forexlive50d ago
The rising tensions and expectations of a potential military conflict over the weekend is now keeping markets on edge. Oil prices rallied yesterday, with WTI crude moving up by over 4% to $65 levels now. The jump also coincides with a solid rebound off the 200-day moving average once more, holding since the start of the month.In other markets, the reaction was calmer but there are some nerves showing. The dollar is holding up with EUR/USD easing back under the 1.1800 level while USD/JPY creeps up to just above the 155.00 mark. Despite the early flows here, I would argue the dollar remains vulnerable as we've seen with the Venezuela episode last month. The dollar held up well in early January before tumbling later in the month.And so again, precious metals are a key spot to watch in all this. Gold is inching back closer towards the $5,000 level while silver is also creeping up a little to near $78 now. The latter faces some key near-term resistance around $78.84 currently, from the 200-hour moving average.The latest report is that Trump has not yet decided if and when he wants to launch military strikes at Iran. The Pentagon is already moving personnel out of the Middle East as a precaution but it is said that nothing has been decided just yet. The narrative remains that the US administration will want to wait on further talks to weigh up the situation.But considering the erratic and uncertain nature of their policy handling, markets surely cannot rule out something happening over the weekend. As such, that could see some key posturing in the sessions ahead just in case there are any notable developments.As with war and geopolitical conflict, more often than not the best trade is always to buy the rumour then sell the fact. I reckon we might be headed down that road once again, at least for the oil market. But in waiting too long for the conflict to start up, we could see pullbacks to the price positioning since yesterday. So, just be wary of that. This article was written by Justin Low at investinglive.com.
