23.04.202600:34 Forex Analysis & Reviews: Trump Imposed a Financial Blockade on Iran

As I have said many times, freezing the conflict in the Middle East under current conditions is, in practice, the best of the realistic options. I am not inclined to indulge in optimism or expect a peace deal when there are no grounds for it. Essentially, Donald Trump has already frozen the conflict, as military operations in the region have ceased, but it cannot be considered over. Therefore, Trump will now try to force Iran not just to come to the negotiating table but to accept Washington's demands using other pressure tools, namely, financial ones.

Iran is not afraid of another war, but what if its financial flows are completely blocked, leaving Tehran with no means to wage war? After all, if there is no money, conducting a war will become much more difficult. At least, that is what Trump believes. In my view, even a financial blockade of Iran will not yield the results that Washington desires. According to the White House leader, Iran is losing up to $500 million per day due to the blockade of ports, being unable to export its oil. Perhaps, in reality, this figure is much lower, but oil is indeed one of the key sources for replenishing Tehran's budget.

However, Trump forgets that Iran is far from being the richest country; it has lived in poverty under global sanctions from almost the entire world for 50 years. Iran is used to living in hardship, always being on guard, and going to war every 5-10 years. Therefore, in my view, a financial blockade will not intimidate it either. It should also be understood that the Strait of Hormuz is not the only route for oil to the East. It is the most convenient, cheapest, habitual, and time-tested route, but not the only one. Sooner or later, Iran will seek alternative ways to transport oil to China and other East Asian countries.

Therefore, I believe that a financial blockade will also yield no results, and the conflict may remain frozen for months or even years, as neither side wants direct escalation but is also unwilling to make concessions. Based on this, I do not expect a near-term decline in oil and gas prices, but the US dollar will see increased demand only if the war resumes. I mean the long-term trend, not corrective waves.

Wave Structure for EUR/USD:

Based on my analysis of EUR/USD, I conclude that the instrument remains within an upward segment of the trend (lower picture) and, in the short term, is within a corrective structure. The corrective wave set appears quite complete and may take on a more complex, elongated form only if a stable and long-term truce is established among Iran, the US, Israel, and ALL the other countries in the Middle East. Otherwise, I believe that a new downward wave set may begin from the current positions. Or at least a corrective wave.

Wave Structure for GBP/USD:

The wave structure of the GBP/USD instrument has become clearer over time, as I had anticipated. Now we see a clear three-wave upward structure on the charts, which may already be completed. If this is indeed the case, we can expect the formation of at least one descending wave (presumably d). The upward segment of the trend may take on a five-wave form, but for that to happen, the conflict in the Middle East needs to cool down, not reignite. Therefore, the base scenario for the coming days is a decline into the 34th figure or slightly below. After that, everything will again depend on geopolitical factors.

Fundamental Principles of My Analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to play back, and they often lead to changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There can never be 100% certainty in the direction of movement. Do not forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.