Oil falls as Iran vows to breach terms of the JCPOA deal
The price of crude oil declined today after Iran announced that it will breach terms of the Iran nuclear deal that was signed in 2015. The country said that it will start exceeding the limits on its stockpile of enriched uranium as tensions continue in the Persian Gulf. It will continue to exceed these limits unless the European Union firms revive trade with the country. This will help revive the economy that has been in a downward spiral following the US withdrawal from the deal. This announcement came a few days after two oil tankers were attacked at the Strait of Hormuz.
The euro jumped today after the release of EU wage data. In the first quarter, wages rose by 2.50% in the Eurozone. This was higher than the 2.30% growth in the fourth quarter. The labor cost index rose by 2.40%, which was higher than the previous 2.30% but lower than the consensus estimates of 2.60%. These numbers came shortly after the German central bank warned that the country’s economy will shrink a little in the second quarter.
US stocks gained in the premarket as investors cheered the ongoing consolidation. Today, Pfizer announced that it will acquire Array Biopharma for $10 billion. Array is a well-known cancer drug maker. The acquisition came a few days after United Technologies announced that it was merging with Raytheon. Salesforce also announced that it was acquiring Tableau, an SAAS company. Today, the NY Empire State Manufacturing Index declined to -8.60, which was slightly lower than the expected 11.
The EUR/USD pair rose to a high of 1.1247, which was higher than the Friday’s low of 1.1200. On the hourly chart, this price is slightly above the 50% Fibonacci Retracement level. The price is above the 7-day and 14-day moving averages while the RSI has moved from the oversold level of 19 to the current 59. There is a possibility that the pair will reach the 61.8% Fibonacci Retracement level of 1.1260 and then resume the downward trend.
The price of Brent crude oil dropped to a low of $60.40 after Iran made the announcement on uranium enrichment. The pair then pared back some of those losses. On the hourly chart below, the price is along the 14-day and 28-day moving averages. It is also slightly below the 23.6% Fibonacci Retracement level. As shown, the price has also been consolidating between the 63 resistance level and the support of 59. The pair could break-out in either direction ahead of the next week OPEC meeting.
The AUD/USD pair continued to decline, reaching a low of 0.6865. This was the lowest level since May 23. On the four-hour chart, the pair has formed a triple bottom pattern. It is also below the 28-day and 14-day moving averages while the RSI has remained below the oversold level. After hitting the triple bottom, there is a likelihood that the pair will attempt to make another recovery, which will likely see it test the 38.2% Fibonacci Retracement level of 0.7000.