Tensions around the US – Iran – Iraq continue to grow and this is a major topic in the markets. As a result, we observe risk avoidance early in the week.
Gold is the best performing asset, with price action signaling a stop on its way up, rising above the 2019 peak. Oil is also holding back profits, with Brent at over $ 70 a barrel.
In terms of currencies, there is more to be desired when it comes to liquidity, but USD / JPY threatens to make a strong break below 108. The rest of the markets remain relatively quiet without much movement and excitement.
Looking ahead, there are no major economic reports during the European session (as well as the US) that divert the attention of traders. In such a situation, market participants will remain cautious in the first place, which does not bode well for the major stock indices. I expect a negative start in Europe, followed by the same in the USA. Today, the main catalyst will remain the actions of the United States and Iran – Iraq, and any verbal (as well as physical) skirmish between the countries can have huge consequences for the weekly trend in the stock markets.
Trader Aleksandar Kumanov