Market Sector Scanner: Stocks and Gold Rise as Markets Await Iran War End
Markets remained volatile last week as Iran headlines and comments from Donald Trump moved sentiment, with markets hopeful of a potential end to the war in the coming weeks. Oil stayed high, keeping USD/JPY near 160, while strong U.S. employment data had little impact due to holiday trading. Focus remains on the Middle East ahead of important U.S. inflation data at the end of the week.
Another volatile week, with headlines around Donald Trump and Iran driving market moves. Early in the week, markets were more positive as Trump talked about easing tensions, and U.S. stocks rose during the shortened holiday week. Oil prices moved higher, pushing USD/JPY above 160, with no sign of intervention from the Bank of Japan. U.S. employment data was much stronger than expected, but the impact was limited due to low holiday liquidity. Comments from Jerome Powell also helped reduce some inflation concerns.
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Forex Market
USD/JPY
Last Week Recap
Continued tension in Iran pushed oil prices higher, supporting USD/JPY at the start of the week. There was no sign of intervention from the Bank of Japan, but talk of a possible end to the conflict encouraged selling in USD/JPY. Comments from Fed Chair Jerome Powell suggesting inflation may not be as high as expected also weighed on the pair.
Technical Picture
The 160 level and the upper Bollinger Band continue to act as resistance. The uptrend is starting to weaken, with the 10-day moving average turning sideways.
Outlook This Week
USD/JPY remains in a 158–160 range, offering short-term trading opportunities as the market waits for clearer direction from developments in Iran.
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GBP/JPY
Last Week Recap
Concerns about the U.K. economy increased after GDP data showed very limited growth, putting GBP/JPY under pressure. The pair weakened through the week and closed near the bottom of its recent range.
Technical Picture
The 10-day moving average is now starting to turn lower, signaling a shift toward a more bearish short-term trend. Price action has also moved closer to the lower Bollinger Band, which is acting as near-term support, along with the 210 level.
Outlook This Week
The trend has shifted lower, and further yen weakness looks less likely in the short term. A selling strategy may be more appropriate while momentum remains to the downside.
EUR/USD
Last Week Recap
EUR/USD moved higher at the start of the week as markets looked ahead to a possible end to the conflict in Iran. However, stronger-than-expected U.S. employment data brought sellers back into the market later in the week, pushing the pair lower again.
Technical Picture
The lower Bollinger Band provided support early in the week, helping prices stabilize after the initial move higher. However, the pair has since moved back below the 10-day moving average, which is now clearly pointing lower and acting as resistance.
Outlook This Week
The downtrend remains in place, and unless there is a quick resolution to the conflict in Iran, rallies are likely to be limited. Selling on strength still looks like the best short-term strategy.
Equities
U.S. Stock Market
Last Week Recap
Technology stocks saw a strong recovery after recent losses, as bargain buyers stepped in. Comments from Donald Trump about a possible end to the conflict in Iran in the coming weeks helped improve sentiment and supported the Nasdaq early in the week.
Technical Picture
The lower Bollinger Band triggered buying interest at the start of the week, helping the index move back above the 10-day moving average. This suggests the recent strong downtrend may be easing, with short-term momentum turning more neutral.
Outlook This Week
The worst of the recent losses may be behind the Nasdaq in the short term, as long as the conflict does not escalate significantly. A shift toward a range trading strategy, rather than selling, may offer better opportunities in the current market conditions.
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Commodities
Gold
Last Week Recap
Gold had a strong week as longer-term U.S. interest rates moved lower and the U.S. dollar weakened, making gold more attractive to investors. This shift in conditions encouraged buyers to return to the market, supporting prices and helping gold recover from recent losses.
Technical Picture
Price moved back above the 10-day moving average last week, breaking the recent downtrend. The 10-day moving average is now starting to turn higher, suggesting momentum may be shifting to the upside.
Outlook This Week
The downtrend appears to have ended, with buyers likely to support the market. Focusing on buying opportunities to follow the longer-term uptrend looks like the best approach.
The week starts with holidays in the U.K. and U.S., with markets watching closely for any signs that the conflict in Iran may ease. Overall conditions remain uncertain, with traders focused on headlines that could quickly shift sentiment. The main highlight later in the week is key U.S. inflation data, which could drive the next move. Markets will be looking for either a reversal if tensions improve, or further volatility if the situation escalates.
