Oil prices advance on Iran sanctions

7 February, 2017

ECB Draghi is to address the parliament today and investors will be waiting for any hints on changes in the monetary policy. On the press-conference during the last ECB meeting the future seemed quite downbeat on the EU economic growth, while leaving QE without revisions. The fate of the Euro in the short-term could be completely contingent on the Dollars moves.

Meanwhile, the further upturn of the Greenback could be at stake, as there is not enough game-changing fundamental data this week and investors will try to hold Trump’s political bombshells at a close distance, which is the main source of uncertainty for markets nowadays. Unveiling details on the government stimulus plan would immediately unlock the upward path for the currency and traders tempted to sell should be on the lookout.

Payrolls data released last week warranted solid ground for the Dollar (237K jobs added, 4.8% unemployment rate) as there haven’t been even the slightest sign for a selloff yet, the Dollar index held minor gains during the Asian session on Monday.

Sterling kicks off the week by ticking higher during the late Asian sessions, as dim long-term outlook brightens with Brexit “White Book” released on Thursday, sanctioning the official quits from the European Union. In this document UK Prime Minister May sets forth country plans to create an independent migration control to curb the flow of migrants from the EU, while protecting the domestic labour market, ideas on free trade, freedom in trading partnership and what is most important, soft exit from the bloc. As Carney pointed on a strong underlying momentum of the EU economy, hinting on a possible rate hike during the next meeting. This basically removes obstacles for sustainable Pound rally. An area of 1.2510 could be a good point for entry.

The US Sanctions against Iran transmitted market optimism to this week, as prices gain on possible production slowdown in the Islamic countries.  Dollar strengthening remains the main hindrance of the Dollar-denominated commodity. Both benchmarks added 0.3% during late Asian session with prospects on further upturn to the resistance of May 2015 during this week.

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