The market was significantly impacted by the news of the Malaysia Airline plane that was shot down in East Ukraine last Thursday. The White House tied Pro-Russia separatists with this accident on Friday with Russia responding that the Ukraine government should take the full responsibility. Although, the West and Russia are still arguing who should be blamed for this tragedy, the market has digested the news and the surging price of safe-haven assets like Gold retreated on Friday.
In other news, conflicts continued in Gaza with more civilians being killed, as the Israeli army expanded its ground operation. This event may not largely affect the market now but things will change if the tension in Middle East escalates.
Gold prices fell from the $1320 resistance level on Friday. This level is also the 38.2% retracement level of the slump in the first two trading days of last week. Gold prices are still under pressure in mid-term, as the Fed will probably quit their QE program this October with more affirming signs of a U.S. economic recovery. Those items will most likely strengthen the Dollar over the next few months.
Similarly, Dollar Yen rebounded again from support levels near 101.20. The triangle consolidation is near the breakout.
The Sterling fell to 1.7035 against the Dollar during the European trading session, but rebounded shortly from this level finally closing at 1.7082 – just above the 20-day MA.
Most Asian markets performed weakly on Friday. The Nikkei Stock Average suffered from a stronger Yen, losing 1.01%. The Shanghai Composite closed 0.17% higher to 2059. The Australian ASX 200 rose 0.17% at 5532. In European stock markets, the FTSE closed 0.17% higher, the DAX lost 0.35%, and the CAC was up 0.44%. U.S. stocks closed higher on Friday as the fear of geopolitics woes faded and the Dow Jones Industrial Average and S&P 500 closed on a record high. The Dows gained 0.73% to 17100. The S&P 500 edged 1.03% higher to 1978, while the Nasdaq Composite Index surged 1.57% to 4432.
No big data releases for today, but this week, we will see the BOE’s interest rate decision on Wednesday and New Zealand’s one on Thursday. Also UK’s Q2 GDP will the impact sterling and PMI data from China, Eurozone and U.S. shoud be watched closely.