Global macro overview for 26/09/2017:

The market focus today will be on the situation surrounding North Korea after the country's leader claimed yesterday that the US had declared war on the country. This refers to Donald Trump's subsequent announcements, in which he said that the continuation of North Korea's nuclear program was a "suicide mission". In any case, both sides are turning their strong declarations long ago. This was followed by the provocative flight of US military aircraft in international waters near North Korea. The tension escalates, but if the ruling circles of North Korea are sensible, they will not attack the first, because - whatever the losses they would have posed to American troops in the Pacific or to objects in the continental United States - would probably mean the end of the regime. But of course you never know: will it start, who will start, when and under what pretext. The White House is trying to relieve the tensions, because the media is reporting that the White House has warned that no one has declared a war yet.

So far the financial markets are reacting rather calmly to the events as this is not the first time the US-NK tensions are present in the media. Nevertheless, in a case of further escalation of geopolitical concerns, the most likely reaction will be a flight to safety, which means the JPY, CHF, Gold and possibly Dollar will appreciate across the board and EUR, NZD, AUD and global stock indices will drop.

Let's now take a look at EUR/CHF technical picture at the H4 time frame. The bulls have managed to break out above the trading range and made a new high at the level of 1.1621, but after the geopolitical tensions escalated, the price felt towards the golden trendline support around the level of 1.1411. If the tensions will grow again, the navy trend line might be tested as well and price might drop quickly towards the level of 1.1260.