EUR/USD Quiet on Light Data; US-Iran Escalation Drives Risk Mood

The European session opens with a thin economic calendar, featuring only low-tier releases including German PPI and Eurozone Construction Output, neither of which is expected to materially shift ECB policy expectations. EUR/USD is likely to trade in a narrow range during European hours absent fresh catalysts from the data front. However, the dominant driver across forex markets remains the escalating US-Iran situation, with a US official confirming Washington is planning for a wider military conflict and the Pentagon increasing aircraft deployments to the Middle East. This geopolitical escalation is fueling safe-haven demand for JPY and CHF while pressuring risk-sensitive currencies such as AUD and NZD. Oil prices remain elevated on supply disruption fears, supporting CAD but adding inflationary concerns globally. Traders should exercise caution as headline risk is extreme — sudden developments could trigger sharp moves across major pairs. Key focus shifts to any new US-Iran statements that could either accelerate de-escalation or push markets deeper into risk-off positioning throughout the session.