Geopolitical Tensions Rise As GOLD Reaches Multi-Year High

• 6 Jan 2020

USD/JPY

 

The USD/JPY pair has broken the 108.06 support level to the downside, as the dollar comes under pressure as a result of geopolitical events. This has represented a key support level in recent trading and therefore the break is significant. Fundamentals do not inform dollar weakness. Geopolitical factors will drive price action near-term. Momentum indicators are bearish with RSI approaching oversold conditions. 

 

    

 

 

 

EUR/USD

 

The Eurodollar is testing the 1.116 support line, despite significant selling activity taking the pair to test the 1.112 support level in recent trading. The 1.116 price line remains a level where sellers have tended to return to reverse bullish momentum for the pair. Momentum indicators have flattened in bullish territory. 

 

 

 

 
 GBP/USD

 

The GBP/USD pair has pulled back from the ascending trendline to break price levels and now test the 1.309 support level. The overall trend is bullish which may suggest that the recent bearish moves are nothing but a pullback in the trend. Momentum indicators have stalled in bullish territory.

 

 

 

USD/CHF

 

The USD/CHF sell-off has decelerated and there is some recovery in price action which has taken the pair back above the 0.968 support level. There is currently a lack of conviction from buyers with small-bodied candles indicating a lack of appetite. Momentum indicators have flattened in bearish territory.  

 

 

 

 

USD/CAD

 

The USD/CAD pair has paused the sell-off as a series of small-bodied candles indicate a break in price action. The move has taken the pair to a multi-year low, yet the question is whether the trend will continue. Momentum indicators have stalled in bearish conditions. 

 

 

 

SILVER

 

Silver has found support from buyers as a result of climbing geopolitical tensions. As a result, the metal is moving towards the 18.62 price level which is a longer-term resistance line. On previous occasions, the metal has failed to clear this price line. Momentum indicators are bullish, breaking overbought conditions.   

 

 

 

 

GOLD

 

Gold buyers have rushed back to the metal as tensions rise in the Middle East. Safe haven precious metal have seen rising buying activity as the U.S. dollar weakens. The result, is Gold reaching highs not seen in multiple years. Momentum indicators have moved beyond overbought conditions with rising bullish momentum.  

 

 

 

 

OIL

 

WTI price action has risen to a level not seen since May this year. Potential supply issues have attracted buyers to the commodity pushing price action through the $60 per barrel hurdle. Once again, geopolitical factors are most likely to determine near-term price action. Momentum indicators are bullish with RSI breaking overbought conditions.