WTI drops hard on Iran noise, Trump to allow sanctions to go forward

Ross J Burland FXStreet

WTI, after a recent spell above the $70 handle, has just tanked from $69.60 down to a low of $67.56. Moreover, the drop has taken out key MAs and trend line prior resistance line/turns support. Currently, WTI is trading at $68.17bbls, with a high of $70.33bbls and a low of $67.56bbls.

The buy the rumour sell the fact is at play here, somewhat jumping the gun a little, (selling the rumour), considering we are still waiting for a formal announcement from the President of the US due today at 1800GMT. At the same time, while Trump seems intent on withdrawing from the deal, at least it seems he will not be announcing today that he is simply ripping up the agreement, but putting in a strategy to confront the regimes hostile actions and to ensure Iran never acquires a nuclear weapon.

Trump won't immediately withdraw from Iran deal, WTI drops $2 - CNN

There are no surprises here, but a CNN report has stated that President Donald Trump is expected to announce on Tuesday he will allow sanctions to go forward on Iran, "a first step toward withdrawing from the touchstone nuclear agreement negotiated by his predecessor, according to a US official and a person familiar with the plan."

BREAKING: Trump has told French President Macron that the U.S. will withdraw from the nuclear deal with Iran, source says - NYT

Meanwhile, the dollar seems unphased by any of the geopolitical risks at play and markets are more concerned about the Fed and rate hikes. The US Federal Reserve chairman Jerome Powell warned today that some investors may not be well positioned for anticipated US interest rate hikes, triggering US Dollar appreciation. The DXy is trading at the higher end of the 92.6540-93.2800 range for today at 93.1750. US 10's are trading at the higher end of the range between 2.94%-2.98%.

WTI levels

The 21-D SMA is holding the sell-off up at 67.73 and the price is back above the descending old resistance. RSI has turned steeply lower, with the hourly charts hitting 30 RSI and dailies turning away from the 70 level.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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