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Forex Today: Crude oil and gold at the mercy of war in the Middle East

Forex Today: Crude oil and gold at the mercy of war in the Middle East

Hamas' deadly surprise weekend attack on Israel has sparked a massive Israeli response, which could further escalate into a broader war in the Middle East, sending stocks lower and safe havens higher.

➡️ Saturday morning saw a surprise invasion of part of Israel by Hamas, which proceeded to massacre hundreds of civilians and kidnap over 100 Israelis in Gaza. This was the deadliest day of violence ever seen in Israel, surpassing even the wars of 1973 and 1948. Israel responded by fully mobilizing in wartime and attacking Hamas in Gaza with force. The Israeli Prime Minister warned of a long and difficult war. Markets now fear that the conflict could spread and disrupt supplies of  crude oil, up more than 4% since the markets opened a few hours ago. The United States has sent an aircraft carrier group to waters near Israel and Gaza in the eastern Mediterranean in an effort to dissuade Iran, Hezbollah, Syria or militias in Iraq from getting involved in the war, which could help keep markets relatively calm.

➡️ Stock markets trade lower, but not dramatically, on news of the warThey  recorded a strong increase thanks to the push of safe haven assets. For the same reason, the US dollar also remains stable, even if it does not advance everywhere.

➡️ In the Forex market, since the weekly open in Asia, the Japanese yen has been the strongest major currency, while the Australian dollar has been the weakest, bringing into focus the currency cross AUD/JPY . Trend traders in the Forex market will be more interested in being long on  USD/JPY  and short on  EUR/USD  as these are the two major dollar pairs that historically tend to trend most reliably and both have valid long-term trends.

➡️ Today is a public holiday in the United States and Canada. This means that market volatility and liquidity are likely to be low after the early hours of today's London session.

 

Credit by DailyForex.com

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