US-Iran News
Following news of the US airstrike on Iranian nuclear facilities this weekend, many traders were expecting a volatile start to trading this week. However, the initial reaction looks very limited in scope. Oil prices have retraced last week’s gains with the futures market shedding more than 6% after gapping higher at the open. Gold futures are in the red today while the Dollar maintains a neutral tone and equity futures back in the green following some initial softness. Crypto prices too are rebounding this morning with BTC futures back in the green following a gap lower at the open.
Market Reaction
In summary, the moves we’ve seen across the board have been mild and maintained. with no major risk-off reaction. It’s worth noting that this is an ongoing situation and could still see an escalation which drives deeper volatility. For now, though, traders appear to be monitoring the situation with caution. The key driver this week will likely be any Iranian counteraction.
Potential Oil Disruption
There have been reports of potential disruption to the Strait of Hormuz which could have a considerable upside impact on energy prices. If seen, this should drive USD higher near-term as traders further scale back Fed easing bets in line with upside inflation risks. However, if Iran refrains from disrupting supply through the Strait of Hormuz, oil prices might continue to fall back from here, keeping USD anchored lower for now. Plenty to watch on the US data calendar this week though market reaction should be limited while traders monitor incoming news flow around Iran.
Technical Views
DXY
For now, the sell-off has stalled into a fresh test of the 98.03 lows with price now testing the bear channel highs and the 99.15 level. If we break higher here, focus will turn to the 100.38 level next, in line with bullish momentum studies readings.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.