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U.S. Takes on Iran and North Korea


Last week, President Donald Trump decided to leave the Joint Comprehensive Plan of Action (JCPOA), also known as the Iran Nuclear Deal. The purpose of this deal was to limit Iran’s capability to create nuclear weapons and, in return, all sanctions against the country would be lifted.

When the U.S. president decided to leave the deal, with praise and condemnation coming from many countries, the geopolitical tension in the middle east only grew. Israel had fired at Iranian bases in Syria as tensions rose, which forced Iran’s hand and fired missiles at the Golan Heights in retaliation. This only caused Israel to retaliate again as several Israeli air strikes battered several Syrian locations. The current tensions only seem increase as time passes.

However, it is not all doom and gloom in the geopolitics world, as the U.S. President has been able to do something that all his predecessors were unable to do. U.S. President Donald Trump and the North Korean Leader Kim Jong-Un will be sitting down, in Singapore for the first time ever next month on June 12th, 2018, as they discuss the denuclearization of the Korean peninsula. This is a huge step for the North Korea – U.S. relationship. The U.S. Secretary of State Mike Pompeo, who was previously the Head of the CIA, went to North Korea and came back with a huge win for the U.S., as three American citizens, Kim Hak Song, Tony Kim, and Kim Dong Chul, returned safely to the U.S. after being captive in North Korea for more than a year. This can be considered a big win for the U.S. president as he gears towards the meeting next month.

Oil is on the Rise

When the U.S. president decided to leave the Iranian deal and impose heavier sanctions on the Middle Eastern country, he did not just affect that country’s economy, but he helped other countries find some breathing room.

Crude Oil was buoyed by the decision as it rose 15%, reaching a level not seen since 2014, November 2014 to be exact. The disrupted oil supply that comes with the sanctions on Iran were the main reason the oil got the boost it did and seems to be on the road to reach higher prices. However, it all depends on many factors, but the most important would be the response of OPEC and China. OPEC will have to make the decision when it meets next month in their meeting and China will have to decide whether to comply with the U.S. sanctions and keep importing oil from Iran and risk sanctions of its own or leave well enough alone.

Economic Calendar

As another week rolls in, it brings with it another set of economic data that shows how the economy of a country is fairing. This week is no different, however this time, the tier-one data are rather scarce and scattered across several countries. The important ones to look out for this week are the British and Australian Employment Reports, the U.S. Retail Sales, and the Canadian CPI and Retail Sales. These figures are the most important aspects of this week’s Economic Calendar.

Market Movers

A double top is formed on the daily chart of the USDJPY just below the 200-Day Moving Average. Twice the pair has tried to break above the 110.00 level, and it has failed twice. The first time, resulted in a move towards the 108.70 at the 100-Day Moving Average, while the second time has also resulted in a downward move that seems to be still in progress. Support on the pair is seen at the convergence between the 100- and 21-Day Moving Averages at around 108.60, as resistance remains bound at the resistance zone between the 110.00 level and the 200-Day Moving Average.

After reaching the highs of the 1,365, the precious metal was captured by a wave of weakness breaking below the 100-Day Moving Average, but it seems that the 200-Day Moving Average at the 1,300-level managed to hold the metal in place. A bounce from that level is apparent, however, the convergence of the 21- and 100-Day Moving Averages at 1,325, could put a stop to the bounce.

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