S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
- AUD/USD rebound from 0.6842 lows fails to find acceptance above 0.6870.
- The risk-averse mood weighs on the Aussie as the Iran war complicates.
- Analysts at UOB contemplate a further decline towards 0.6765.
The Aussie Dollar (AUD) is trimming losses against the US Dollar (USD) on Monday. The pair bounced from two-month lows around 0.6840 but is struggling to rise above 0.6870, as negative market sentiment keeps weighing on any significant Aussie recovery.
Investors’ mood remains sour on Monday, as the Middle East War gets messier by the day. The irruption of the Iran-backed Houthis in Yemen this weekend has added a new variable to an already complicated scenario, blurring any swift end to the conflict. The Houthis have launched missiles at Israel from Yemen, and threatened to close the Strait of Bab el Mandab, another bottleneck for Saudi Oil supply, which might trigger a further escalation in Crude prices.
Scepticism about Trump’s “negotiations”
Meanwhile, US President Donald Trump has reiterated that there are direct and indirect talks with the Iranian leaders, praising their “very reasonable” attitude, and Pakistan offered to hold talks between the US and Iran.
Investors, however, have taken these comments in stride, as Tehran remains sceptical. Iran’s Parliament Speaker, Mohammed Baqer Qalibat, accused the US of sending messages about negotiations while preparing a ground invasion, and other Iranian leaders threatened with a bloodbath if that invasion finally takes place.
Bearing this in mind, rallies in the risk-sensitive Aussie are likely to find sellers. Technical analysts at UOB see the pair in a bearish trend with 0.6765 as a potential target: “While the weekly MACD remains in positive territory, it has been heading steadily lower over the past few weeks (…) The overall technical picture suggests that AUD/USD could continue to head lower. A clear break below the 0.6850/0.6870 support zone could potentially trigger a sharp decline toward 0.6765.”
