Market in position. Economists at Commerzbank analyze how issues in the Middle East are moving currencies.
Waiting for the ground offensive
Not just the ground forces of the Israeli army seem to be in position, the market is too. Little is happening in the Dollar as the market is waiting for whether and if so when the offensive will start (probably not while US President Joe Biden is in Israel).
Monetary policy considerations for Fed and ECB are likely to be of secondary importance for now.
The risks in EUR/USD should continue to point downwards if the conflict were to increase in strength or escalate.
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