Markets start the week on a cautious note, with higher US yields and renewed geopolitical tensions weighing on risk sentiment. Fed Chair Warsh delivered a more hawkish message on Friday, pushing expectations for a September rate hike close to 60% and sending the US 2-year yield back above 4.3%. Meanwhile, fresh tensions between the US and Iran have pushed crude oil higher, adding to inflation concerns.
And if we look at oil, we see price is back to the upside amid ongoing geopolitical tensions in the Middle East. As you know, we are still tracking a triangle in wave B, which is a bullish pattern, but it may still be incomplete. Notice that price is now approaching the upper trend line resistance, so gains could be limited before a potential wave E pullback. Support is around $82, with deeper support at $78. Overall, it’s still sideways price action, but sooner or later the market could be looking for a move into that gap at $91.46.
If crude oil, will indeed see more gains, after triangle is done, then dollar can rally further with yields.
I will talk about this and much more in our webinar today at 15 CET
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