Teheran 2018. The Iranian revolution? Preparing for the oil rally.

Hello, dear friends and colleagues on the “hammer and anvil” of the ForEx market.
With you the smith of your happiness, your co-worker and partner Andrew Green.

Yesterday and today, the situation in the Middle East is heating up. The news about more than 20 dead participants and 500 arrested, confirms fears that this confrontation will not be simply so resolved.

In any situation developed in Iran, we are facing a serious problem with further supplies of oil from this region.

As of 2016, Iran ranked 6th in the world in terms of oil production (3651.3 thousand bar/day) – the Statistical Bulletin 2017 (Annual Statistical Bulletin 2017) of the Organization of the Petroleum Exporting Countries (OPEC). In 2017, the situation for Iran has only improved, despite the general freezing of oil production, Iran has beaten for itself the conditions for further increasing the quota for oil production, based on the fact that in connection with the US trade embargo (for the development of the nuclear program), the total extraction and Iran’s export for more than 4 years (from 2012 to 2016) were under sanctions.

There are two main development options of events are possible now:

• Reconciliation of the current regime with the protesters and the search for a compromise. In this case, feeling the weakness, the accumulated years of dissatisfaction with the existing standard of living and the desire for reforms are pushed up, which is likely to lead to further growth of demands and an attempt at a peaceful overthrow of power. If to be honest, then this option seems to me almost unrealistic.
• Strict suppression of the protesting opposition and the death penalty of those who were detained. Such a decision is in accordance with the current laws of Iran. The mass murder of ordinary citizens with the opposite opinion will cause at least a number of economic sanctions even stronger than in 2012, and as a maximum the beginning of a civil military confrontation.

The likelihood that everything will end peacefully and everyone will shake hands with each other is almost absent.

The consequences for the oil market are quite obvious, and we are already observing them on the overall dynamics of the oil market. We are waiting for the breakdown of the range at 70.0 USD/bar.

As for the foreign exchange market, commodity currency pairs will be the most convenient instruments for trading: USD/CAD, CAD/JPY, AUD/USD, AUD/JPY. From this list I especially recommend CAD/JPY. For those who are interested in a more complete list of commodity currencies, as well as other correlations of the currency, commodity, stock, and other financial markets, I suggest you to consider and select one of our training courses, where experts give detailed and exhaustive information on this issue.

Trade recommendation: STRONG BUY

Now, let’s have a closer look at technical analysis – Figure # 1.

As you can see, on the D1 timeframe, we observe the breakdown of the resistance line of the daily downward correction (red line) and the rebound from the support line of the weekly uptrend (blue line). The figure began to develop a double bottom. Potential for further movement is in the middle period to levels 91.40-60. On the left side of the picture we observe a more familiar timeframe for us: here the main reference points for our trade are the psychological level 90.00, which is already the support line, as well as the lows of the past days in the 89.35-50 range. For myself, as well as for traders who trade in averaging, I recommend an entry from the current positions for purchase, with the subsequent addition at levels 90.00 and 89.50. Landmarks for closing the deal: Profit – 91.20-30, StopLoss – below 89.00.

Examples of transactions:

• conservative option:
  CAD/JPY Buy limit 90.00, SL 89.70, TP 90.40
• aggressive option:
  CAD/JPY Buy (current), SL 88.70, TP 91.20
  CAD/JPY Buy limit 90.00, SL 88.70, TP 90.80
  CAD/JPY Buy limit 89.40, SL 88.70, TP 90.20

For those who have not previously encountered aggressive trade and have no idea what it means, do not even try it yourself.

Ask for advice: expert@esterholdings.com!

It is very important to choose the right amount of the transaction. It depends on the size of the deposit, so it is better to conduct such a trading mode having a certain experience or under the control of a more experienced trader.

Memorize useful information and as they say: Individual success in trading is the conquest of Everest on ones feet, and trading in a team is taking off by helicopter.

 Andrew Green