Crude oil rises as geopolitical tensions between the US and Iran rise
April 23, 2020
Posted by: Analysis Team
Category: FOREX, Technical Analysis
The price of crude oil rose in overnight trading as investors became optimistic about the market. Most investors believe that low oil prices will cause bankruptcies in the oil market, which will be a natural solution for demand. The price also rose because of geopolitical reasons. In a tweet, Donald Trump asked the US military to shoot down any Iranian vessels that threatened American ships in the Middle East. These tensions are usually positive for oil prices because any conflict would lead to disruption in the oil market. The price of Brent rose to above $24 while the WTI rose to above $14.
US stocks rose yesterday as the market cheered the rising oil prices, relatively strong earnings, and the new stimulus package passed by the Senate. The Dow Jones index rose by more than 450 points while the S&P500 and Nasdaq rose by more than 2%. On Tuesday, the Senate voted on a $484 billion stimulus package that will help companies get by, while earnings from companies like Netflix, Snap, and Kimberley-Clark were relatively better than what analysts were expecting. Today, we will receive earnings from companies like Baker Hughes, CSX, Roche, and Varian among others.
The economic calendar will be relatively busy today. Earlier on, we received disappointing manufacturing PMI data from Japan. The number showed that the PMI dropped to 43.7 this month from the previous 44.8. Later on, we will receive the flash manufacturing PMI data from European countries and the United States. We will receive the March retail sales data from the United Kingdom and industrial confidence data from Norway. Most importantly, we will receive the weekly jobless claims data from the US and new home sales data for March.
The XBR/USD pair rose to a high of 25.42 in overnight trading. This price is slightly above the 23.6% Fibonacci retracement level on the four-hour chart. The RSI has risen close to the overbought level of 70 while the 14-day and 28-day EMA have made a bullish crossover. The signal and histogram line of the MACD have also risen to above the neutral line. Therefore, the pair may continue rising and possibly attempt to retest the 50% retracement at $28.
The EUR/USD pair has found significant support around the current level of 1.0815. On the four-hour chart, this price is along the lower end of the channel that started to form last week. The price is also slightly below the 14-day and 28-day exponential moving averages while the RSI has moved to the oversold level. Therefore, the pair may start a new bearish trend if it manages to move below the current support.
The BTC/USD pair rose to a high of 7185, which is along the important resistance level on the hourly chart. This price is slightly above the short and medium-term moving averages while the volatility has declined. Falling volatility in the BTC market is usually a calm before the storm. The pair will likely start a new trend if it moves above the important resistance level of 7218.