Market Digest

Markets opened the week under significant pressure as geopolitical tensions escalated following failed US-Iran negotiations and renewed threats to restrict Iranian maritime activity.

WTI crude surged sharply in early trading, gaining nearly 10%, while gold declined by approximately $100 and silver dropped 4%. Equity index futures also weakened, falling more than 1% as risk sentiment deteriorated.

Despite earlier optimism surrounding potential negotiations involving Iran and regional actors, the breakdown in talks—centered on disagreements over the Strait of Hormuz, uranium enrichment, and frozen Iranian assets—has reignited uncertainty across global markets.

The US Dollar Index extended its decline for a fifth consecutive session, closing at 98.67 and marking its weakest weekly performance since January. Meanwhile, US Treasury yields showed mixed movement, with the 10-year yield at 4.34% and the 2-year yield easing slightly to 3.81%.

Gold prices fell sharply in early Asian trading, dropping more than 2% to around $4,652 per ounce, as expectations for Federal Reserve rate cuts weakened amid renewed geopolitical risk and inflation concerns. Market pricing now reflects a 98.4% probability that the Fed will hold rates steady in April.

Oil markets remain highly volatile. Despite geopolitical risks, prices pulled back as optimism over a potential de-escalation persisted. WTI settled at $95.62 per barrel, down 2.4%, while Brent crude declined to $94.25 per barrel.

Previous Session Highlights

The US Dollar weakened last week, recording its largest weekly decline since January as investors reduced safe-haven positions amid expectations of a potential ceasefire in the Gulf region.

EUR/USD rose to 1.173, gaining 1.8% on the week, while GBP/USD climbed 2% to 1.347. Risk-sensitive currencies such as the Australian and New Zealand dollars advanced nearly 3% against the US Dollar.

US inflation data showed the largest monthly increase in nearly four years but met expectations, shifting market focus toward geopolitical developments and upcoming negotiations.

Oil markets experienced significant declines last week, with Brent and WTI falling 12.7% and 13.4% respectively, marking their steepest weekly losses since 2022. The selloff was driven by expectations of a potential ceasefire, despite ongoing disruptions in the Strait of Hormuz and reduced Saudi oil output.

Technical Analysis

US Dollar Index – Support Holds as Potential Rebound Builds

The US Dollar Index found support above the 98.50 level after failing to break above 99.00, suggesting the possibility of a short-term rebound within a broader consolidation range.

A sustained hold above 98.65 could open the path toward 99.20–99.30, while a break below support would weaken the recovery outlook.

Key Levels

• Resistance: 99.15–99.30
• Support: 98.65–98.75

EUR/USD – Rebound Faces Resistance, Downside Risk Remains

EUR/USD remains capped below 1.1740 resistance, with price action indicating that recent gains may be corrective within a broader bearish structure.

Failure to break above 1.1735 could lead to renewed downside toward 1.1655–1.1625.

Key Levels

• Resistance: 1.1715–1.1735
• Support: 1.1655–1.1625

Gold – Bearish Bias Persists Below Resistance

Gold continues to face selling pressure below the 4,715 resistance level following its recent decline.

A failure to reclaim this zone could extend losses toward 4,635–4,600, while resistance remains firm near 4,700–4,715.

Key Levels

• Resistance: 4,695–4,715
• Support: 4,635–4,600

Market Movements

US Equities
US markets closed mixed, with the Dow Jones declining 0.56%, the S&P 500 falling 0.11%, and the Nasdaq rising 0.35%.

European Markets
European indices were largely stable, with minor gains across major benchmarks including the CAC 40 and Euro Stoxx 50.

Precious Metals
Gold ended slightly lower despite USD weakness, while silver posted modest gains.

Outlook and Trading Strategy

Short-term strategy favors buying the US Dollar on dips, with strict risk management and defined stop-loss levels. Positions should be managed actively, especially ahead of US market sessions.

Trading Levels:

• USD Index: Buy near 98.65, target 99.20
• EUR/USD: Sell near 1.1735, target 1.1655
• GBP/USD: Sell near 1.3470, target 1.3385
• USD/JPY: Buy near 159.30, target 160.05
• Gold: Sell near 4,715, target 4,600

Risk Management Guidance

Position sizing should be aligned with individual risk tolerance. Conservative traders should limit exposure, while maintaining strict adherence to stop-loss levels.

Profitable positions should be protected once gains exceed 30 points to prevent reversals from eroding profits.