Forex Today: Oil and Gold shining on Iran-US tensions, stocks suffer, as busy week kicks off

Yohay Elam FXStreet

Here is what you need to know on Monday, January 6:

Mid-East tensions: President Donald Trump threatened to hit Iran hard and disproportionately if it retaliates for the killing of Qassem Suleimani on Friday. Tehran announced it abandons any limits related to the nuclear deal. The Iraqi parliament has called on the exit of American troops from the country.

Gold prices have shot above $1,580 while oil prices remain bid, with WTI nearing $65. The US dollar is on the back foot against major pairs but gaining against commodity currencies.

Trade: China's delegation is set to land in the US on January 13 to sign the trade deal, according to the Chinese press.

Fed: John Williams, President of the New York branch of the Federal Reserve, said that low inflation is likely to stay for another five to ten years. Mario Draghi, former president of the European Central Bank, said that Europe is undergoing a process of "Japanification."

Data: Final services Purchasing Managers' Indexes in Europe are forecast to confirm moderate growth while the UK services PMI carries expectations for mild contraction.

A busy week awaits traders with a full buildup to the US Non-Farm Payrolls, euro-zone inflation figures, and more. Friday's US ISM Manufacturing PMI missed expectations with the worst score since 2009, adding to pressures.

Cryptocurrencies are gaining ground, with Bitcoin topping $7,500.

See US and Iran trade attacks in the Persian Gulf, markets fret about the future

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.