Middle East Conflict Ignites Oil Prices, Targeting $80!

Commodity

Summary:

The recent intensification of the conflict between Israel and Iran has propelled oil prices upward. Iran has even hinted at the possibility of closing the Strait of Hormuz, which has further exacerbated market fears of supply chain disruptions.

BUY WTI

Close Time

CLOSED

70.934

Entry Price

77.900

68.400

56.898 -0.335 -0.59%

253.4

Pips

Loss

68.400

68.392

Exit Price

70.934

Entry Price

77.900

Fundamentals

The recent Israeli airstrikes on Iranian nuclear facilities and military targets have directly triggered a surge in safe-haven buying in the crude oil market, driving up prices significantly. The severity of this conflict far exceeds previous incidents—the casualties among Iran’s Revolutionary Guard Corps and nuclear scientists, as well as the shutdown of production platforms at the South Pars gas field following Israeli strikes, have all intensified market concerns over potential disruptions to the Middle East’s crude oil supply chain.

Meanwhile, Iranian officials have indicated that they are seriously considering closing the Strait of Hormuz. As a crucial conduit for global crude oil transportation, approximately one-third of the world’s seaborne crude oil trade passes through the Strait. JPMorgan and other institutions have priced the risk of a closure as a potential oil price shock to $120-$130 per barrel. Although the market currently assesses the probability of a complete closure at only 7%, safe-haven funds have been pouring into crude oil and other commodity markets to hedge against the risk of future supply disruptions.

Additionally, the U.S. and European Strategic Petroleum Reserves (SPR) have been continuously released over the past few months, but the scale of releases has significantly diminished, and expectations for restocking or partial replenishment are beginning to emerge. Reports from Morgan Stanley and other investment banks suggest that if the Middle East conflict escalates further and affects maritime transportation, global inventories would need to allocate an additional 1 million barrels per day to cover the supply gap. This supply deficit is expected to push up oil prices in the short term. On the demand side, China’s “Warm Europe” policy and India’s early entry into the monsoon season, which increases transportation fuel demand, are also providing strong support.

Overall, concerns over supply chain security and the seasonal upturn in demand are giving crude oil bulls a clear advantage at this critical juncture.

Technical Analysis

From the daily chart, WTI crude oil surged by over 10% on June 13 (reaching a high of $74.68), breaking through the key psychological level of $70.00 and the previous resistance at $71.97. This has opened up further upside potential, with the next target likely to test the resistance at $79.35.

In terms of moving averages, the MA20 has crossed above the MA60 to form a bullish golden cross, indicating strong upward momentum and increasing the likelihood of further gains.

Traders are advised to adapt a strategy of buying on dips.

Trading Recommendations

Trading Direction: Long

Entry Price: 70.50

Target Price: 77.90

Stop Loss: 68.40

Valid Until: June 30, 2025, 23:00:00

Support: 69.42/67.77

Resistance: 73.44/74.68

Risk Warnings and Disclaimers

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Manuel

Forex

Economic

Summary:

The proximity of these moving averages, combined with a slight rebound from this support zone, suggests the potential for a bullish reversal in the short term.

BUY GBPUSD

Close Time

CLOSED

1.35500

Entry Price

1.35950

1.35100

1.33879 +0.00172 +0.13%

45.0

Pips

Profit

1.35100

1.35951

Exit Price

1.35500

Entry Price

1.35950

Tensions in the Middle East continue to escalate, with Iran reportedly informing mediators from Qatar and Oman that it “will not negotiate under attack,” according to a source familiar with the ongoing dialogue. This comes amid intensified military exchanges between Iran and Israel. The same source denied recent reports suggesting that Tehran had reached out to Qatar and Oman with a proposal to involve the U.S. in brokering a ceasefire or resuming nuclear talks, stating such claims are “inaccurate.”

Meanwhile, U.S. President Donald Trump affirmed Washington’s unwavering support for Israel, stating on Sunday that although he hopes for a resolution between Iran and Israel, “they’ll have to fight it out.” Trump also reportedly rejected a proposed Israeli plan to target Iran’s Supreme Leader Ayatollah Ali Khamenei, emphasizing his preference to keep the U.S. from being drawn directly into the conflict—for now.

On the economic front, Thursday’s release of the U.S. Producer Price Index (PPI) for May added to signs of cooling inflation. Headline PPI rose 2.6% year-over-year, matching analysts’ expectations and slightly surpassing April’s 2.5%. More notably, core PPI—which excludes volatile food and energy prices—eased to 3.0% from the previous month’s 3.2%, reinforcing the narrative that inflationary pressures are beginning to moderate.

Following a weaker-than-expected Consumer Price Index (CPI) reading earlier in the week, the PPI data has fueled market expectations that the Federal Reserve may be positioning for a potential rate cut as soon as September. A softer inflation outlook typically benefits gold, as the precious metal becomes more attractive in a low-rate environment due to its non-yielding nature.

Across the Atlantic, the latest figures from the UK’s Office for National Statistics (ONS) revealed a sharper-than-expected contraction in economic activity. The British economy shrank by 0.3% in April, missing the consensus forecast of a 0.1% decline. This downturn follows a 0.2% GDP expansion in March. According to the ONS, the contraction was largely driven by a significant drop in exports to the United States, linked to the recent implementation of U.S. trade tariffs. "Following four consecutive monthly increases, April saw the largest recorded monthly fall in goods exports to the U.S., with broad-based declines across most categories of goods," the agency reported.

This unexpected weakness may pressure the Bank of England (BoE) to reconsider its cautious approach to monetary policy. In May, the central bank cut interest rates by 25 basis points to 4.25%, signaling a "gradual and measured" stance on further easing. However, the recent data could prompt a more flexible shift if economic weakness persists. Bullish Momentum May Build from Key Moving Averages_1

Bullish Momentum May Build from Key Moving Averages_1

Technical analysis

The GBP/USD pair is currently finding support near the 1.3536 level, where both the 100-period and 200-period moving averages on the one-hour chart are closely aligned—at 1.3543 and 1.3546, respectively. The proximity of these moving averages, combined with a slight rebound from this support zone, suggests the potential for a bullish reversal in the short term. A sustained move higher could open the door to retest the next resistance zone near 1.3595.

The Relative Strength Index (RSI) stands at 43.61, a level that remains within neutral territory. However, if the pair continues to hold above the current support, the RSI may begin to trend higher, possibly confirming a new upward leg. Conversely, if GBP/USD breaks decisively below 1.3536, bearish momentum could gain traction, particularly if renewed demand for safe-haven assets like the U.S. dollar strengthens amid geopolitical uncertainty.

Trading Recommendations

Trading direction: Buy

Entry price: 1.3550

Target price: 1.3595

Stop loss: 1.3510

Validity: Jun 20, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Forex

Economic

Summary:

As Europe embraces a stronger euro and fiscal support, the era of monetary easing is drawing to a close. Meanwhile, New Zealand's BNZ Manufacturing Index has plunged to 47.5, re-entering contraction territory.

BUY EURNZD

Close Time

CLOSED

1.91149

Entry Price

1.96200

1.89000

2.02793 +0.00596 +0.29%

337.3

Pips

Profit

1.89000

1.94522

Exit Price

1.91149

Entry Price

1.96200