USD, WTI and Brent Crude higher on war in Iran [Video]

In today’s Market Outlook, let’s take a look at Forex Trading on USDJPY, Gold, XAUUSD, USDCAD, USDCHF, Brent, WTI Crude Oil, and the NASDAQ.

USD is getting stronger against most other currencies, and we see the biggest change in USDCHF.

USD strength is not uncommon as we see a global sell-off in the stock markets on the back of the US/Iran war.

Price action is at resistance at about 0.78 CHF, and we are technically overbought.

We are seeing the same price action on USDJPY, also overbought, but watch the news.

Most pairs show USD strength except USDCAD. Why?

The reason is the price of Crude Oil.

When the price of WTI rises, so does CAD.

Both Brent and WTI opened with 7 and 8-dollar gaps this Monday morning, retreated, then rose again based on the deteriorating situation in Iran and the Middle East in general.

There is almost no point looking at the technicals, as this gap-trading opportunity will be based on the fundamentals and news coming out of the Middle East and Washington.

Speaking of gap-trading, the NASDAQ and other indices opened with gaps which have been filled with investors buying the dips.

However, price action is falling again with the news that Washington does not really know how long the conflict will last.

Gold also opened with a gap. 

Price action on both gold and silver rose and fell, and is heading higher for the reasons we just discussed.

Regarding everything we have talked about today, the temptation for many traders is to trade the gap and the reversals.

However, be careful as the situation is volatile and fluid, and anything can happen.

We have been looking at various indicators on cTrader, and we want to touch on backtesting.

If you are experimenting with different indicators and time frames, it is important to scroll back in time to see how these indicators correspond with reversals and momentum in general.

These tests can show you just what might be missing in your trading strategy.