Forex Today: WTI Crude Oil >$74 on Hormuz Semi-Closure

The war continues with full force, hitting several countries, and reducing traffic through Hormuz by 70%, sending Crude Oil to new highs.

1. The US/Israel war against Iran is continuing to rage. It is clear that things are going well for the US/Israeli side. It is also clear that Iran has focused much of its war activity on hitting countries nearby with US bases such as the UAE, Qatar, Kuwait, and Saudi Arabia where Iran can probably do more damage more easily than in Israel, which continues to take fire from Iran, although the war damage in Israel is minimal so far. The aspect of the war that is most disrupting markets is the bottleneck that Iran has succeeded in placing over the Strait of Hormuz. Traffic is down by 70%, and major insurers are telling their tankers not to cross. Iran claims it has closed the Strait while the US insists it is open. It is technically open, but it is also semi-blocked. The situation is interfering with supply and helping push up the price of crude oil. Here is how certain key assets in the market are behaving right now:
   1. WTI Crude Oil - I sold my long position at a profit yesterday thinking the price probably would not rise by much more, but this morning the price action looks bullish, and the price is rising to new short-term highs above $74. It is possible that the price may continue to rise.
   2. Gasoline - futures in the US have risen powerfully to a new 7-month high, but over the past day the price was unable to make a new high. President Trump will be sensitive to domestic Gasoline prices and will do what he can to keep energy production out of the war.
   3. Gold - this sold off a bit yesterday after trading above $5,400 and now seems to have found support in the weekend gap area, with the short-term price action suggesting it might rise over the coming hours.
   4. S&P 500 Index - this is falling again after yesterday's strong recovery following an earlier loss. The price is falling with bearish momentum and looks like it might challenge the 3-month low price in the near term. The area even lower, around 6,500, will likely be extremely pivotal if and when it is revisited, due to the confluence of a recent major bullish bounce and the 200-day simple moving average. Most stock market indices are trading lower today.
2. Iran has fired and continues to fire at several countries in the region: Israel, Kuwait (where US sailors were killed), Iraq, the U.A.E., Qatar, Oman, and Saudi Arabia. Civilian areas have been hit, and casualties incurred, in several of these countries. One of Britain's sovereign bases in Cyprus was hit yesterday again, making this Iran's first attack on a European target. There is a rumour Cyprus is going to ask the EU to ask NATO to invoke Clause 5 (mutual defense pact). Hezbollah has officially joined the war on behalf of Iran. Although its fire on Israel remains minor, there is speculation it may have fired at a sovereign British base in Cyprus also.
3. Qatar yesterday announced the closure of its LNG (liquid natural gas) production after successful Iranian attacks on its key natural gas facilities. This is pushing up the price in the Middle East and Europe. The Iranians will be happy their strategy to impose a cost of the war on the energies market is getting some results.
4. Bitcoin continues to look bearish below the key resistance level at $71,762 although the basic ranging consolidation pattern is continuing. It may be that the recent low we saw near the support at $61,229 will become very crucial, as if that level breaks down, the price could fall to $50,000 or even lower.
5. In the Forex market, the strongest major currencies since today's Tokyo open have been the Canadian Dollar (dragged higher by Crude Oil prices) and the US Dollar (safe haven), while the weakest has been the British Pound. The Forex market may be tricky to navigate this week with potential twists and turns in the US tariff story as well as concerns over the potential outbreak of war between the USA and Iran.
6. We will see the release of the next annual UK Budget today, and there will be a release of Australian GDP data much later.