U.S.-Iran “Mini War” Escalates, Focus Turns to the Strait of Hormuz and RBA Decision

ATFX Market Outlook – 5th May 2026  

U.S.-Iran “Mini War” Escalates, Focus Turns to the Strait of Hormuz and RBA Decision

(By ATFX Analyst Team)

Summary

·       U.S.-Iran tensions escalated after Trump described the conflict as a “mini war” and warned of a strong response if Iran attacked U.S. vessels. Iran also claimed control of the Strait of Hormuz, raising concerns over Gulf shipping and energy supply risks.

·       Today’s Focus: The RBA will announce its rate decision, with markets expecting a hike from 4.10% to 4.35%. A hawkish statement or press conference could support the Australian dollar. In the U.S. session, trade balance, final Services and Composite PMI, new home sales, and ISM Services PMI will be watched. Weaker data may pressure the dollar and U.S. stocks, while stable services data could have a limited impact.

Global Market Review

U.S. stocks fell on Monday, with the S&P 500 down 0.39%, the Nasdaq down 0.17%, and the Dow Jones down 1.12%, as escalating tensions in the Middle East shifted market sentiment away from strong earnings optimism toward risk aversion. The U.S. Dollar Index rose 0.2% to 98.404, supported by weaker risk appetite, while the euro and sterling edged lower. The yen briefly rebounded sharply amid renewed speculation over possible Japanese intervention. Gold fell around 2%, with spot gold trading near $4,523 and touching an intraday low of $4,500.94, as the surge in oil prices revived inflation concerns and reduced expectations for rate cuts. Oil prices rallied strongly, with Brent crude up 5.8% to $114.44 and WTI crude up 4.4% to $106.42, as supply risks around the Strait of Hormuz remained the key driver behind elevated prices.

Key Events Today:

China, Japan Holiday

07:00 AU Services & Composite PMI Final APR **

12:30 RBA Interest Rate Decision *** 

13:30 RBA Press Conference ***

20:30 US Balance of Trade MAR ** 

21:45 US Services & Composite PMI Final APR **

22:00 US New Home Sales MAR **

22:00 US ISM Services PMI APR **

Tomorrow:

04:30 US API Weekly Crude Oil Stock *** 

09:45 CN Services & Composite PMI APR **

15:55 EU GERMANY Services & Composite PMI Final APR **

16:00 EU Services & Composite PMI Final APR **

16:30 GB Services & Composite PMI Final APR **

17:00 EU PPI MoM MAR **

20:15 US ADP Employment Change APR *** 

22:30 EIA Weekly Crude Oil Stock **

EURUSD

Resistance: 1.1746/1.1771Support: 1.1620/1.1595

EURUSD fell to 1.1694 as tensions in the Middle East boosted safe-haven demand for the dollar. Rising oil prices revived inflation concerns, while Fed rate-cut expectations weakened further, keeping the euro under pressure.

Analyst View: EURUSD’s rejection from the resistance zone shows that sellers are still defending the upper range. With geopolitical risk supporting the dollar and inflation concerns limiting expectations for Fed easing, the pair may remain vulnerable unless buyers reclaim 1.1746.

Bias: Bearish below 1.1746.

GBPUSD

Resistance: 1.3578/1.3609Support: 1.3479/1.3448

GBPUSD fell to 1.3536 as the stronger dollar weighed on sterling. Middle East escalation, higher oil prices and fading Fed rate-cut expectations kept the pair under pressure.

Analyst View: GBPUSD is losing upside traction after failing to hold near the upper range. The pair still has room to stabilize above 1.3479, but as long as dollar demand remains defensive, rebounds may struggle to hold above 1.3578–1.3609.

Bias: Neutral to slightly bearish below 1.3578.

USDJPY

Resistance: 158.05/158.42Support: 156.38/156.02

USD/JPY remained volatile as the yen briefly strengthened to 155.69 amid renewed speculation of intervention. However, high oil prices and Japan’s energy-import exposure may limit the yen's sustained strength.

Analyst View: USDJPY remains trapped between intervention risk and Japan’s energy-related yen weakness. The sharp drop shows that authorities can still pressure the pair, but the rebound above 156.02 suggests sellers may need stronger policy signals to extend the downside.

Bias: Neutral above 156.02.

US Crude Oil Futures (JUN)

Resistance: 108.71/111.90Support: 101.70/98.62

WTI jumped 4.4% to $106.42 as Iran attacked ships and UAE oil infrastructure near Hormuz. Supply disruption risk remains the dominant driver, keeping oil bulls firmly supported.

Analyst View: WTI remains strongly supported by geopolitical risk, but the rally is no longer a fresh breakout. Price is consolidating between $108.71 and $111.90, meaning buyers may need another supply-disruption headline to push oil into the next higher range.

Bias: Bullish above $101.70.

Spot Gold (XAU/USD)

Resistance: 4578/4609Support: 4481/4451

Spot Silver

Resistance: 74.86/76.42Support: 69.78/68.24

Gold fell 2% to around $4,521 after touching $4,500.94. Middle East escalation lifted the dollar and inflation concerns, reducing rate-cut expectations and pressuring non-yielding gold.

Analyst View: Gold remains under clear selling pressure as the market focuses more on inflation and higher-rate risks than safe-haven demand. The rebound from near $4,500 remains fragile, and sellers may remain active unless the price recovers above $4,578–$4,609.

Bias: Bearish below $4,578.

Dow Jones Futures  

Resistance: 49815/50365Support: 48003/47444

The Dow fell 1.12% to 48,946.86 as Middle East risk hit sentiment. Energy stocks gained, but broader risk appetite weakened as investors questioned whether strong earnings can offset geopolitical and inflation risks.

Analyst View: The Dow is losing traction after rejection below the 49,815–50,365 resistance zone. Unlike the tech-heavy NAS100, the Dow looks more exposed to broader market weakness, especially as inflation concerns and geopolitical uncertainty weigh on cyclical sentiment.

Bias: Neutral to bearish below 49,815.

NASDAQ 100

Resistance: 28216/28607Support: 26948/26550

The NAS100 fell 0.17% to 25,070.67 as geopolitical concerns cooled risk appetite. Strong earnings still provide support, but higher oil prices and inflation risks may be further upside.

Analyst View: NAS100 is still holding a stronger bullish structure than the Dow, but momentum is slowing near higher levels. If price stays above 26,550–26,948, buyers remain in control, though geopolitical risk may delay another push toward 28,216–28,607.

Bias: Bullish above 26,550.

Bitcoin (BTC/USD)

Resistance: 81259 /81780

Support: 78820/78290

Bitcoin rose above $80,000 to a three-month high near $80,277, supported by progress on the U.S. CLARITY Act and strong ETF inflows. However, soft spot demand and renewed tensions in the Middle East may limit follow-through momentum.

Analyst View: Bitcoin’s breakout above $80,000 has improved market confidence, but the move is approaching a heavier resistance band at $81,259–$81,780. If ETF inflows remain strong, buyers may attempt another push higher; otherwise, weak spot demand could trigger consolidation back toward support.

Bias: Bullish above $78,820.

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