EUR/USD
The safe assets are again appreciating. At night Obama permitted air strikes at Iraq, which certainly intensified the geopolitical tension in Eurasia. Ukraine and Russia, Gaza and Israel, Syria and Libya – all these countries are a cause for concern not only among cautious traders already. During yesterday's press-conference the ECB President Mario draghi often mentioned sharp strengthening of the geopolitical risks in the region, which tells negatively on the EU economy and puts pressure on the euro. Most likely, the negative, caused by the restriction of the commodity and money flow due to the EU sanctions and Russia's counter measures, hasn't been fully built into the current rate of the single currency yet. During Draghi's speech the single currency initially grew to 1.3392 against USD, but soon the geopolitics ruined all optimism: during the US session the pair fell down to 1.3340. Later trading was consolidating in the middle of this range and is now held at 1.3360. Technically, the markets are not very eager to sell the euro as too many have already done that. Yet, we shouldn't forget that politics is an unpredictable thing, so another round of rhetoric toughening or reinforcement of military presence can provoke fresh pressure on the single currency, sending the euro far beyond the technically reasonable levels. From the macroeconomic point of view the current levels of eurusd are not surprising. Some banks expect continuation of the downtrend far below 1.30 as a result of divergence of the ECB's and Fed's monetary policies. We've expected it for long. The main issue now is steadiness of the US recovery.
GBP/USD
The geopolitics brought in the foreground the dependence of the British currency on the performance of the stock exchanges. The cable dropped down to 1.68 at night, while the single currency managed to refrain from hitting fresh local lows. Thus, there are reasons to suppose that today's decline signifies further liquidation of the British pound after a short phase of correction. Even at such levels the British currency remains quite expensive in comparison with the previous year. The preceding periods of growth indicated a strong resistance at 1.67. Now this level can become a support. In case it is broken, the cable should be awaited at 1.63.
USD/JPY
The geopolitics seriously interfered into the plans of technical analysis advocates. usdjpy failed to hold above its 200-day MA, falling below 102 against the dollar. The main reason here is Obama's decision regarding Iraq, which provoked selling in the stock exchanges. Though we believe that the yen is not much of a carry-trade currency now, we can't but notice its reflex surges in the period of heavy selling. Most likely, the dollar will be growing against the yen in the near future, but returning to 103 will hardly be quick and easy.
gold
Gold has been growing for three days in a row. Now it is at 1316 and this is growth by $35 since the beginning of the month. July's high makes 1344.86. Probably, only at this level the instrument will be able to test the resistance. Further growth will be supported by the expected demand for the metal after July's drop, by intensification of the geopolitical tension and portfolio rebalancing before the beginning of the new financial year, where the share of stocks has considerably grown after the impressive growth over the previous one.
