- May 9, 2018
- Posted by: Joey Benedid
- Category: Market News
It was announced yesterday that the US will officially withdraw from the Iranian Nuclear Deal and Trump stated that the administration would implement the highest level of sanctions on Iran. Other countries that were part of the 2015 deal, including UK, France and Germany have pledged to remain committed to the agreement, with the Iranian President also committing to the original parameters of the deal. Oil continues to trade at multi year highs eclipsing $71/barrel before retreating back into the $70 range. Iranian production cuts will help foster higher oil prices at a time when Russia and OPEC have already agreed to curb production. Despite US 10-year treasury yields hitting 3% again today USD is sliding, eliminating gains we’ve seen over the course of the last week. Investors have focused their interests on oil and have tabled fixed income for the moment as we see aggressive commodity swings. EUR is mixed after a string of week data points, leading investors to believe that the ECB will have a hard time ending its asset purchasing stimulus program in September as originally planned. Sterling is also mixed despite expectations for a rate hike have all but been removed from the table by the BoE. USD weakness is helping with the slight gains on both GBP and EUR.
With a quiet data day, we look to Thursdays BoE Rate Decision and US CPI, and we’ll end the week off with CAN jobs numbers and US U of Michigan Sentiment. Breaking previous support during the overnight session, short term support and resistance are at 1.2800 and 1.2950 respectively. RSI has moved back to a more neutral 55 and the 200-day moving average resides at 1.2643.