A ceasefire is not a peace deal and hostilities between Iran and Israel are merely on simmer. Two countries with so much animosity against each other are not going to kiss and make up after twelve days of bombing, strafing, and killing.
The ceasefire between Israel and Iran announced today by U.S. President Donald J. Trump has me wondering if the United States decided to take one on the chin from Iran so that the Iranians could have something to brag about or claim a win that would cost the U.S. nada. For example, President Trump “thanked” the Iranians for providing early notice for an attack on Al Udeid Air Base in Qatar. This early warning apparently gave United States personnel enough time to prepare and thus avoid causalities.
Then there is the bombing by the United States of three of Iran’s nuclear facilities at Fordo, Natanz, and Isfahan. Israel’s attack on Iran is premised on preventing the existential threat that Iran’s nuclear facilities posed on the Israeli state. The U.S. claims that the mission, comprised of 125 military aircraft, was a success having inflicted “extremely severe damage and destruction” on the targets.
If it was Israel’s intent to deliver the same degree of destruction on Iran’s nuclear facilities, then the U.S. did Israel a solid.
What I found interesting was the calm in the markets before the attacks and after. A trading support target for the US dollar was around EUR/USD=1.1425 on the 19th of June as investors steeled themselves for a possible US intervention. That flight to the dollar was apparently interrupted and forced to do a U-turn as the EUR/USD moved from 1.1471 early this morning to 1.1599 as of 8:41 pm this evening. Investors, particularly those in Asia and Europe, are again turning their backs on the greenback.
Analysis by FXStreet shows potential floors for the EUR/USD at 1.1500, 1.1450, or 1.1400. On the flipside, potential ceilings for the EUR/USD are at 1.1600, 1.1650, and 1.1700. My back of the napkin analysis has a forward price for the EUR/USD on this Friday at 1.1758.
The world, at least in the very immediate term, is at some kind of pre-hostilities normal … some kind of.
My takeaway is that where Mr. Trump can offer two warring parties a couple doggy bones so that they go back into their respective corners, he may continue doing so. This tactic would depend on how much the US has to give. The cynic in me says that the “advanced warning” was likely negotiated and scripted so that Iran could tell its citizens that they got a good dig in on The Great Satan.
Meanwhile, Israel, who is still committing resources in Gaza, could scratch off a few existential threats from its bucket list.
For markets, this strategy brought some calm, but it is not sustainable. The US is resource strapped and if this type of strategy results in loss of American lives, a country already wary of involvement in a conflict far away from home will see its wrath amplified at the polls in 2026.
Alton Drew
23 June 2025
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DISCLAIMER: I am not a financial adviser. These blog posts are for educational purposes only. Trading of any kind involves risk. Your trading decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary.
LEGAL ANALYSIS: For an analysis of the legal or regulatory environment surrounding the events described in this post, contact me at altondrew@altondrew.com to set an appointment.
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