As we can see, aggression resumed in Iran, and price action on WTI and Brent Crude has shot up again.
In today’s Market Outlook, let’s take a look at Forex trading on USDCAD, Gold XAUUSD, Silver, XAGUSD, the S&P500, the NASDAQ, the Dow Jones Industrial Average, WTI and Brent Crude Oil.
Just when we thought that the price of crude oil might return to normal, aggression flared up in Iran again.
The bottom line is that before the war, we could see up to 140 ships per day passing through the Strait of Hormuz.
The latest estimate is 14, or 10% of normal flow.
And, almost no crude or LNG is passing through due to the extra safety and security risk.
This, of course, affects the overall supply and prices rise.
But for traders, we need to see some good news and some idea that this shipping lane is even partially open before we go short on Brent or WTI Crude Oil.
If things get worse, or the hostilities last for a few days, price action may rise again.
Watch the news and check back here on Thursday.
This has had an effect on the US stock markets, with all major indices pulling back.
We see a potential dip buying opportunity on the S&P 500, but we need to get some technical confirmation from a bounce to the upside and your favourite technical indicators, like a turn up from oversold on the stochastic oscillator.
On the NASDAQ, we have the opposite situation with a clear downtrend based on pessimism over tech stocks.
On the Dow Jones Industrial Average, we see an optimistic chart with similar Iran-based pullbacks.
The huge companies in this index will react more to the price of crude, so we may also see price action move to the upside if we get good news regarding the Iran war.
Of course, in the opposite case, the contrary may be true.
We have to look at the weekly charts to get the full picture on gold and silver, with gold almost back to $4,000.
On lower time frames, we see gold in a descending wedge with $4,000 and $3,930 acting as key levels of support.
As you know, when price breaks out of a triangle like this, it could go either way.
When gold and silver fall, it often indicates USD strength, but we are seeing a mixture in USD pairs.
In fact, we see strength against CHF and JPY.
We see weakness against CAD, with USDCAD approaching support, and against NZD and GBP, and neutral against EUR and AUD.
But today and tomorrow, we have important economic news and events which will likely move the markets for USD and CAD pairs, so watch for News Catalyst Fade opportunities.
For example, if we see news moving price action to the upside on USDCAD, we may have an opportunity to trade WITH the trend.
That’s all for now.
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