resistance stands at 157.90, while the first support is located at 156.80.

Sterling Steady Ahead of UK Elections

The British pound traded just below $1.36, maintaining its recent momentum near two-month highs. Investors are currently focused on Thursday’s municipal elections, where polling suggests Keir Starmer’s Labour Party may face significant setbacks. Oil prices continued to climb following reports of Iranian missiles striking a U.S. warship in the Strait of Hormuz, further escalating regional geopolitical instability and market uncertainty.

From a technical view, resistance stands near 1.3630, with support around 1.3540.

Silver Under Pressure Near $73

Silver remained below $73 this Tuesday, struggling after a nearly 2% drop in the prior session. Rising Middle East tensions have driven energy costs upward, intensifying inflation fears and dampening demand for the metal as market participants weigh the impact of higher prices.

From a technical view, resistance stands near $73.80 while support is located around $71.50.