US rejects Iranian response

Oil prices jump after US President rejects Iranian response

US President Trump rejected the Iranian response to the US peace plan, which allowed for market worries for a possible re-escalation of the conflict to emerge. The news tended to push oil prices higher as market worries for the supply side of the international oil market remaining strained for a longer period re-emerged. 

USD supported by safe haven flows

The USD seemed to be supported as the week began, as possible safe-haven inflows emerged for the greenback given the possible re-ignition of tensions in the Middle East. Elsewhere, the political instability in the UK continues to weigh on the pound,  while JPY seems to weaken as Japan seems to be entering a negative spiral created by inflationary pressures and simultaneous high fiscal spending. 

US stock markets remain bullish

US equities seem to remain bullish, given that Nasdaq and S&P 500, are at new All Time High levels, yet Dow Jones tends to be more cautious. We also highlight the preliminary deal reached by Intel to make some chips for Apple. The news caused Intel’s share price to jump over $124 per share, reaching new record high levels.  

Other highlights for today

Today we get Norway’s CPI rates and the US existing home sales both for April. In tomorrow’s Asian session, we get Japan’s All household spending for March and BoJ is to release Summary of Opinions of the April meeting and from Australia the consumer confidence for May and the NAB Business conditions and confidence for April.   

As for the rest of the week

On Tuesday, we get Germany’s ZEW indicators for May, and we highlight the release of the US CPI Rates for April. On Wednesday we get Japan’s current account balance for March, Sweden’s CPI rate for April, Euro Zone’s revised GDP rate for Q1 and the US PPI rates for April. On Thursday, we get UK’s GDP rates for March and from the US the weekly initial jobless claims figure and April’s retail sales. On Friday, we get Japan’s Corporate Goods Prices for April, the US NY Fed manufacturing index for May, Canada’s manufacturing sales for March and the US industrial output for April.

Charts to keep an eye out

WTI’s

WTI’s price rose in today’s Asian session, nearing the 100.90 (R1) resistance line. In its rise, the commodity’s price action broke the downward trendline signalling an interruption off the bearish movement. We adopt for the time being a bias for a sideways motion. The RSI indicator has reached the reading of 50, implying a rather indecisive market, yet the direction could easily change given the volatility characterising the commodity’s price. Should the bears  regain control we may see WTI’s price breaking the 93.80 (S1) support line and start aiming for the 87.10 (S2) support level. Should the bulls take over we may see WTI’s price breaking the 100.90 (R1) resistance line and start aiming for the 107.00 (R2) level.

Nasdaq

rose on Friday breaking the 28750 (S1) resistance line, now turned to support. The RSI indicator is above the reading of 70 implying a strong bullish market sentiment, yet may also be implying that the index is at overbought levels. We maintain our bullish outlook for the index, as expressed in Friday’s report, as long as the upward trendline remains intact, yet highlight the possibility of a correction lower. Should the bulls remain in charge, we may see the index’s price action breaking the 30000 (R1) resistance line and set as the next possible target for the bulls the 31250 (R2) resistance level. Should the bears take over, we may the index breaking initially the prementioned upward trendline, continue to break the 28750 (S1) support level and set its sights on the 27500 (S2) support level.        Calendar follows

Charts follow

WTI Daily Chart

• Support: 93.80 (S1), 87.10 (S2), 82.00 (S3)
• Resistance: 100.90 (R1), 107.00 (R2), 112.70 (R3)  

US 100 Cash Daily Chart

• Support: 28750 (S1), 27500 (S2), 26250 (S3)
• Resistance: 30000 (R1), 31250 (R2), 32500 (R3) 

Disclaimer:
This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.