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The global financial landscape is once again being shaped by geopolitical friction, as the US tries to ease the grip of Iran on the Straits of Hormuz, a critical artery for global energy flows.
This escalation is not happening in isolation; it is feeding directly into currency strength, commodity volatility, and shifting investor sentiment across risk assets.market’s expectations for AI
The US dollar is benefiting from safe-haven demand, oil markets are reacting to supply disruption risks, and even cryptocurrencies are finding support from regulatory optimism.
Yet beneath the surface, markets appear conflicted, balancing geopolitical fear with longer-term narratives like AI-driven growth and monetary policy expectations.
USD dominates the FX market
The USD gained in the FX market yesterday, as the tensions in the US-Iranian conflict escalated, enhancing market worries and feeding the greenback with safe-haven inflows.
Today we note the release of the US ISM non-manufacturing PMI figure for April and highlight the release of New Zealand’s employment data for Q1.
A possibly tighter-than-expected employment market in New Zealand could provide some support for the Kiwi and vice versa.
US stock markets corrected lower
US stock markets corrected lower yesterday as Middle East worries intensified.
Despite not doubting that the developments in the US-Iranian conflict are important, at the current stage, we consider the market’s expectations for AI to be dominant.
In the specifics, GameStop’s take-over offer of eBay raised some eyebrows about the sufficient financing of the project.
Oil prices rise as US-Iran tensions rise
Oil prices are rising as tensions escalate in the Persian Gulf. The US has activated a plan to escort ships out of the Gulf, practically threatening to break the closure of the Straits of Hormuz.
As expected, Iran launched its own attacks to counter the US plans. Market expectations that the US Navy will finally be able to ease Iran’s grip on the Straits tend to weigh on oil prices.
Bitcoin rises on regulation hopes
Bitcoin’s price rose above $80k in today’s Asian session. On a fundamental level the crypto market’s sentiment improved as hopes for the CLARITY act were on the rise.
The bill is expected to create a regulatory framework for crypto and is expected to be brought at the Senate floor in June or July. Yet we still maintain some worries for the liquidity of the crypto market.
Other highlights for today
Today we get Switzerland’s CPI rates for April, Canada’s trade data for March and from the US, the new Home sales for March, the JOLTS Job openings figure also for March.
On a monetary level, we note that ECB President Christine Lagarde, Fed’s Vice Chairman Bowman, ECB Board Member Lane and BoE Deputy Governor Woods are scheduled to speak.
In tomorrow’s Asian session, New Zealand’s RBNZ is to release its financial stability report and China’s Rating Dog Services PMI figure for April.
Charts to keep an eye out
WTI
Oil prices were on the rise yesterday with WTI at some point testing the 107.00 (R1) resistance line. Given the inability of the commodity’s price to break clearly the R1, we restrain for now, our outlook to a bias for a sideways motion between the R1 and the S1.
We also warn though that the RSI indicator remains above the reading of 50, implying a bullish predisposition of the market. Should the bulls regain control, we may see WTI breaking the 107.00 (R1) resistance line and start aiming for the 112.70 (R2) level.
Should the bears take over, we may see WTI’s price breaking the 100.90 (S1) support line, opening the gates for the 93.80 (S2) base.
BTC/USD
BTC/USD continued to rise placing some distance between its price action and the 76k (S1) support line. As the crypto king’s price action was able to form a new higher peak after the one on the 27th of April we adopt a bullish outlook and intend to keep it as long as the upward trendline guiding it remains intact. The RSI indicator reached the reading of 70, implying a strong bullish market sentiment supporting our outlook, yet at the same time may imply that Bitcoin may near overbought levels. We set as the next possible target for the bulls, the 88k (R1) resistance line, while should the bears take over, we may see it breaking the prementioned upward trendline, the 76k (S1) support line and start aiming for the 62600 (S2) support level.
WTI Daily Chart
- Support: 100.90 (S1), 93.80 (S2), 87.10 (S3)
- Resistance: 107.00 (R1), 112.70 (R2), 119.50 (R3)
BTC/USD Daily Chart
- Support: 76000 (S1), 62600 (S2), 49200 (S3)
- Resistance: 88000 (R1), 97900 (R2), 107000 (R3)
Disclaimer:
This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.
