The main beneficiaries of the armed conflict in the Middle East have been traditional and black gold. Bitcoin experienced wild fluctuations, while currencies are on alert, watching the unfolding events in the region after significant price gaps at the opening of the first week of spring. Traditional safe-haven assets were unable to gain substantial benefits from the US and Israeli strikes on Iran. This allows for speculation about a division of winners and losers based on the principle of oil producers and consumers.

Dynamics of G10 Currencies Against the US Dollar

The greenback appreciated against the currencies of oil-importing countries, including the Swedish krona, the British pound, and the euro. Meanwhile, the Norwegian krone and the Canadian dollar fared much better due to the 13% surge in Brent, the largest daily increase since 2022.

The fact that the market does not differentiate between winners and losers based on the principle of safe havens versus riskier assets is also indicated by the dynamics of US Treasury bonds. Rather than falling, their yields rose. This could be due to several reasons. Firstly, the United States is a net energy exporter, and the rally in Brent may be a positive for its economy. Secondly, rising oil prices will increase inflationary expectations and reduce the likelihood of a continued pause in the Federal Reserve's monetary expansion cycle. This prompts investors to sell Treasuries and buy US dollars.

US Dollar's Reaction to Events in the Middle East

The euro is under pressure from a 25% jump in gas prices. A significant portion of blue fuel is supplied to Europe through the Strait of Hormuz after the EU refused to buy it from Russia. According to Goldman Sachs, given the limited supplies, prices could double. This creates a sense of deja vu reminiscent of the energy crisis that occurred during Russia's invasion of Ukraine in 2022. At that time, the EUR/USD quotes fell significantly.

Investors prefer to use old templates, although they are not in a hurry. Each situation is unique, and currency pairs can react differently. You have to be careful not to make mistakes.

The further development of events will depend on the duration of the armed conflict. Iran is already ready for negotiations with the US, suggesting a quick resolution. On the other hand, Washington's demands for a change in leadership to a more compliant administration resemble an ultimatum that Tehran may not accept.

From a technical standpoint, the EUR/USD daily chart shows a gap at the market open. Quotes bounced off significant support at the pivot level of 1.1725; however, closing this gap will not be straightforward. As long as the euro trades below the lower boundary of the fair value range of $1.1755-$1.1900, it makes sense to hold and increase short positions initiated at $1.1835. Target levels are set at 1.1680 and 1.1640.