U.S.-Iran Conflict and Brexit to Dictate Forex

Updated 10:57AM 08/01/2020


NZD and SEK are the top G10 FX gainers today, up 0.32% and 0.19% vs the dollar while CHF and EUR are the top losers, down -0.11% and -0.09% vs the dollar.
Currencies see-saw continued with the JPY and CHF jumping initially after Iran fired missiles at the U.S. forces in Iraq. The safe-haven currencies retreated after no immediate reports of casualties steadied sentiments.
British Pound also jumped on news of Iran's attack on U.S. forces but the focus is likely to remain on the Brexit vote which is expected to pass by Monday. If so we will see Britain Exit from the EU by 31st January.
In the Asian equities space, the Nikkei 225 closed -1.57% lower at 23,204.76, Hang Seng closed -0.83% at 28087.92 and Kospi ended -1.11% at 2151.31. The European equities were trading weaker with the FTSE down -0.38% at 7545.17, DAX down -0.69% at 13135.99, and CAC down -0.51% at 5981.6. In the rates market, global yields were trading weaker; the US 10-year yield was trading at 1.7968% and the Bund 10-year yield trading at -0.285%. In the energy space, the Brent (front month) is trading up (0.6%) for the day at $68.68.

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Forex Chart and Technical Analysis

EURUSD Chart (Two-week)

Strategy: Support at 1.1100 for 1.1200
Short-term view: EUR/USD support at 1.1100, MACD and RSI are flat. Hence, we see a move to 1.1200. Below 1.1100 to open 1.1068.

GBPUSD Chart (Two-week)

Strategy: Resistance at 1.3222, for 1.3050
Short-term view: GBP/USD resistance at 1.3222, MACD and RSI are weak. Hence, we expect a dip to 1.3050. Above 1.3222 to open 1.3296.

USDJPY Chart (Two-week)

Strategy: Resistance at 108.81 for 107.64
Short-term view: USD/JPY resistance at 108.81, RSI and MACD are weak. A move lower to 108.01, probably 107.64 is likely. Above 108.81 to open 109.47

AUDUSD Chart (Two-week)

Strategy: Support at 0.6862 for 0.6950
Short-term view: AUD/USD MACD and RSI are bottoming out and support at 0.6862. A move towards 0.6950 is likely. Below 0.6862 to open 0.6836.

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