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Forex Today: Crude Oil Rises Strongly on Middle East Tension

Forex Today: Crude Oil Rises Strongly on Middle East Tension

Crude oil continued its recent strong rally as a high probability of an Iranian Axis attack on Israel was forecast yesterday.

➡️ Crude oil rose above 3% yesterday after rising above 10% in a week, mainly on rising tensions in the Middle East coinciding with what was seen yesterday as the most likely time for an Iranian attack on Israel. Many analysts were expecting an attack last night, which failed to materialize. There are now reports that Turkey is communicating confidence that an attack will not be imminent to the US, which wants to convene a summit on an Israel/Hamas ceasefire this Thursday, which would now effectively become an Israel vs. Hamas/Hezbollah/Iran ceasefire. This may be why crude oil futures are trading sideways this morning. Of course, an Iranian attack could still materialize at any time, although Israeli and US forces are on high alert and appear well positioned to defend themselves and attack, possibly preemptively.

➡️ Stock markets continued to recover after a sharp sell-off at the start of last week. A prominent performer today is Japanese Nikkei 225 index , which rose above 2.75% today. The essential theme in the market today is mostly weak risk sentiment.

➡️ In the Forex market, the New Zealand dollar was the strongest major currency, while the Japanese yen was the weakest, putting the spotlight back on the NZD/JPY currency pair for the second day in a row. The US dollar is consolidating. Trend traders will continue to be interested in going long on EUR/USD, even though there has been very slow movement in that currency pair lately.

➡️ Gold came very close to an all-time high yesterday before selling off in the final hoursYesterday's New York close for gold was a record close, which will have led many trend traders to enter a new long position here. As the price is falling, it may be wise to wait for a supportive candlestick on at least a 4-hour time frame to pick a good entry.

➡️ Australian Wage Price Index data came in slightly weaker than expected, continuing a trend of declining inflationary pressures in most parts of the world.

➡️ Two high-impact data will be released today:

    • US PPI (considered a key indicator of inflation)
    • Change in the number of claimants in the UK (unemployment claims)

 

Credit by DailyForex.com

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