Hello everyone, today XM brings you "Markets Must Prepare for a Prolonged Blockade of Iran". We hope it helps you! Original content is as follows:
On Wednesday,xm外汇悉尼办公室 it became known that Donald Trump has ordered preparations for a prolonged blockade of Iran. Let me remind you that the U.S. Navy has blocked the Strait of Hormuz and Iran's ports to prevent Tehran from exporting oil to the Far East. According to Trump, this is the path to total victory, which has already been announced ten times, and this action will force Iran to sign an agreement with the U.S. Naturally, such information did not come from the U.S. president or anyone from the White House administration. This is yet another "insider" report. The Wall Street Journal also stated that other scenarios (such as resuming bombings or withdrawing from the conflict) are not being considered by the American president.
Overall, everything is proceeding as I have been discussing in recent weeks. Since Washington has failed to secure any concessions from Iran regarding the "nuclear issue," Trump has limited options. Exiting the conflict would mean admitting defeat, as the primary objective of the military intervention has not been achieved. Resuming bombings of Iran would further diminish his political ratings, as the majority of Americans do not support war in Iran and react strongly to any personnel or equipment losses. Moreover, Americans are facing a new rise in consumer goods and fuel prices.
The blockade of Iran is a pathway to even more expensive energy resources. However, for Trump, this is not a problem, as the American government will not bear the costs of these expensive energy resources; American consumers will. In 2025, Trump collected dues from the American populace in the form of illegal trade tariffs, and in 2026, he will collect dues in the form of high-priced gasoline and gas. After all, America is fully energy-secure, and the cost of production has not changed. Consequently, the White House will export more oil and LNG to other countries at higher prices while selling fuel to American consumers at prices 1.5 times higher than just three months ago.
Therefore, for Trump, a long blockade of Iran is the best way out of the current situation and another means of filling the budget. At least for now, with six months remaining until the Congressional elections, during which Tehran may still make concessions. I do not believe this scenario will happen, but the White House leader will find a way out. It is impossible to predict what that will entail. One thing is for sure—it will not please anyone.
Wave Pattern for EUR/USD:
Based on the analysis of EUR/USD, I conclude that the instrument remains within an upward segment of the trend (bottom picture) and, in the short term, is within a corrective structure. The corrective wave set appears quite complete and may take on a more complex, extended form only if the geopolitical backdrop in the Middle East improves. Otherwise, from the current positions, a new downward wave set may begin to form. We have observed the corrective wave, and further developments will depend on market belief in a successful outcome of negotiations.
Wave Pattern for GBP/USD:
The wave pattern for GBP/USD has become clearer over time, as I had anticipated. We now see a clear three-wave upward structure on the charts, which may already be complete. If this is indeed the case, we can expect the formation of at least one downward wave (presumably d). The upward segment of the trend could take on a five-wave form, but for this to happen, the conflict in the Middle East must de-escalate rather than reignite. Therefore, the baseline scenario for the coming days is a decline towards the 34 figure or slightly lower. Again, everything will depend on geopolitical factors.
Key Principles of My Analysis:
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