Both articles report that Washington and Tehran have agreed to halt attacks against each other ahead of scheduled peace talks in Qatar on Tuesday, following a period of heightened tensions and retaliatory strikes that began when an Iranian projectile hit a cargo vessel on Thursday [1][2]. Despite this diplomatic window, traders remain cautious due to ongoing uncertainty and fluid headlines from the Middle East, with both sides accusing each other of violating the June 17 interim ceasefire [2].
In the currency markets, the EUR/JPY cross trades near 184.20 in positive territory, but its upside appears limited as traders are wary of the fragile US-Iran ceasefire and the potential for renewed volatility [1]. The risk-sensitive Euro faces additional pressure from fears of possible Japanese market intervention, as Japan’s Chief Cabinet Secretary Minoru Kihara stated last week that officials would take appropriate action against foreign exchange moves if needed [1]. Technical analysis shows EUR/JPY maintains a bearish near-term bias, trading below the 100-day moving average and with the Relative Strength Index at 42.65, indicating fading bullish momentum. Key support is identified at 183.55, while resistance lies at 184.55 and 184.95 [1].
Meanwhile, the New Zealand Dollar (NZD) remains in positive territory after paring recent losses, trading around 0.5640 during Asian hours on Monday [2]. The subdued US Dollar, attributed to easing safe-haven demand following the US-Iran ceasefire, has supported the NZD, though traders remain cautious given the uncertain regional stability [2]. Persistent hawkish expectations for the Federal Reserve are providing some cushion for the US Dollar, with the CME FedWatch Tool indicating a 59.7% probability of a rate hike by September 2026. Upcoming US labor market data, including Thursday’s Nonfarm Payrolls, are expected to influence the Fed’s rate trajectory, with forecasters anticipating June job growth of 114,000 and an unemployment rate of 4.3% [2].
The NZD faces headwinds from a weakening domestic growth outlook and subdued consumer and business confidence, with markets now pricing in two Reserve Bank of New Zealand rate hikes this year instead of three [2]. The recent US-Iran deal has also led to lower oil prices and eased near-term inflation fears, but the broader economic impact of the earlier energy shock persists [2].
The European Central Bank’s annual forum, opening Monday with remarks from President Christine Lagarde, is also in focus. Any hawkish commentary from ECB policymakers could help limit EUR losses in the near term, especially as traders monitor central bank policy shifts amid ongoing market volatility [1].
CONCLUSION
The agreement between the US and Iran to halt attacks ahead of peace talks has provided some relief to risk-sensitive currencies, but ongoing geopolitical uncertainty continues to weigh on market sentiment. Both the EUR/JPY and NZD/USD pairs reflect cautious optimism, tempered by technical resistance, central bank policy expectations, and lingering concerns over regional stability and domestic economic outlooks. Market participants remain attentive to upcoming central bank forums and key economic data releases for further direction.