US President Donald Trump warned Iraq with a sanction after the Iraqi Parliament decided to defend the sovereign right to expel US troops. The act comes after US drone attacked and “assassinated” Iran’s military leader General Qasem Soleimani in Baghdad.
Last Wednesday, Iran shot more than a dozen of missiles at US military bases in Iraq but US media reported no casualties. Trump played down the strike. However, Japanese media reported 20 casualties have been found on the sabotaged sites.
Oil prices rose after the US–Iran tension escalated following the death of General Soleimani. However, market prices fell towards weekend to US$60 per barrel region as demand weakened. Iran goes through national mourning and vowed vengeance against the US Government.
Meanwhile, China encouraged US to seek a dialogue with Iran instead of using brute force to resolve the dispute. Dow Jones benchmark made new record high on last Thursday while gold and crude prices sank.
On Friday, US payroll added 145,000 jobs in December. Unemployment rate remained steady at 3.5 per cent. Dow markets was above 29,000 and fell on Friday as profit-taking emerged before the weekend.
US dollar/Japanese yen rose to 108. This week, market is expected to see immediate resistance at 109.70 depending on the movement of the dollar. Breaking above the 109.70 resistance will test 110.70, otherwise the trend might correct at 108.50.
Euro/US dollar traded in downtrend as the dollar rose last week. We foresee the market will be supported at 1.1070. However, the topside potential is limited at 1.1070 as the trend will thread in a narrow movement. Swing patterns are likely to occur and traders are advised to control risk in case the prices extend beyond the consolidated range.
British pound/US dollar moved within 1.2900 – 1.3200 as predicted.