Dow futures fall as Boeing aircraft crashes in Iran
The markets woke up to the news that Iran had fired a dozen ballistic missiles at two American bases in Iraq. This was in reaction to the recent assassination of an Iranian general by American forces. The killing of the general was in reaction to the killing of an American contractor in Iraq. He was killed by militias that are backed by Iran. The price of crude oil and gold rose sharply earlier today after the attack. However, prices then declined after the market assessed the situation. This is partly because the number of people who were killed was not yet known.
The euro declined against the USD after the market received mixed economic data from Europe. In France, data showed that exports declined from €43 billion to €42.1 billion. Imports declined from €47.9 billion to €47.6 billion. In Germany, factory orders declined by 1.3% in November. This was after rising by 0.2% in October. In Europe, survey data showed that the December business climate declined by -0.25, which was lower than the consensus estimates of -0.16. Industrial sentiment declined to -9.3 from the previous -9.1. On a positive note, the UK Halifax house price index rose by an annualized rate by 4.0%. This was higher than the previous increase of 2.1%.
Asian and European stocks declined sharply as markets reacted to the new geopolitical crisis. In China, the Shanghai and A50 index declined by 37 and 137 points respectively. In Australia, the ASX index declined by 9 points. In Europe, the DAX, CAC, and Stoxx declined by 50, 15, and 10 points respectively. Meanwhile, in the United States, futures tied to the Dow declined by 53 points while the Nasdaq and S&P were unmoved. A big loser in the Dow was Boeing, whose stock fell by more than 2%. This was after a Ukrainian Boeing jet crashed in Iran, killing all 176 people.
The EUR/USD pair declined by 20 basis points. The pair dropped to a low of 1.1125. The price is along the lower line of the Bollinger Bands. The RSI has been moving on a downward trend. It has dropped from a high of 73 to the current 33. The accumulation/distribution indicator has been declining. The pair may continue moving lower to test the important level of 1.1100.
The XAU/USD pair rose sharply after the Iranian attacks. It reached a high of 1611, which is the highest level in more than 7 years. The pair then declined and is currently trading at 1581.71. The average true range indicator has risen sharply, which is a signal of increased volatility. The price is above the 14-day and 28-day moving averages. The Relative Vigor Index (RVI) has been declining. The pair may continue to see some volatility ahead of a speech by Trump on the latest attack.
The USD/CHF rose from a low of 0.9665 to an intraday high of 0.9730. This price is between the 0.9645 and 0.9745 range that formed over the past few weeks. The price is slightly above the 14-day and 7-day exponential moving averages. The RSI moved from a low of 33 to 60. The average true range, which is a measure of volatility has been rising. The CHF is often viewed as a safe haven currency. As such, the pair could see some volatility ahead of Trump’s speech.