EUR/USD is keeping its bearish potential intact around 1.0550 in the European morning on Monday, having opened a new week with a modest bearish gap. Risk-off flows dominate amid escalating Middle East violence, underpinning the safe-haven demand for the US Dollar.
GBP/USD is battling 1.2200, on the defensive early Monday amid risk-aversion. The US Dollar capitalizes on escalating geopolitical tensions in the Middle East and hawkish Fed bets. Higher Oil prices also add to the weight on the pair.
The USD/JPY pair struggles to capitalize on Friday’s positive move and opens with a modest bearish gap on the first day of a new week. Spot prices, however, manage to rebound a few pips from sub-149.00 levels, or the daily low, though lack follow-through in the wake of escalating geopolitical tensions in the Middle East, which tends to benefit the safe-haven Japanese Yen (JPY).
The NZD/USD pair attracts some buyers near the 0.5960 region during the Asian session on Monday and fills a modest weekly bearish gap opening, albeit lacks follow-through. Spot prices remain below last week’s swing high. The global risk sentiment takes a hit in reaction to a Hamas attack on Israel over the weekend, which, in turn, is seen lending some support to the safe-haven US Dollar (USD) and acting as a headwind for the risk-sensitive Kiwi. The Hamas militant group in Gaza, Palestine, attacked Israeli towns in an unprecedented move on Saturday. In response, Israel launched airstrikes on Gaza and declared war against the Palestinian enclave of Gaza on Sunday, resulting in hundreds of casualties on both sides.
USD/CAD continues the losing streak for the third successive session, trading lower around 1.3650 during the early Asian session on Monday. The pair is facing challenges due to a sharp rise in oil prices, which could be attributed to the Palestine-Israel military conflict.
USD/CHF retraces its almost intraday losses, trading around 0.9100 during the Asian session on Monday. The pair faced downward pressure due to the Palestine-Israel military conflict. Additionally, US Nonfarm Payrolls data unveiled on Friday failed to underpin the USD/CHF pair.
Asian action has been dominated by news from Israel, with the usual safe-haven suspects getting a bid. With one war already raging in Europe, a new conflict in the Middle East was bound to rattle the markets.
Oil led the charge with gains of as much as 5% for Brent and U.S. crude, and just when prices had been on the retreat.
Gold price scales higher for the second straight day and climbs to over a one-week high on Monday. Escalating geopolitical tensions in the Middle East provide a strong lift to the safe-haven XAU/USD.
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