20.07.202619:51 Forex-elemzések és áttekintések: Tensions in the Bab el-Mandeb Strait Continue to Escalate

It appears that the world may soon face the blockade of another strategically important waterway in the Middle East—the Bab el-Mandeb Strait.

Reports from Yemen indicate that the Houthis, who are allied with Iran, have announced the start of a blockade against Saudi Arabia. Although the Houthis' official statement did not explicitly mention closing the Bab el-Mandeb Strait, that appears to be the intended implication. As a result, global financial markets could face another geopolitical shock at the start of the new trading week.

However, it would be premature to draw definitive conclusions. First, official confirmation that the strait has actually been blocked is needed. It is also possible that the blockade will apply only to Saudi ports and vessels. Even so, the broader implications would remain significant, as Saudi Arabia is the largest exporter of energy commodities through the Bab el-Mandeb Strait. The Houthis stated that Saudi Arabia had kept them under siege for nearly twelve years and described their actions as retaliation. Nevertheless, it is widely understood who is ultimately behind these developments.

Earlier reports indicated that Tehran had urged the Houthis to prepare for a blockade of the Bab el-Mandeb Strait. It now appears that this scenario may be unfolding. Iran previously warned that if the United States targeted its energy infrastructure, the second strategically important shipping route would also face disruption. That warning now appears increasingly relevant, given that the ongoing exchange of missile strikes between Iran and the United States is clearly not directed at remote desert or mountain areas.

Iran and the United States have now exchanged missile strikes for nine consecutive days, while Donald Trump is reportedly planning to expand military pressure on Tehran. In my view, this represents a clear escalation rather than de-escalation. It is also worth noting that Brent crude oil continues to trade relatively steadily, at around $90 per barrel. However, that does not rule out a move toward $100 tomorrow or even $120 shortly thereafter. It should be emphasized once again that a blockade of the Bab el-Mandeb Strait has not yet been officially confirmed.

Should we expect the U.S. dollar to strengthen if a second major Middle Eastern shipping route is blocked? Most likely, yes. I do not expect the dollar to rally by 500–1,000 points on this development alone, but it could appreciate toward 1.1300 against the euro, a scenario that remains consistent with the current Elliott Wave structure. Consequently, geopolitical developments could support demand for the U.S. dollar this week, while the euro is unlikely to receive meaningful support from the European Central Bank (ECB). At present, the market appears to be in the early stages of wave 5 within wave C. The British pound could also decline as part of its corrective wave.

EUR/USD Wave Outlook

Based on my analysis of EUR/USD, I conclude that the pair remains within its broader upward trend segment (shown in the lower chart), while in the shorter term it continues to trade within a downward trend segment. In my opinion, the current environment offers a reasonable opportunity to begin building long positions, although the pair could still decline toward the 1.13 level as part of wave 5 within wave C. Since wave analysis often produces unexpected developments, I would already begin preparing for buying opportunities.

GBP/USD Wave Outlook

The wave structure of GBP/USD has become fairly complex. At present, the pair has completed three downward waves, while EUR/USD may still develop a five-wave decline. Consequently, sterling may form one additional downward wave, similar to the euro. However, this decline could represent wave 2 within a new long-term upward trend. Therefore, although the wave counts for the euro and the pound differ, the divergence is relatively minor and not particularly significant. Based on this outlook, I expect a short-term pullback followed by the beginning of a new upward trend, with the initial targets located in the 1.37–1.38 level.

Core Principles of My Analysis

1. Wave structures should be simple and easy to interpret. Complex wave patterns are difficult to trade and frequently undergo revisions.
2. If there is no clear understanding of current market conditions, it is better to stay out of the market.
3. Absolute certainty about market direction is impossible. Always use protective Stop Loss orders.
4. Wave analysis can be effectively combined with other forms of market analysis and trading strategies.