Imagine you are staring at the terminal screen this afternoon with a lot of excitement. Yesterday the market seemed to be waiting for the right moment to explode due to the tension in the Strait of Hormuz that is squeezing the world's oil flow.
However, the atmosphere suddenly changed to a little relief. Donald Trump suddenly signaled to end the blockade of ships in Hormuz to make way for a final agreement with Iran.
Market sentiment is now in a cautiously optimistic phase. Investors seem to have started to shift from panic mode to opportunity-seeking mode in high-risk assets.
Global stock indices surged to record new record highs while crude oil prices began to slide down. The stock market also received strong support from a very aggressive 'rally' in the technology sector.
The Yen currency continued to show its fangs by strengthening its position. This is a continuation of the government intervention actions last week that are still impacting price movements to this day.
In Europe, political pressure is increasingly being felt by British Prime Minister Keir Starmer. The Labour party is now facing a tough test in local elections that could destabilize London's political landscape.
What does all this mean for you as a trader? Market volatility is expected to remain high, especially for currency pairs involving the USD and JPY, as well as commodities such as crude oil.
You need to be vigilant because such geopolitical news can change in the blink of an eye. If the Trump-Iran talks fail midway, the market risks a drastic U-turn.
Focus your attention on the next London and New York sessions. Any follow-up statements from the White House or European and American economic data will be the main drivers of price movements today.
Make sure your risk management is tight because even though the market may seem calm, the currents underneath are still very strong. Don't rush into the market without a clear price structure confirmation.
