empty
24.06.2025 12:12 AM
Should We Expect De-escalation in the Middle East?

This image is no longer relevant

The market has absorbed the news of U.S. strikes on Iran's nuclear facilities quite resiliently. Why did this happen, and why was the reaction relatively muted? These questions are unlikely to have definitive answers. Market reactions are always governed by human behavior since it is people—not robots or AI—making the decisions. Therefore, if the reaction was weak, it means the Iran-Israel war is no longer the sole focus of investors' attention.

In my view, this is fairly logical, as the likelihood of de-escalation between the U.S. and Iran in the near future is high. The Iran-Israel conflict, on the other hand, is a localized dispute that has persisted for years or even decades. The market has learned to respond calmly to tensions in this region. I don't believe America will continue striking Iran's nuclear facilities. A war involving direct U.S. participation would be highly disadvantageous for America and especially for Donald Trump personally. During his first five months as U.S. President, Trump's record has been rather unimpressive. For the most part, the Republican leader has caused more disruption than improvement. Recall that in two and a half months of negotiations, only one trade deal has been signed.

Given this, the U.S. carried out a strike on nuclear sites and declared that Iran's nuclear program had been destroyed, and that's it. Why launch more strikes? Even if Iran retaliates by targeting U.S. military bases in Syria, Washington can choose to stay silent and avoid further escalation. This creates a "1–1" situation: the U.S. strikes, claims success, Iran responds, and it ends there.

This image is no longer relevant

Undoubtedly, there's no complete certainty that the nuclear facilities in Fordow, Natanz, and Isfahan have been completely destroyed. But no one needs that certainty. The world fears a "nuclear threat" from Iran, but the planet has seen more than enough threats over the past decade, with or without Iran. The European Union, for example, has never publicly demanded the destruction of Iran's nuclear developments. This allows the interpretation that the conflict is between the U.S. and Iran, not Iran and the rest of the world.

EUR/USD Wave Structure:

Based on the analysis of EUR/USD, I conclude that the instrument continues to develop a bullish trend segment. The wave structure remains heavily influenced by news events, especially Trump's decisions and U.S. foreign policy. The targets of wave 3 may extend to the 1.25 level. Therefore, I continue to favor buying, with the initial targets around 1.1708, corresponding to 127.2% Fibonacci. De-escalation of the trade war could reverse the upward trend, but there are no signs of reversal or de-escalation. The Iran-Israel war has halted the dollar's decline, but I don't believe it will reverse it.

This image is no longer relevant

GBP/USD Wave Structure:

The wave pattern of GBP/USD remains unchanged. We are dealing with a bullish, impulsive trend segment. Under Trump, the markets may face numerous shocks and reversals, which could significantly alter the wave picture, but the working scenario remains intact at this point. Trump continues to act in ways that weaken demand for the dollar. The targets for the third upward wave are around 1.3708, corresponding to 200.0% Fibonacci from the assumed global wave 2. Therefore, I continue to favor buying, as the market shows no inclination to reverse the trend.

My Core Analytical Principles:

  1. Wave structures should be simple and clear. Complex structures are difficult to play out and often change.
  2. If you're uncertain about the market, stay out.
  3. There is no such thing as 100% certainty in market direction. Always use protective Stop Loss orders.
  4. Wave analysis can be combined with other types of analysis and trading strategies.
Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Alexander Dneprovskiy
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/CAD. Analysis and Forecast

On Wednesday, the USD/CAD pair enters a phase of bullish consolidation, fluctuating just below the five-week high reached the day before. Traders are holding off on aggressive positions ahead

Irina Yanina 12:49 2025-07-30 UTC+2

USD/JPY. Analysis and Forecast

During the Asian session today, the Japanese yen strengthened against the weakening U.S. dollar. However, the yen's upward potential is likely to remain limited, as traders may hold

Irina Yanina 12:23 2025-07-30 UTC+2

Trump's Trade Deals Lack Sufficient Detail

It's clear that the Federal Reserve's hesitation to cut interest rates due to inflation risks at home is partly justified by the lack of substantive details in the trade agreements

Jakub Novak 11:35 2025-07-30 UTC+2

Why Are Markets Riding a Wave of Optimism? (There is a likelihood of rising oil prices and declining gold prices)

Recent events—including victorious declarations from Washington about agreements on customs tariffs with Japan and the EU—continue to support demand for risk assets. At least for now, investors are not concerned

Pati Gani 10:16 2025-07-30 UTC+2

The Fed Unlikely to Send Clear Signals

While the euro and British pound show modest gains against the U.S. dollar, investors hoping for Jerome Powell to hint that the Federal Reserve is moving closer to a rate

Jakub Novak 09:54 2025-07-30 UTC+2

The Market Welcomes the Truce

The final word in the U.S.–China trade negotiations is expected from Donald Trump. Until that happens, the S&P 500 has decided to take a step back—especially with key U.S. data

Marek Petkovich 09:05 2025-07-30 UTC+2

What to Pay Attention to on July 30? A Breakdown of Fundamental Events for Beginners

A considerable number of macroeconomic reports are scheduled for Wednesday. Germany, the Eurozone, and the United States will all release Q2 GDP reports. It is worth noting that while

Paolo Greco 07:07 2025-07-30 UTC+2

GBP/USD Overview – July 30: The Pound Keeps Falling "in Sympathy"

The GBP/USD currency pair continued its decline on Monday and extended the move into Tuesday. It's worth noting that the British pound began falling earlier than the euro, already last

Paolo Greco 03:48 2025-07-30 UTC+2

EUR/USD Overview – July 30: Beating the Fallen

The EUR/USD currency pair continued its downward movement on Tuesday, driven by the same factors as on Monday—as we warned in advance. On Monday, it was revealed that the European

Paolo Greco 03:48 2025-07-30 UTC+2

The Fed Will Remain in Wait-and-See Mode Until September

There will likely be some dovish hints, but they will probably not differ from previous statements and rhetoric by Federal Reserve officials. This is the general expectation one day before

Chin Zhao 01:14 2025-07-30 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.