Apr 23, 2024 (MENAFN via COMTEX) --
(MENAFN - Daily Forex) According to forex market trading, the US dollar rose on news of Israeli airstrikes against Iran but has since pared those gains as the attacks were clearly signaled to forex trading platforms, GBP/USD has plummeted to a five-month low of 1.2366 support after Israel launched a series of airstrikes on multiple military targets inside Iran. The attacks represent an escalation in Middle East tensions and have triggered a typical risk-averse market reaction: rising crude oil prices, falling stocks, rising dollar and yields. However, the attacks were clearly signaled and should not have been entirely unexpected. Additionally, Iran has downplayed the damage, suggesting it does not want escalation. These two factors are enough to justify the US dollar\u0026#39;s pullback and could allow currencies like sterling and the euro to regain some of their recently lost ground. Commenting on this, Francesco Pesole, forex analyst at ING Bank, says: \u0026quot;Israel\u0026#39;s retaliatory strike on Iran initially triggered a significant reaction across asset classes, although markets seem somewhat less concerned as European markets open. Safe-haven currencies lead the pack.\u0026quot; ING adds that GBP and EUR are vulnerable to further weakness against the USD due to Middle East tensions. If we see a rise in geopolitical risks, sterling should be, however, in a more vulnerable position than the euro, given sterling\u0026#39;s high sensitivity to global risk sentiment and CFTC data showing sterling has the largest net long positions in the G10. The analyst added: \u0026quot;The euro is not as exposed as higher beta currencies to a potential escalation in the Middle East, although the extension of USD considerations to higher levels, coupled with the sharp rise in energy prices, could lead to a more structurally bearish stance for EUR/USD.\u0026quot; Top Forex Brokers 1 Get Started 74% of retail CFD accounts lose money Read Review BrokerGeoLists({ type: \u0027MobileTopBrokers\u0027, id: \u0027mobile-top-5\u0027, size: 5, getStartedText: \u0060Get Started\u0060, readReviewText: \u0060Read Review\u0060, });According to the best forex trading platforms, sterling sits in the middle of G10 currencies when markets are clearly in \u0026quot;risk aversion/risk appetite\u0026quot; mode. It tends to lose against the dollar, yen, and franc, and to a lesser extent, the euro when markets are fearful. And it tends to make gains against commodity currencies like the dollar, especially the Norwegian krone, Australian dollar, and New Zealand Dollar forecasts for the GBP/USD pair today: The losses in Friday\u0026#39;s session for the GBP/USD were sufficient to push the technical indicators towards strong oversold levels, and the continued strength of the US dollar will support a break of the GBP/USD pair towards the psychological support level of 1.2300. If this happens, the most important support in the long term will be a move towards the psychological support level of 1.2000. Moreover, the continued risk aversion negatively affects any attempts for the British pound to rebound higher. Currently, the nearest resistance levels for the currency pair are 1.2420, 1.2500, and 1.2575 respectively. Ultimately, we expect the bearish momentum of the currency pair to remain until the announcement of the US inflation reading favored by the US Federal Reserve and the course of global geopolitical tensions.
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COMTEX_451270185/2604/2024-04-23T04:11:04
