Peter Bukov
Axiory Global Ltd.
Traders bought safe haven' assets such as gold and the yen on Tuesday as the conflict between USA and Iran seems to be worsening. The USDJPY pair was down 0.30% during the London session, dropping below the 107 mark, before erasing some of the losses and stabilizing around this level.
On Monday, President Donald Trump unveiled sanctions on Ayatollah Ali Khamenei and eight senior military commanders, which led to some de-risking on the financial markets.
During the overnight session, the Iranian Foreign Ministry’s spokesman, Abbas Mousavi, was quoted, saying "the futile sanctions against the Iranian leader and the country’s chief diplomat mean the permanent closure of the diplomatic path with the government of the United States."
Sentiment soured afterward and traders sold stocks and bought bonds and the yen, which brought the USDJPY pair below 107, levels last seen during the flash-crash on January 3, or during normal trading in April 2018.
Later in the day, US new home sales for May will be released, but these numbers rarely cause any larger market movements.
However, market participants will pay attention to Jerome Powell's speech, who is due to speak about the economic outlook and monetary policy at the Council on Foreign Relations in New York.
His speech is expected to sound dovish and Powell could confirm expectations of a rate cut in July.
Having declined below the 108 zone, the pair effectively confirmed the bearish scenario and it continued to drop ever since. The next support seems to be near today's lows of 106.80 and if hot held (for example after today's Powell), bears could target the 106 handle.
Alternatively, the intraday resistance seems to be near 107.40 and afterward at 107.90/108.00 The greenback needs to stay below 108 to remain in a downtrend.
Trading FX/CFDs on margin bears a high level of risk, and may not be suitable for all investors. Before deciding to trade FX/CFDs you should carefully consider your investment objectives, level of experience, and risk appetite. You can sustain significant loss.
Recommended Content
Editors’ Picks
EUR/USD clings to gains near 1.0700, awaits key US data
EUR/USD clings to gains near the 1.0700 level in early Europe on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter GDP data.