EURJPY TECHS: Short-Term Bear Theme

Below is the summary of the text of the "open letter to the American people" from Iranian President Pezeshkian, per IRNA. In short, it doesn't appear to contain anything truly new vs previous rhetoric, and certainly nothing concrete in terms of negotiations with the US. As such it produced a very small relief rally in risk assets which had earlier weakened on anticipation of what the letter might say. 

• "Iranian President Masoud Pezeshkian addressed the American public in a letter released on Wednesday, inviting people in that country to look beyond political rhetoric and reconsider the realities of Iran's past, present, and aspirations for a future defined not by confrontation, but by truth, dignity, and mutual understanding. The president said in his letter that in a world shaped by competing narratives and deep geopolitical tensions, the relationship between Iran and the United States remains one of the most misunderstood. He emphasized that Iran has never, in its modern history, chosen the path of aggression, expansion, colonialism, or domination, and never initiated any war."
• Full text is here
• It concludes: "Today, the world stands at crossroads. Continuing along the path of confrontation is more costly and futile than ever before. The choice between confrontation and engagement is both real and consequential; its outcome will shape the future for generations to come. Throughout its millennia of proud history, Iran has outlasted many aggressors. All that remains of them are tarnished names in history, while Iran endures—resilient, dignified, and proud."
• Attention remains firmly on US President Trump's address at 9pm ET.

• Still higher, US equity indexes trimmed gains after Iranian President "addressed" Americans in a letter late Wednesday, an imminent cease fire or cessation of hostilities unlikely.
• Meanwhile President Donald Trump will deliver an ‘address to the nation’ on Iran tonight at 2100ET. A recent pivot in messaging suggests the White House is looking to build an off-ramp to the war. It is unclear what Trump intends to say, but evidence is mounting that Trump is edging towards declaring a military victory that could lay the groundwork for a demobilisation of US forces.
• Stocks climbed to the best levels since mid- to late-March earlier, while Information Technology sector shares continue to lead advances in the second half, shares of Western Digital outperforming at +9.5% while the following gained 6.5% to 7.5%: Micron Technology, Lumentum Holdings, Intel Corp, Sandisk Corp and Seagate Technology Holdings.
• Industrials next up, led by transportation and construction shares, the following gaining 3.0% to 4.0%: Comfort Systems, Vertiv Holdings, Boeing, United Airlines Holdings, General Electric, EMCOR Group and Caterpillar.
• A broad swath of oil and gas shares underperformed as crude prices declined (WTI below $100/bbl), the following trading -4% to -6.5%: Exxon Mobil, Occidental Petroleum, Chevron, Phillips 66 and Marathon Petroleum Corp.

• Crude prices have fallen today as the market weighs Trump’s call to end the war within weeks, despite the ongoing closure of the Strait of Hormuz and increased US military deployments in the region.
• WTI May 26 is down by 1.1% at $100.3/bbl.
• President Trump said Iran’s President had requested a ceasefire (something Iran denies) but said that one would not be accepted unless the Strait of Hormuz was reopened.
• Trump previously said he foresaw ending the war on Iran within two to three weeks, suggesting the US had largely accomplished its military goals.
• The president will give an address to the nation at 2100 ET on Wednesday to provide an update on Iran.
• Despite today’s move, a bull wave in WTI futures remains intact, with sights on $113.41, the Mar 9 high and bull trigger.
• On the downside, a key support zone to monitor is the area between $91.63 - $80.30, the 20- and 50-day EMA values. A clear break of this support zone is required to signal a possible trend reversal.
• Meanwhile, gold has extended gains, amid the more constructive risk backdrop and weaker US dollar.
• Spot gold has risen by 2.0% to $4,760/oz.
• A corrective cycle in gold remains in play and the metal is holding on to its latest gains. Key near-term resistance is at $4,799.4, the 50-day EMA. A clear break of this would open $4,914.9, a Fibonacci retracement point.