US-Iran negotiations to restart

US-Iran negotiations to restart remain at the center of market attention, as oil prices slipped despite persistent geopolitical tensions and the ongoing risk of escalation.

Traders appear to be focusing more on the prospect of renewed diplomatic efforts, which could ease pressure on strained supply chains and reduce the geopolitical risk premium currently priced into crude markets.

Should expectations for progress strengthen further, oil prices may extend losses, while any setback in talks could quickly revive bullish momentum.

Oil prices slip as the markets look past tensions

Oil prices fell yesterday, despite the contradicting fundamentals and the possibility of an escalation of the US-Iran conflict.

Market expectations seem to continue to include the possibility of new negotiations between the US and Iran which could lead to an easing of the strained oil supply chains. Should such expectations be maintained or even be enhanced we may see oil prices losing more ground and vice versa.

The USD remains stable

The USD tended to remain relatively stable in today’s Asian session after suffering some losses yesterday.

Market hopes for a possible US-Iran peace deal tended to weigh given the USD’s status as a safe-haven asset. Across the world the Kiwi gained against the USD as inflationary pressures remained unchanged instead of easing as expected.

In Europe, UK’s GBP was little affected by the mixed signals provided by UK’s February employment data, while pound traders turn their attention towards the release of UK’s March CPI rates tomorrow and a possible acceleration of the rates could provide some support for the pound.

On a fundamental level, we note that pressure on UK PM Starmer to resign intensifies and may be weighing somewhat on the pound, as political uncertainty seems to rise.

US stock markets remain confident

US stock markets remained confident as major indexes neared record high levels again. In Apple, CEO Timothy Cook is stepping down and long-time hardware chief John Ternus is taking over signaling an end of an era whether one liked it or not.

As for earnings releases, we note today in the after-market hours the release of BHP Group’s report and should the EPS and Revenue figures be better than expected and accompanied by a confident forward guidance we may see its share price getting some support. 

Autres points forts pour aujourd'hui

Today we get the US retail sales for March and the weekly US API crude oil inventories figure. We highlight the Senate Banking Committee’s hearing of Kevin Warsh to be next chair of the Federal Reserve on a monetary level.

US lawmakers are expected to roast him and should he sound dovish, we may see the USD retreating further. Also the statements of ECB policymaker Oli Rehn could also create turbulence for the EUR  In tomorrow’s Asian session, we get Japan’s trade data for March.

Charts to keep an eye out

S&P 500

S&P 500 despite opening lower yesterday remained above the 7015 (S1) support line, edged higher and during today’s Asian session neared record high levels of Friday.

We intend to maintain our bullish outlook for the index as long as upward trendline guiding it remains intact. Also the RSI indicator is above the reading of 70, highlighting the strong bullish market sentiment for the index yet also underscores how the index’s price is at overbought levels and possibly ripe for a correction lower.

Should the bulls maintain control over the index, S&P 500’s price may enter unchartered waters once again and we set as the next possible target the 7250 (R1) line. Should the bears be in charge we expect the index to break initially the prementioned upward trendline, continue lower to break the 7015 (S1) line and start aiming for the 6715 (S2) barrier.  

GBP/USD

GBP/USD seems to be stabilising between the 1.3590 (R1) resistance level and the 1.3385 (S1) support line. We had switched our bullish outlook for cable in favour of a sideways motion bias, after the pair broke the upward trendline guiding it on Friday, in a first signal of an interruption of the pair’s upward movement.

Should the bulls take over again, we may see GBP/USD breaking the 1.3590 (R1) resistance line and start aiming for the 1.3790 (R2) resistance level. Should the bears be in charge, we may see GBP/USD breaking the 1.3385 (S1) support line and start aiming for the 1.3175 (S2) support level.

US 500 Cash Daily Chart

• Support: 7015 (S1), 6715 (S2), 6490 (S3)
• Resistance: 7250 (R1), 7500 (R2), 7750 (R3) 

GBP/USD Daily Chart

• Support: 1.3385 (S1), 1.3175 (S2), 1.3010 (S3)
• Resistance: 1.3590 (R1), 1.3790 (R2), 1.3980 (R3) 

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