Crude oil and gold rise as Iran attacks American base
Oil and safe haven assets jumped as tensions between Iran and the United States escalated. Iran retaliated against the Suleimani killing by firing ballistic missiles against two military bases in Iraq. The number of casualties is not yet known. This marked the most significant attack by Iran against the United States. In a tweet, the Iranian Foreign Minister said that the country was not looking to start a war. Meanwhile, Trump will address the country in the morning today. In response to these attacks, the price of gold, crude oil, and Japanese yen rose sharply.
The US dollar was relatively unchanged after the ISM released the non-manufacturing PMI data. Data showed that the non-manufacturing sector PMI rose from 53.9 in November to 55.0. The non-manufacturing business activity rose from 51.6 to 57.2. Meanwhile, the November factory orders declined by -0.7%. This was slightly better than the expected decline of -0.8% and the previous increase of 0.2%. Later today, the market will receive the nonfarm employment change data from ADP. The market expects the data to show that the economy created more than 160k jobs. While this number is usually watched closely, it tends to deviate significantly from the official employment numbers.
Later today, the market will receive the German factory orders for November. These orders are expected to have risen by 0.2% after falling by -0.4% in October. In the UK, the market will receive the Halifax house price index for December. Economists polled by Reuters expect the index to have risen by an annualised rate of 1.5%. Traders will also receive business and consumer confidence data. Meanwhile, the EIA will release the crude oil inventories data. Last week, data showed that inventories declined by more than 11.4 million barrels.
The EUR/USD pair was little changed during the Asian session. The pair is trading at 1.1155, which is slightly above yesterday’s low of 1.1133. The price is between the middle line of the Bollinger Bands while the RSI has moved from a low of 25 to the current level of 45. The pair will likely move lower to retest yesterday’s low of 1.1133.
The XBR/USD pair rose to a high of 70.65 after the latest Iranian attack on an American base in Iraq. The price then declined and is currently trading at 68.60. This price is along the middle line of the Bollinger Bands while the average true range has risen sharply. The ATR is a sign of increased volatility. The signal line of the MACD has been declining. The pair may continue seeing some more volatility today.
The XAU/USD rose to a high of 1612, which was the highest level in more than 7 years. On the four-hour chart, the ATR rose to the highest level in years. The price is above the 14-day and 28-day moving averages. The dots of the Parabolic SAR are below the current price. The pair may continue to see some more volatility as tensions continue to rise.