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Gold as well as JPY strengthened yesterday and during today’s Asian session as the US announced that two top Iranian officials were killed in an airstrike at Bagdad airport. The high profile assassinations are considered to be a substantial blow to Iran and according to media, US sources the action aimed at deterring future Iranian attack plans, yet Iran seems to vow vengeance. According to political analysts, the assassination is a further escalation in the undeclared war in the region between Iran, Israel and the Saudi Kingdom, which could evolve to a full blown war. Should there be further escalation, we could see safe havens such as gold and JPY strengthening further and the same applies for oil prices. Gold prices continued to rise yesterday and during today’s Asian session, breaking the 1532 (S1) resistance line, now turned to support. We maintain a bullish outlook for gold’s prices, as the upward trendline incepted since the 23rd of December. Please note that the RSI indicator in the 4 hour chart is above the reading of 70, implying a rather overcrowded position for the precious metal. Should gold find fresh buying orders along its path, we could see it breaking the 1547 (R1) resistance line and aim for the 1565 (R2) resistance level. Should it come under the selling interest of the market, we could see gold’s prices breaking the 1532 (S1) support line and aim for the 1517 (S2) support level.
…while the pound falls on renewed Brexit worries…
The pound weakened against the USD yesterday as renewed worries about a possible hard Brexit seem to take over traders. The UK has until the end of the year to actually agree a new trade relationship with the EU, as the UK Prime minister has stated that no extension will be asked for. Also, financial releases yesterday did not do any favours to the pound, as they showed a contraction of manufacturing activity for December. Brexit uncertainty seems to persist and could keep the pound under pressure in the next few days. GBP/USD dropped yesterday, breaking the 1.3170 (R1) support line, now turned to resistance. We maintain a bearish outlook for the pair over the next few days. Should the bears maintain control over the pair’s direction, we could see it breaking the 1.3015 (S1) support line and aim for the 1.2820 (S2) support level. Should the bulls take over, we could see the pair’s prices breaking the 1.3170 (R1) support line, heading towards the 1.3340 (R2) resistance hurdle.
Other economic highlights today and early tomorrow
In today’s European session, we get from the UK the nationwide house prices for December, from Turkey the CPI rate for December, France’s CPI (EU Normalized) preliminary rate for December, Germany’s unemployment data for December, Germany’s preliminary HICP rate for December and UK Construction PMI for December. In the American session, we get the US ISM Manufacturing PMI for December, the EIA crude oil inventories figure and the US Baker Hughes oil rig count. Please note that the release of the FOMC meeting minutes for the Fed’s last meeting on the 10-11th of December could create substantial volatility for the greenback today. Ass for Monday’s Asian session, we get from Japan the Jibun Mfg PMI for December and from China the Caixin Mfg PMI for December.
XAU/USD 4 Hour
.PNG)
Support: 1532 (S1), 1517 (S2), 1500 (S3)
Resistance: 1547 (R1), 1565 (R2), 1585 (R3)
GBP/USD 4 Hour
.PNG)
Support: 1.3015 (S1), 1.2820 (S2), 1.2600 (S3)
Resistance: 1.3170 (R1), 1.3340 (R2), 1.3500 (R3)
JA 
