Crude price continues upward trend as US-Iran conflict escalates
The price of crude oil remained near a five-month high after US and Iran continued their conflict. In a statement, the United States announced that it was labeling the Iranian Revolutionary Guard as a foreign terrorist organization. In response, Iran branded United States’ Central Command in the region a terrorist organization. Iran accused the US of taking innocent lives in the Middle East, such as shooting a civilian aircraft in Iran, 1988. The US said that it mistook the plane for a military aircraft. The upward trend in the crude price is also because of ongoing fighting in Libya.
The euro climbed as the Trump administration moved to impose tariffs worth $11 billion on imports from the region. It said that the move was justified because of the bloc’s subsidies to Airbus. In a statement, US Trade Representative, Robert Lighthizer, said that the tariffs will be removed as soon as the EU ends its subsidies to the company. However, the EU has said that Boeing too receives large subsidies from the federal and states governments. This decision comes as the Trump administration nears the decision on auto tariffs.
Today, traders will focus on the euro as ECB members start their fourth meeting of the year. The bank is expected to leave rates unchanged, but traders will want to know when it plans to start raising interest rates. Regarding economic data, traders will receive the retail sales from Italy and trade data from Finland. In addition, they will continue to pay close attention to Brexit as European leaders deliberate on whether to give Britain another extension.
The XTI/USD pair continued to move upwards as investors continued to focus on OPEC supply, the new conflict between US and Iran and the ongoing conflict in Libya. The pair is now trading at 64.45, which is above all the short and medium-term EMAs on the four-hour chart. The RSI has moved slightly downwards to the current level of 70, while the momentum indicator has remained above the 100 level. Therefore, the pair will likely continue moving upwards to above the 65 level.
The EUR/USD pair moved upwards slightly ahead of tomorrow’s interest rates decision by the ECB. The pair is now trading at the 1.1267 level, which is above the weekly low of 1.1182. On the hourly chart, the price is close to the upper line of the Bollinger Bands and slightly near the upper line of the Envelopes indicator. However, the money flow index, which is an important volume-based indicator has shown a deviation, which means that the pair could resume the downward trend.
The USD/CHF pair has been relatively unmoved below the parity level. The pair is now trading at the 0.9986 level, which is slightly below the middle line of the Bollinger Bands level. The Average True Range (ATR) indicator has moved lower, which is a sign that volatility has rescinded. The pair will likely remain within this range as traders watch out for the inflation numbers from Switzerland, which are expected later today.