Crude Oil continues to trade lower with modest bearish momentum as talks progress between the USA and Iran.
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Following the talks between the USA and Iran over the weekend, and apparent relative satisfaction on both sides, WTI crude oil is continuing to trade lower on optimism that the Strait of Hormuz will really be fully reopen soon. Trend traders that are prepared to short commodities will be short here, although it is not clear how much further the price can drop as it has already more or less reached its pre-war technical base. President Trump's threats to return to war, which he has renewed in recent hours, are not taken very seriously by now.
The USA has really conceded to practically of Iran's demands, or at least, has been seen to do so. However, it may be that Trump is just trying to put the issue to the side until after the US midterm elections in November. That is a dangerous game as Iran will be doing everything they can to get Republicans to lose their majority in the Senate, as in that situation Trump would find it practically impossible to return to any kind of war.
Stock markets are mostly trading lower, dragged down by wobbly tech/AI sector which is looking extremely overvalued. The S&P 500 Index came close to testing its record high yesterday before falling quickly and quite heavily. This is a sign of a market that might not be ready to make any new highs any time soon.
Precious metal such as Silver and Gold are trading with some bearish momentum and look likely to test their multi-month lows very soon, especially in the case of Silver. Trend traders prepared to short commodities will also be interested to be short here.
In the Forex market, the USD/JPY currency pair is advancing again towards its multi-year high price - trend traders will still be long of it, with the price getting a boost from a bullish US Dollar. The US Dollar Index is moving higher slowly and looks likely to test its 1-year high price today, hinting at more direction in the Forex market overall. Since today's Tokyo open, the strongest major currency has been the Japanese Yen and the weakest major currency has been the Australian Dollar, putting the AUD/JPY currency cross in some focus, the classic barometer of risk sentiment.
Canadian CPI (inflation) data released yesterday came in higher than expected, showing a month-on-month increase in the rate of inflation to 1.0% while only 0.7% was expected. This gave a short-term boost to the Loonie as it sends a hawkish message to the Bank of Canada, but it quickly faded, dragged lower by the falling price of crude oil.
There are no high-impact data releases expected today, so trading might be a little subdued in some markets.