Trading during a war, a pandemic, during trade disputes, and other geopolitical events, especially when some major players are sociopathic, can be quite challenging.
The Iran war is no exception.
I’m Brad Alexander, and in today’s GCI Market Outlook, let’s take a look at Forex trading on EUR AUD, GBPNZD, Silver, XAGUSD, Gold, XAUUSD, the Dow Jones Industrial Average, the S&P 500, WTI, and Brent Crude Oil.
There seems to be no end in sight to the Iran war, and we see the price of crude oil reaching highs again and filling this gap from the past month.
The trade we are all waiting for is the big short when the conflict all but ends and the price of crude falls back to normal levels, and we can bag a lot of pips as we say.
Yesterday, there were peace proposals floated and look what happened to the price of WTI and Brent.
Both broke this double top and fell $4, and if you were paying attention, there was a trade to be had, albeit a short-lived one.
The Indices are all suffering as well, and most of the bearish reactions are based on the Iran war.
If we look at the S&P 500 specifically, we see price action approaching the lower trend line and the stochastic oscillator oversold.
On the 4-hour chart, if you want to make this a technical trade, we see the stochastic oscillator oversold, but we might want to wait for a turn up and for the MACD signal line to pass out of the histogram.
Regardless, the best strategy is to wait for the price of oil to calm down so big business can more accurately forecast profit and loss.
On the Dow Jones Industrial Average, we are also at the lower trend line, so keep an eye on this and the news.
Gold is still falling towards support at $4,000 within this descending triangle, but recent price action suggests it may be attempting to break above the upper trendline.
Silver, on the other hand, has already broken support and has returned and passed above the trendline.
Remember last time, we talked about the News Catalyst Fade?
Well, look what happened: price rose against the trend on GBPNZD, and what followed was a short position that just kept on giving, and is still going.
In fact, all other GBP pairs did the same thing but pulled back against the trend, so here we have an opportunity on GBPUSD to trade WITH the trend again.
But keep an eye on the news as we have UK Employment news today and CPI tomorrow.
Also, we have Australian Employment data and a European Interest Rate announcement and press conference.
So, what we are looking for in both cases is a situation where economic news drives price action against the trend to allow us to trade WITH the trend.
Please keep an eye on the news and all AUD and EUR pairs.
That’s all for now.
CFDs and FX are leveraged products, and your capital may be at risk.