Geopolitical tensions have been on the rise over recent weeks, boosting demand for the safe-haven Dollar. With interest rates and the economic growth outlook remaining at the forefront of risk sentiment, global equities have been taking strain.

With US 100, SPX 500 and the Dow 30 leading losses in yesterday's session, the three major indices have edged slightly higher ahead of the US market open.

Meanwhile, for the German 40, France 40 and the UK 100, prices are trading in a relatively tight range of support and resistance, leaving the door open for a break in either direction.

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USD holds onto gains, pushing EUR/USD and GBP/USD below technical support

As US treasury yields continue to test the highest levels in 16 years, the dominant USD has also placed pressure on commodities and currency pairs trading against the greenback.

For EUR/USD and GBP/USD, the pairs have extended their declines, driving prices below prior technical support turned resistance at the respective levels of 1.060 (Euro/Dollar) and 1.217 (Pound/Dollar)

EUR/USD daily chart

Chart prepared on TradingView

Tesla faces increased scrutiny by EU regulators in Chinese subsidiary probe

Due to the current fundamental backdrop, the release of economic data and rising tensions between China and Western allies (Europe and the United States) are additional factors contributing to volatility and price action.

Trading Insights: Can EU, US and China share a piece of the same pie?

For Tesla, this has posed a major challenge for the largest manufacturer of electric vehicles (EV’s) who have one of their largest production factories based in Shanghai, China. With Tesla currently accounting for 50% of all EV’s imported by the Eurozone, a probe into Chinese state subsidies could place more pressure on the stock price.

Tesla weekly chart

Chart prepared on TradingView

Factors to watch

After the release of disappointing German GfK consumer confidence (Oct) released earlier today (-26.5 vs -26 estimate), focus shifts to US durable goods orders (released at 12:30 UTC) and the EIA weekly oil stockpiles report due 14:30 UTC