Doubts raised over US-Iran ceasefire deal

Ceasefire Deal may be more fragile than expected

The drop of oil prices was halted as doubts were raised about the US-Iran ceasefire deal. The ongoing attacks of Israel on Lebanon, a relative obscurity on whether the Straits of Hormuz have really opened and a dimming of hopes for a more permanent ceasefire deal, all increase doubts about the US-Iranian ceasefire deal. Should we see more signs of progress in the US-Iranian negotiations, oil prices may resume their drop lower, while on the flip side should we see tensions escalating again, we may see oil prices gaining.

Fed’s minutes were hawkish

The release of the Fed’s March meeting minutes seemed to show that Fed policymakers are increasingly inclined towards keeping the bank’s monetary policy tight or even tightening it further. Should we see also Fed policymakers in the coming days proceeding with hawkish remarks, we may see the USD gaining some ground in the FX market, while US equities and gold’s price may be on the retreat. Today, we highlight the release of the US PCE rates for February and the final US GDP rate for Q425 and a possible notable acceleration of the rates could provide some support for the USD. At the same time we note that a possible intensification of the market’s worries may generate a new stream of safe-haven inflows for the USD.   

US stock markets rally

As mentioned in yesterday’s report US stock markets celebrated the US-Iranian ceasefire deal with a rally, yet, we note that should the deal prove to be short-lived, we may see US stock markets tumbling again. Also a possible acceleration of the US PCE rates implying an intensification of inflationary pressures in the US economy in the past month, could weigh on US equities. 

Gold’s price stabilises

Despite starting the day yesterday with some gains, gold’s price relented the gains later on and tended to remain relatively stable. The same applies in today’s Asian session as the USD seems to be gaining some ground. Should we see the USD gaining further ground today we may see the gold’s price retreating further.

Other highlights for today

Today we get Germany’s industrial output for February, and as well as the weekly initial jobless claims figure. In tomorrow’s Asian session, we get Japan’s PPI rates and China’s inflation metrics, both for March. 

Charts to keep an eye out

The drop of WTI’s price was halted, as the commodity’s price was stabilised between the 93.80 (S1) support line and the 100.90 (R1) resistance level yesterday. The RSI indicator also stopped dropping once it reached the reading of 50, implying a rather indecisive market and overall our sideways motion bias expressed in yesterday’s report seems to have been confirmed. Should the bears take over, 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) resistance barrier.     

Dow Jones corrected a bit lower in today’s Asian session, after yesterday’s rally, remaining well between the 48350 (R1) resistance line and the 47150 (S1) support level. The bullish sentiment seems to be a bit dented given the slight correction lower of the RSI indicator, yet the bullish predisposition seems to remain and we intend to maintain our bullish outlook as long as the upward trendline guiding the index remains intact. Should the bulls remain in control, we may see Dow Jones’s price action breaking the 48350 (R1) resistance line and start aiming for the 49600 (R2) resistance level. Should the bears take over we may see the index breaking the 47150 (S1) support line and start aiming for the 45750 (S2) support level.

Calendar follows

WTI Daily Chart

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

US 30 Cash Daily Chart

Resistance: 48350 (R1), 49600 (R2), 50500 (R3)  

Support: 47150 (S1), 45750 (S2), 44580 (S3)

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