WTI
The oil market saw a continuation of bullish sentiment as tensions in the Middle East escalated following Iran's unprecedented attack and Israel's vow to respond. WTI (West Texas Intermediate) prices remained buoyant, trading above $86 a barrel, while Brent, the global benchmark, edged closer to $91 a barrel after a slight dip in the previous session.
Israel's strong stance in response to Iran's actions has kept geopolitical concerns at the forefront, contributing to the upward pressure on oil prices. Despite calls for restraint from European and US officials, the situation remains tense, and market participants are closely monitoring developments in the region for potential supply disruptions.
XAUUSD
XAUUSD prices continued their ascent, driven by safe-haven demand triggered by heightened tensions in the Middle East. Spot gold rose by 0.9% to reach $2,365.09 per ounce, maintaining its upward trajectory despite the strengthening of the dollar and Treasury yields. The precious metal had reached a record high of $2,431.29 on Friday in anticipation of Iran's retaliatory actions against Israel.
Investors continue to flock to gold as a hedge against geopolitical uncertainty, outweighing the impact of positive economic data such as higher-than-expected US retail sales in March. The lingering possibility of the Federal Reserve delaying interest rate cuts further supports gold's appeal as an alternative investment.
AUDUSD
The Australian Dollar (AUD) faced sustained selling pressure for the third consecutive session, reflecting investor concerns over escalating tensions between Iran and Israel. The AUD/USD pair initially extended losses amid risk aversion, driven by anticipation of Israel's response to Iran's air assault over the weekend. However, it later trimmed some of its losses following mixed data from China, a key trading partner for Australia.
The contrasting monetary policy outlooks between the Reserve Bank of Australia (RBA) and the Federal Reserve continue to weigh on the Australian Dollar. While the RBA maintains a dovish stance, the stronger-than-expected US retail sales figures have bolstered the US Dollar, diminishing market expectations of Fed rate cuts. As a result, the AUD/USD pair hovered around 0.6420 during today's trading session.
Entry Suggestions
WTI: Considering the ongoing geopolitical tensions in the Middle East and the bullish momentum in the oil market, a potential entry point for long positions in WTI could be identified above the $86.50 mark. Traders may look for confirmation of upward momentum before initiating positions, with a target price of $90 and a stop-loss set at $85 to manage downside risk.
XAUUSD: With gold prices maintaining their upward trajectory amidst geopolitical uncertainty, traders could consider entering long positions above the $2,370 level in spot gold. A confirmation of bullish momentum, coupled with ongoing geopolitical tensions, could justify such a trade. The target price for this position could be set at $2,400, with a stop-loss placed at $2,350 to mitigate potential losses.
AUDUSD: Given the persistent weakness in the Australian Dollar and the uncertain geopolitical landscape, traders may consider short positions in the AUD/USD pair below the 0.6400 level. Confirmation of continued selling pressure, along with any further escalation of tensions in the Middle East, could support such a trade. The target price for this short position could be set at 0.6350, with a stop-loss at 0.6450 to manage risk.
Disclaimer
Derivative investments involve significant risks that may result in the loss of your invested capital. You are advised to carefully read and study the legality of the company, products, and trading rules before deciding to invest your money. Be responsible and accountable in your trading.
RISK WARNING IN TRADING
Transactions via margin involve leverage mechanisms, have high risks, and may not be suitable for all investors. THERE IS NO GUARANTEE OF PROFIT on your investment, so be cautious of those who promise profits in trading. It's recommended not to use funds if you're not ready to incur losses. Before deciding to trade, make sure you understand the risks involved and also consider your experience.
Paraphrasing text from FXStreet,Yahoo Finance and Reuters all rights reserved by the original author.
