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FTSE 100, EUR/USD dip as WTI rallies above $104
Technical analysis of the FTSE 100 and EUR/USD as they slip while WTI rallies to above $104 per barrel on heightened tensions in the Middle East.
Macro update
US-Iran talks collapse triggers risk-off sentiment: Weekend negotiations failed to deliver an agreement, intensifying geopolitical tensions and raising concerns over a prolonged conflict.
Oil prices surge above $100 on supply fears: Crude rallied sharply as the US signalled a blockade of Iranian ports, threatening flows through the Strait of Hormuz.
Global equities decline as energy shock weighs on outlook: Asian markets fell and US futures moved lower, reflecting worries about higher inflation and slower growth.
Japan 10-year yields hit fresh 28-year high: JGB yields climbed to their highest level since 1997, underscoring rising inflation pressures and shifting policy expectations.
Dollar strengthens on safe-haven demand: The US currency advanced against major peers as investors rotated into defensive assets amid heightened geopolitical uncertainty.
Inflation risks rise as central banks reassess outlook: Elevated energy prices are expected to feed into global inflation, potentially delaying the pace of monetary easing.
FTSE 100 dips
The FTSE 100 is back in risk-off territory as markets digest the US President's latest move - his naval blockade of the Strait of Hormuz.
The price gap with Friday's 10,567 low may get filled but it is unlikely that the next higher 5 March high at 10,640 will be reached on Monday.
A fall through Monday's intraday low at 10,494 may lead to the 18 March high at 10,447 being revisited. Further down meanders the 55-day simple moving average (SMA) at 10,391.
Short-term outlook: consolidating while below the current April high at 10,724
Medium-term outlook: bullish while remaining above the early April low at 10,252
EUR/USD dips but remains bullish
EUR/USD is expected to resume its advance, having slid back to its 200-day simple moving average (SMA) at $1.1671 which acted as support.
A rise above last week's $1.1740 high would likely engage the $1.1800 region.
Good support sits in the $1.1648-to-$1.1631 region.
Short-term outlook: bullish while above the 8 April low at $1.1589
Medium-term outlook: neutral with a bullish bias while above the 6 April $1.1506 low
WTI rallies once again
Reignited tensions in the US-Israel-Iran conflict has pushed the price of crude to around $104 per barrel mark, close to its late March peak at $106.86 which remains in sight. This will likely be the case while WTI stays above its 9 April low at $95.25 on a daily chart closing basis.
Were a bearish reversal to take the price of WTI to below its 8 April $91.05 low, a further slide towards the 23 March low at $84.37 may ensue.
Short-term outlook: bullish while above the $91.05
Medium-term outlook: bullish while above the 8 April low at $91.05
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