US Iran War Market Analysis

Since the begining of 2026, the US Dollar has been on the weak side, while the Swiss Franc had been the go-to currency for safe haven investors. A look at the US Dollar index chart from January 2026 till date will show you that with the start of the US/Iran conflict, the US Dollar has started gaining strength.

What are the reasons for the sudden dollar appreciation?

1. The Swiss National Bank has said they will intervene to ensure their Swiss Franc currency doesnt become too strong due to the US/Iran conflict. A look at the EUR/CHF chart confirms that the Swiss Franc appreciated against the Euro with the EUR/CHF exchange rate dropping to 0.9037 which is a 10 year record low

2. Another reason for the USD appreciation is the "petrodollar trade". Since the US/Iran war started over the weekend, Iran has attacked oil facilities in neigbourig Gulf states causing some refineries to shut down. Iran has also attacked vessels sailing through gulf waters thus slowing the shipping of crude oil. All of this has caused the price of oil to rise and because most oil trades are settled in USD, there is now a higher demand for USD causing the dollar to appreciate.

Will higher oil prices not lead to higher inflation in the U.S.?

Economist fear that higher oil prices will lead to an increase in the pump price of gasoline which has a spillover effect into other aspects of the economy. The U.S. Federal Reserve knows this, and could hold off any further interest rate cuts till the US/Iran situation is resolved. This means that the USD will become stronger and more attractive if interest rates are not cut. Another win fo the USD.

The US–Iran war has influenced the forex market in several interconnected ways:

1.Increased safe-haven demand for the US Dollar as geopolitical risk rises.

2.Higher oil prices due to supply disruption fears, which indirectly support the USD because of the US’s relative energy position.

3.Weakness in risk-sensitive currencies as investors move funds into safe assets.

4.Short-term volatility, with longer-term effects depending on how the conflict evolves.

Now i see why USD has been bullish despite the fact that technical analysis is showing bearish.

i took a buy on AUDUSD but this post is making me doubt the buy will hold.

FUNDAMENTAL(NEWS)

Right now, the AUD/USD pair has been under downward pressure, mainly because of rising risk-off sentiment in global markets:

AUD/USD recently dropped as risk aversion picked up due to the US–Iran conflict, sending traders toward safer assets like the US Dollar.

Renewed geopolitical tensions and strong US economic data strengthened the dollar, weighing on the Australian dollar.

In simple terms, when investors get nervous about a war or global risk event, they tend to sell riskier or “cyclical” currencies like the Aussie and buy safe-haven currencies like the US Dollar. That causes AUD/USD to fall.

ALL USD RELATED PAIRS LIKE EURUSD,GBPUSD , AUDUSD ARE DUMPING MASSIVELY. US DOLLAR IS BECOMING MORE STRONGER.

The Audusd buy trade I took actually ended in a loss. Fundamentals playing out big time.

Market history is being created, traders will remember this event and refer to it in future. This event will be taught in fundamental analysis classes. Imagine students being asked this question: US strikes Iran will USD rise or fall? Well we now know the answer.

Haha, yes sir🤣

But earlier this year when the US attacked Iranian nuclear sites we didnt see the dollar strengthen or did we?

It wasnt this year. Trump ordered the US military to strike Iranian nuclear targets in 2025 and this was the eurusd market reaction for the next week. The strike happened on a Sunday so the markets began reacting from Monday. The us dollar actually got weak as a result which is the opposite of what is happening now.

Yes, but in the 2025 case there was not a major disruption to oil production. This time around we see refinderies being targeted forcing them to shut production.

During the tariff wars the US Dollar couldnt function as a safe-haven currency because the tariffs were coming from the USA itself. The US was the source of the problem, but in this case Iran is the one destabilizing the region so investors see the USD as safe haven

@sandy and the US is far away from the war theatre making most of the attacks to be around europe and the middle east

On the daily timeframe, EUR/USD is trading below the 200 day Simple Moving Average showing major bearishness. The last time this happened was in March 2025

IS THIS CONFIRMING THAT EURUSD IS BEARISH?

There are dark pool buy orders being executed at 1.1750 so we may see an upward push today but technically it is supposed to be bearish but sometimes it takes more than technicals to move the market.

Alright

Guys please how does all of this (US/Iran conflict) affect the Japanese Yen?