Market Analysis Summary: Middle East Tensions Escalate; ECB Decision in Focus
Author: Martin Lam
Date: July 23, 2026
Key Takeaways
- U.S.–Iran hostilities have intensified, with President Trump threatening strikes on Iranian infrastructure and Iran-backed Houthi rebels threatening shipping routes.
- These geopolitical tensions have led to increased oil prices and a rebound in gold prices due to technical buying.
- The European Central Bank (ECB) is expected to keep interest rates unchanged, with a focus on how they address inflation uncertainties in light of rising energy prices.
- President Lagarde's press conference will be closely monitored for hints regarding future monetary policy decisions.
Global Market Review
U.S. equities closed lower as traders awaited earnings reports from major tech firms while considering the risks associated with the escalating conflict in the Middle East. The Dow Jones fell by 0.01%, the S&P 500 by 0.14%, and the Nasdaq by 0.57%. Gold prices reached two-week highs, closing up 1.3%, supported by a weaker dollar and technical buying, despite Treasury yields remaining near multi-month highs. Oil prices settled at their highest since June 11 due to the ongoing U.S.–Iran tensions.
Key Events Today
- 09:30 AU Unemployment Rate (June)
- 20:15 ECB Interest Rate Decision
- 20:30 US Initial Jobless Claims
- 20:45 ECB Press Conference
Market Analysis
EUR/USD
Resistance: 1.1437 / 1.1454 | Support: 1.1394 / 1.1380
The EUR/USD pair consolidated above 1.1400, ending a four-day losing streak, but was capped by Middle East tensions ahead of the ECB decision. A hawkish hint from the ECB could push the pair above key resistance levels.
GBP/USD
Resistance: 1.3460 / 1.3510 | Support: 1.3349 / 1.3300
The GBP/USD traded below 1.3400 after softer-than-expected UK CPI data. A rebound above 1.3400 requires support to hold; otherwise, a decline towards 1.3350 is possible.
USD/JPY
Resistance: 163.39 / 163.75 | Support: 162.84 / 162.49
The USD/JPY rebounded from 40-year lows as traders considered potential interventions by the Bank of Japan. The pair remains above 163, with bulls probing higher levels.
Crude Oil Futures
Resistance: 89.22 / 90.50 | Support: 86.29 / 84.99
Oil prices extended gains, closing at their highest since June 11 due to mounting supply risks. If conflict headlines persist, the next target could be $90.
Spot Gold
Resistance: 4167 / 4203 | Support: 4110 / 4080
Gold prices rose for the fourth consecutive day, driven by geopolitical uncertainty and safe-haven demand, approaching July highs near $4,200.
Dow Jones Futures
Resistance: 52,831 / 53,070 | Support: 52,068 / 51,833
U.S. equities slipped due to Middle East tensions and global growth concerns, likely remaining range-bound at lower levels.
NASDAQ 100
Resistance: 29,236 / 29,429 | Support: 28,848 / 28,608
Tech stocks showed mixed performance, with some companies rising while others faced declines. The Nasdaq failed to extend gains, capped below key moving averages.
Bitcoin (BTC/USD)
Resistance: 67,426 / 68,602 | Support: 65,576 / 64,416
Bitcoin edged lower, stabilizing near five-week highs as focus shifted to regulatory debates and ongoing geopolitical tensions.
Conclusion
The market remains sensitive to geopolitical developments, particularly in the Middle East, which are influencing commodity prices and currency movements. The upcoming ECB decision will be pivotal in shaping market sentiment.