empty
17.06.2025 09:04 AM
Middle East Crisis as a Prelude to Global War... (Limited Downside Possible for Bitcoin and EUR/USD)

The missile standoff between the U.S. proxy Israel and Iran continues. Yesterday's unexpected departure of the U.S. president from the G7 summit in Canada sparked speculation that America might engage more directly in the Israeli-Iranian conflict. However, Donald Trump keeps insisting that the conflict must be resolved peacefully.

White House Press Secretary K. Leavitt stated Monday that Trump returned to Washington to "attend to many important matters," but later amended this explanation on social media, linking his departure directly to the Middle East situation. Many market participants interpreted this as a signal that the crisis is escalating to a level where both sides are striking critical infrastructure, prompting speculation that the U.S. might become more involved in supporting its regional proxy. Meanwhile, the president continues to take a hands-off approach, saying he's unaware or uninvolved—only intensifying the negative effects of growing uncertainty.

On these developments, crude oil prices, which had started to correct lower and energy sector stocks, resumed upward movement. Given the likely long duration and potential intensification of the conflict—particularly if Tehran retaliates by striking U.S. military bases or blocking sea trade routes off its coast (especially if aggressive Western nations join the fray)—we may soon see oil prices soar to $100, $150, or even higher. That would deliver a severe blow to Western economies and global trade overall, with all the negative ripple effects such a crisis entails.

Meanwhile, worsening conditions in the U.S. economy may force the Federal Reserve to resume rate cuts, which could drive inflation even higher despite already being far from the 2% target. This conflict could throw the U.S. back into an era of double-digit inflation not seen since the 1970s–80s.

In such a scenario, the U.S. dollar would lose its status as a safe-haven asset, and interest in dollar-denominated assets would fade. At the forefront would be the massive U.S. national debt, which Washington will likely never be able to repay to foreign creditors.

Considering these dynamics, one can conclude that failure to de-escalate the Middle East crisis could soon pull more countries into its orbit and trigger a new world war with catastrophic consequences.

What to Expect in Today's Markets?

Today, investors are focused on the release of U.S. retail sales data. However, it's important to note that markets remain preoccupied with the Middle East. Events unfolding there will continue to dictate risk appetite and asset flows. For now, investors remain hopeful that full-scale war can be avoided, which has so far prevented gold and oil prices from skyrocketing. Stocks, cryptocurrencies, and the U.S. dollar are consolidating in tight ranges. This behavior is likely to continue even after the Fed's policy decision tomorrow, which isn't expected to offer new insight into Chairman Jerome Powell's stance on either internal or external crises.

This image is no longer relevant

This image is no longer relevant

Forecast for the day:

Bitcoin

BTC continues to trade in a broad but gradually declining range. The wave of negative sentiment—now amplified by Middle East tensions—puts pressure on crypto demand. Bitcoin is likely to fall further. A drop below $106,733 may trigger a move down to $104,129 and possibly to $100,350, which marks the lower boundary of this short-term trend. The sell level to monitor is $106,504.80.

EUR/USD

The pair is surging rapidly. The euro, viewed as an alternative to the dollar, is rising not because of eurozone strength but because investors are fleeing dollar assets amid fears that U.S. involvement in the Middle East conflict could severely undermine the greenback. Markets have essentially abandoned the long-standing notion that the dollar, as the world's reserve currency, offers protection from financial turmoil. However, if the Fed holds policy steady, that might lead to profit-taking, causing a correction in EUR/USD. A drop below 1.1540 could spark further downside toward 1.1420. The key sell level to monitor is 1.1535.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
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

Consumer lending in the US is slowing down

According to data, consumer lending in the U.S. grew at its slowest pace in three months in May amid a decline in outstanding balances on credit cards and other revolving

Jakub Novak 10:43 2025-07-09 UTC+2

The ECB Is in a Good Position

While the euro remains under pressure against the dollar, risking a complete loss of its bullish momentum, one European policymaker believes the European Central Bank should not be overly concerned

Jakub Novak 10:33 2025-07-09 UTC+2

What to Watch on July 9th: Fundamental Events Breakdown for Beginners

There are no macroeconomic publications scheduled for Wednesday. The week began fairly actively, with both currency pairs declining, even though the fundamental backdrop rather points to another decline

Paolo Greco 08:57 2025-07-09 UTC+2

GBP/USD Overview on July 9, 2025

The GBP/USD pair continued its downward movement on Tuesday, which continues to puzzle observers. As we've repeatedly noted, no instrument in any market can move in the same direction indefinitely

Paolo Greco 08:18 2025-07-09 UTC+2

EUR/USD Overview on July 9, 2025

The EUR/USD currency pair maintained a corrective tone throughout Tuesday. There were no macroeconomic events that day, but Donald Trump "listed" all the countries for which tariffs will be raised

Paolo Greco 07:47 2025-07-09 UTC+2

XAU/USD. Analysis and Forecast

Today, gold remains under pressure; however, several factors are limiting further decline. Expectations that the tariffs imposed by U.S. President Donald Trump will support inflation in the United States

Irina Yanina 19:23 2025-07-08 UTC+2

USD/CHF. Analysis and Forecast

On Tuesday, the USD/CHF pair is under selling pressure, pulling back from the weekly high near the key psychological level of 0.8000. This decline is driven by a combination

Irina Yanina 12:47 2025-07-08 UTC+2

What to Watch on July 8th? Fundamental Events Overview for Beginners

No macroeconomic publications are scheduled for Tuesday. However, it cannot be said that the market was idle on Monday despite the lack of key macroeconomic events—there was still enough news

Paolo Greco 11:19 2025-07-08 UTC+2

Markets given breathing room as tariff deadline pushed to August

No need to panic. The market is simply cautious about the White House's return to the tariffs announced on America's Liberation Day. Donald Trump sent letters to various countries specifying

Marek Petkovich 10:14 2025-07-08 UTC+2

GBP/USD Pair Overview on July 8, 2025

The GBP/USD pair declined slightly on Monday, but it's still premature to speak of a downtrend. From a technical standpoint, the pair remains below the moving average line; however

Paolo Greco 08:55 2025-07-08 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.