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ForexMediumUpdated×11•Originally published 6 May 2026•Updated 8 May 2026•

1 min read

Oil Prices Plunge and Dollar Weakens on Hopes of US-Iran De-escalation

Key Facts

1Oil prices plunged more than 10% amid optimism regarding a deal to end the blockade in the Strait of Hormuz.

2Stagflation worries receded, leading investors to pile into European stocks and foreign currencies while selling the US dollar.

Crude oil prices fell for the third consecutive day, dropping 8% as Washington and Tehran evaluate a potential agreement to end the Strait of Hormuz blockade. In the currency market, USD/JPY rebounded from its lows with analysts identifying specific technical support levels at 155.00 and 156.45. Meanwhile, downside risks have emerged for EUR/USD should it fall below the 1.1700 threshold, as gold prices (XAUUSD) remain stable. Markets are now shifting focus to the upcoming U.S. Non-Farm Payrolls (NFP) data, with a forecast of 180k jobs expected to drive near-term volatility. Traders continue to monitor Iran's official diplomatic response to gauge the sustainability of the current downward trend in energy prices.

27 days ago

Version History

2 additional sources confirmed this story

Version 1127 days ago

What changed: Added technical support levels for USD/JPY, downside risks for EUR/USD, and included the NFP forecast figure.

Version 1027 days ago

What changed: Updated the story to reflect the USD/JPY rebound as geopolitical optimism fades and markets shift focus to upcoming U.S. NFP data.

Version 927 days ago

What changed: Added technical analysis perspective regarding price consolidation and a developing triangle pattern on oil charts.

Version 827 days ago

What changed: Updated the story to include USD/JPY holding above key technical support levels despite the selling pressure from BoJ intervention speculation.

Version 728 days ago

What changed: The update confirms the oil price decline has extended to a third day and notes that markets are now awaiting Iran's official response.

Version 628 days ago

What changed: Updated oil price decline to 8% and specified that Washington and Tehran are currently studying a potential agreement.

Version 528 days ago

What changed: The story was updated to confirm that the USD/JPY decline is specifically linked to increased speculation of active Bank of Japan intervention alongside geopolitical shifts.

Version 428 days ago

What changed: Added Islamabad as the negotiation location and the next-week timeline, while noting the rally in gold prices.

Version 328 days ago

What changed: The story was updated to confirm that the Bank of Japan took actual market intervention measures to support the Yen, moving beyond previous speculation.

Version 229 days ago

What changed: The story was updated to include the rapid decline of over 1.00% in the USD/JPY pair and renewed speculation regarding official FX intervention to support the yen.

Version 129 days ago

What changed: Added analysis of the USD/CAD pair's stability due to the balance between a weaker USD and falling oil prices.