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Market Overview

Iran Makes Their Stance

In recent days, many have speculated about Iran's response. After the Israeli ground incursion into southern Lebanon, Iran retaliated by launching around 180 ballistic missiles at Israel. This marked a significant escalation, making their stance unmistakably clear. According to reports, most of these missiles were intercepted by Israel's sophisticated air defense systems, while a few hit areas in central Israel. Despite the intensity of the barrage, there were no injuries reported, as per Israeli defense officials.

The missile strike was met with international condemnation, while Iranians celebrated in the streets. Meanwhile, Israel and the United States warned Iran of severe retaliation. Israeli Prime Minister Benjamin Netanyahu said that Iran had “made a big mistake” and promised swift consequences.

Prior to this, Iran had taken a more passive stance, with its president publicly stating they did not want to provoke an all-out war.

Several factors likely explain their earlier reluctance:

1. Economic Fragility: Irans economy is under severe strain, with inflation exceeding 50% and unemployment nearing 10%.

2. Lack of Active Ally Support: Irans main allies, Russia and China, are preoccupied—Russia with its war in Ukraine and China with its own regional issues.

3. Israel‘s Resilience: Despite Iran’s support for its proxies in Lebanon, Israel remained strong and backed by powerful allies like the United States.

Why did Iran change its approach？

Despite these limitations, Iran felt compelled to act. The reasoning behind their missile strike was not purely strategic—it was about maintaining national prestige and imgae. Failing to respond to Israel‘s operations against Hezbollah and its proxies would have damaged Iran’s standing both domestically and in the broader geopolitical arena. Not to mention, Israel had assassinated Hamas leader Ismail Haniyeh and Hezbollah leader Hassan Nasrallah. The missile attack was less a calculated military maneuver and more about saving face.

Market Analysis

GOLD - GOLD is currently finding support but not enough strength compared to the recent escalations happening in West Asia. The price is just about to make another low. This may be in response to the markets waiting for the data to come out tomorrow during the NFP release. This will further bolster market movement. One way or another, this will allow the markets to measure how significant the movement will be ahead of the upcoming November rate cuts.

In other words, GOLD has one direction to go: upward.

SILVER - This commodity is finding strength in the markets and will soon see further buying. As an additional secondary asset to GOLD, it will provide enough security to traders and investors. Currently, we are above 31.472 and expect to find support here to continue trading upward.

DXY - After FED Chair Powell made his statement that another 50-point cut is unlikely, the USD rallied. A slower cut indicates that the U.S. is in a better situation. Another big cut would cause worries and possibly push prices lower than previously seen. We will wait to see how the NFP release tomorrow comes out. Depending on the release, this may push the USD down further.

GBPUSD - The Pound has consolidated and is expected to gain strength soon. However, current weakness is expected to last until a clearer market direction is established tomorrow. Thus, today, there may be little movement or a steady sideways trend.

AUDUSD - The Aussie dollar is currently consolidated. We are waiting for further trading but expect possible buying to come into the market after a deeper correction.

NZDUSD - The Kiwi is undergoing a deeper correction earlier than the Aussie dollar as market expectations for next weeks rate cuts further the drop. We are waiting to see how markets will react to 0.62086.

EURUSD - The Euro weakness has been emphasized further as markets expect more rate cuts in two weeks. We anticipate more selling depending on Friday's data.

USDPY - The Japanese PM announced that they are not ready to announce more rate hikes. Currently, we see the Yen slide massively. We expect further buying to continue in light of the reduced rate hike expectations.

USDCHF - The Franc lost strength, rising above the S&D zone. However, the CHF remains in a range. We expect it to stay in this range longer.

USDCAD - The CAD failed to break below 1.34803. Currently, we see a possible buy with CAD weakness. However, we also expect further selling to continue fundamentally as issues arise in West Asia. We are waiting for further market activity to guide our approach.