Uncertainty surrounding US-Iran ceasefire deal could boost oil prices
The US-Iranian ceasefire deal seems to be quite fragile as Israel continues to bomb Lebanon. Iran says that the ceasefire deal included Lebanon, while US President Trump stated that the US would take action should Iran fail to adhere to the terms of the “real” ceasefire deal. Also there is little increase in shipping through the Staits of Hormuz and the reopening of the Straits remains key for any ceasefire deal to be achieved. It should be note that the hopes for a more permanent ceasefire deal to be achieve have eased considerably.
Xlence Research Team opinion
Should there be further signals that the temporary US-Iranian ceasefire deal is well-established, we may see oil prices retreating further, while an escalation of tensions between the US and Iran could feed oil bulls on fundamental level, as the supply side of the international oil market could come under threat again.
WTI H4 Chart
- Support: 107.15 (S1), 119.40 (S2), 130.00 (S3)
- Resistance: 96.80 (R1), 76.90 (R2), 67.20 (R3)
The drop of WTI’s price action was halted and the commodity’s price action even corrected a bit higher breaking the 96.80 (S1) resistance line turning it back to a support. We note that RSI indicator seems to continue to imply a bearish predisposition of the market, albeit not as intense. Should the bears regain control over WTI’s price action ,we may see it breaking the 96.80 (S1) support line and start aiming for the 76.90 (S2) support level.
Fed’s hawkish minutes provided little support for the USD
The USD also seems to have halted its drop in the FX market yesterday. The release of the Fed’s March meeting minutes proved that there seems to be wider acceptance of a more hawkish stance among Fed policymakers, yet at the same time failed to provide substantial support for the greenback. Overall though the majority of Fed policymakers seem to be more worried about inflation rather than jobs. We highlight the release of US PCE rates for February in today’s early American session as the next big test for the USD, while the release of the final US GDP rate for Q425, may also prove a substantial market mover should the actual rate differ substantially from expectations.
Xlence Research Team opinion
A possible acceleration of the rates implying a resilience of inflationary pressures in the US economy could provide some support for the USD as it could enhance market expectations for the Fed to remain on hold for longer. Also a substantial acceleration of the final US GDP rate for Q425 could provide some support for the greenback. Finally on a fundamental level, we highlight the USD’s safe haven status as a major issue in the FX market. A possible increase of market uncertainty regarding the US-Iranian ceasefire deal, could provide support for the USD and vice versa.
USD/JPY H4 Chart
- Support: 157.50 (S1), 154.30 (S2), 152.10 (S3)
- Resistance: 160.50 (R1), 164.40 (R2), 168.00 (R3)
In contrast to EUR/USD viewed in yesterday’s report USD/JPY maintain a clearcut sideways motion, between the 157.50 (S1) and the 160.50 (R1) levels. Also the RSI indicator has reached the reading of 50, implying a rather indecisive market, backing our sideways motion bias. For a bullish outlook to emerge we would require a clear breaking of the R1, while for a bearish outlook the pair’s price action has to fall below the S1.
US stock markets’ rally halted
The rally of US stock markets seems to have been halted, at least for now as market doubts for the US-Iranian ceasefire deal emerged. Overall the risk on market sentiment seems to have eased and more cautious approach emerged. Also the release of the Fed’s meeting minutes seemed to have little impact on US equities yesterday, nevertheless we still note the release of the US PCE rate for February as a possible market mover for US stock markets later today.
Xlence Research Team opinion
A more risk oriented approach bey the markets could provide a boost for Bitcoin’s price, while a more cautious approach by the market could weigh on the crypto market, given the market’s perception for a riskier nature of the cryptocurrency market.
US 500 Cash H4 Chart
- Support: 6710 (S1), 6630 (S2), 6530 (S3)
- Resistance: 6805 (R1), 6890 (R2), 6970 (R3)
On a technical level, S&P 500 hit a ceiling on the 6805 (R1) resistance line. Despite the RSI indicator dropping below the reading of 70, it still tends to imply a bullish predisposition of the markets. Should the bulls maintain control as expected, we may see the index breaking the 6805 (R1) resistance line and start aiming for the 6890 (R2) resistance area.
Bitcoin hits a ceiling
Over the past two days the hopes of crypto traders were on the rise as Bitcoin seemed to be staging a rebound. Yet the hopes of crypto traders were crushed, as bitcoin’s price hit the ceiling and corrected lower yesterday. We still view the market sentiment as the main issue on a fundamental level, for the crypto king and the war in Iran tends to play a key role currently.
Xlence Research Team opinion
A more risk oriented approach bey the markets could provide a boost for Bitcoin’s price, while a more cautious approach by the market could weigh on the crypto market, given the market’s perception for a riskier nature of the cryptocurrency market.
BTC/USD H4 Chart
- Support: 70330 (S1), 67730 (S2), 65550 (S3)
- Resistance: 72750 (R1), 75950 (R2), 79240 (R3)
BTC/USD was on the rise since the start of the week, yet hit a ceiling yesterday at the 72750 (R1) resistance line. Despite the correction lower, the bulls may still not be totally out of the picture yet for the time being we see the case for a possible stabilisation of the cryptocurrency’s price action. For a renewal of the bullish outlook we would require Bitcoin’s price to form a new higher peak breaking the 72750 (R1) resistance line and setting the 75950 (R2) resistance barrier in its sights.
Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication.
