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ING's Francesco Pesole highlights that while a severe and prolonged Gulf conflict could disrupt energy markets, European gas prices are unlikely to surge to 2022 levels due to improved infrastructure and diversified supply chains. This analysis supports a cautiously optimistic outlook for the EUR/USD pair in the medium term. The report suggests that reduced vulnerability to energy shocks will limit upside risks for the euro, but downside risks remain if geopolitical tensions escalate further. For forex traders, this analysis underscores the importance of monitoring Gulf-related developments and energy price trends. A stable EUR/USD trajectory could benefit from reduced volatility in European gas markets, while heightened geopolitical risks might pressure the euro. Traders should also consider central bank policies, particularly the ECB's response to inflation and energy costs. Investors in the MENA region should watch how Gulf stability impacts global energy flows and European economic resilience. A prolonged conflict could indirectly affect Gulf economies through disrupted trade routes and higher energy costs. Key indicators to track include ECB rate decisions, OPEC+ output adjustments, and geopolitical developments in the Middle East.
