The price of crude oil rose slightly after Iran captured a British tanker at the Strait of Hormuz. The Iranian government said that the ship had violated international maritime rules. Iranians said that the tanker had collided with an Iranian fishing boat. This new seizure came two weeks after the UK captured an Iranian ship that was transporting crude oil to Syria, which is not allowed. Shortly afterwards, Iranians tried to seize another British ship. The new tensions at the Strait of Hormuz could have serious consequences for the price of crude oil. This is because more than 70% of all the world’s seaborne crude oil passes there.
US futures moved slightly lower ahead of the busiest week for corporate earnings. This week, more than 60% of all companies in the S&P 500 will release their earnings. These include companies like Google, Apple, McDonalds, Illinois Tool Works and Twitter among others. In the previous week, about 10% of the companies in the S&P 500 like Microsoft, Bank of America, and Goldman Sachs released their earnings. More than 80% of these companies released results that were better than expected.
There will little else in the economic calendar today. In Germany, the country’s central bank will release the monthly report, which gives an assessment of the status of Europe’s biggest economy. In Canada, Statistics Canada will release the wholesale sales for the month of June. Investors expect data to show that sales increased by 0.5%, which is slightly lower than the previous 1.7%.
On Friday, the EUR/USD pair started declining after reaching a high of 1.1282. Today, the pair continued moving lower and reached a low of 1.1200. On the hourly chart, this price is slightly higher than the lower line of the Bollinger Bands. The RSI has remained closer to the oversold level of 30 while the momentum indicator is moving to the 100 level. The pair will likely remain along this level as traders wait for the ECB decision later this week.
The XBR/USD pair moved higher slightly after the Iranians seized a British oil tanker at the Strait of Hormuz. As of this writing, the pair is trading at 62.93, which is slightly lower than the high of 63.05. On the hourly chart, the pair is trading along the 50-day moving averages while the price is slightly above the 25-day EMA. While there is no data expected today, the pair could be volatile as tensions in the Strait rises. If it does, it will likely test the 50% Fibonacci Retracement level of 64.
The S&P 500 index ended the week at $2975. This was much lower than the week’s high of $3020. On the hourly chart below, the pair is slightly higher than the lower line of the Bollinger Bands. The RSI has moved to a low of 36. This week, the pair will likely be a bit volatile as investors receive a torrent of earnings reports. This means that the pair will likely move in either direction.