EUR/USD moves closer towards a test of key technical levels
As the dollar is keeping more firm amid the risk aversion in markets, EUR/USD is finding itself on the retreat in the European morning - with price slipping to a session low of 1.1150.
Of note, price is now closing in on a test of the 200-hour MA (blue line) @ 1.1146 but also inching closer towards challenging the 200-day moving average @ 1.1142.
A break below both of those levels will reinvigorate sellers to keep the downside momentum in the pair back towards the 1.1100 handle and potentially towards the 100-day moving average, which rests at 1.1063 currently.
The escalation in US-Iran tensions couldn't really come at a worse time for markets as traders and investors are still largely settling into the new year with a weekend break to consider as well when looking at trades today.
That leaves some time to try and digest what may happen next but given the fact that there is a likelihood for retaliation, I reckon markets will adopt a more cautious stance.
In the bigger picture, this doesn't only play around US and Iran as it will involve outside forces such as Russia, China and potentially North Korea too.
If anything else, it leaves more question marks hanging over global geopolitical tensions and that will not be something that risk trades will be too happy about in the long-term.
