Safe-Haven Rush Powers USD Breakout

Global markets were rocked after coordinated US–Israel strikes on Iran triggered a sharp flight to safety, propelling the US Dollar Index above 98.50 and lifting Treasury yields to multi-week highs. Investors rushed into the greenback as geopolitical tensions intensified across the Middle East, raising concerns over energy supply disruptions and inflation risks.

Oil initially surged toward $75 amid fears surrounding the Strait of Hormuz — a key artery for global crude shipments — before cooling into the low-$70s as traders reassessed the scale of actual supply disruption. Gold spiked to fresh record highs above $5,400 during peak panic flows but later retraced as US equities staged a sharp rebound and USD strength capped further upside.

Meanwhile, USD/JPY extended higher as widening rate differentials and rising oil costs pressured Japan’s outlook. GBP/USD slid toward the 1.34 handle, weighed by risk-off flows and renewed UK political uncertainty.

Technical Analysis

USD/JPY – Bulls Target 159.05 as Momentum Accelerates

USD/JPY remains firmly bullish on the daily timeframe, trading above all major EMAs. RSI at 60 confirms sustained buying pressure, while a bullish MACD crossover signals building upside momentum.

Price action riding the upper Bollinger Band suggests breakout conditions are forming.

Key Levels:

• Resistance: 159.05, then 163.90

• Support: 157.20, then 152.60

A sustained move above 159.05 could accelerate gains, while a break below 157.20 may trigger a corrective pullback.

GBP/USD – Bearish Structure Deepens Below 1.3375

Sterling remains under pressure, trading below major EMAs with RSI at 38, reflecting persistent selling momentum. A bearish MACD crossover supports further downside risk.

Although price briefly broke below the lower Bollinger Band — indicating oversold conditions — volatility expansion suggests trend continuation.

Key Levels:

• Resistance: 1.3695, then 1.3840

• Support: 1.3375, then 1.3060

Failure to reclaim 1.3695 keeps the bearish bias intact.

USOIL – Break Above 70.30 Signals Strength, but Pullback Risk Rises

WTI crude remains structurally bullish above major EMAs, supported by expanding MACD momentum. However, RSI at 71 and a move beyond the upper Bollinger Band highlight overbought conditions.

While the broader trend favors upside toward 73.95 and potentially 80.40, stretched momentum increases the risk of a corrective pullback toward 70.30.

Key Levels:

• Resistance: 73.95, then 80.40

• Support: 70.30, then 62.30

Economic Developments Driving Markets

Gold (XAU/USD) Volatility Intensifies

Gold surged past $5,419 amid heightened war-risk concerns but later retraced toward the mid-$5,300 zone as US stocks rebounded and crude eased from highs. Rising Treasury yields and USD strength limited sustained upside.

Oil Reprices on Hormuz Risk Premium

Crude initially spiked as markets priced in disruption risks around the Strait of Hormuz. However, absent confirmed supply shutdowns and with OPEC+ signaling a modest April output increase, traders faded extreme pricing.

Yen Weakens Despite Traditional Haven Status

The Japanese Yen underperformed as USD demand dominated safe-haven flows. Rising oil prices further pressured Japan’s import-dependent economy, while uncertainty surrounding Bank of Japan policy normalization kept JPY defensive.

Sterling Pressured by Politics and Risk Sentiment

GBP fell toward multi-week lows near 1.34 amid broad USD strength and domestic political uncertainty. While disinflation trends remain constructive, expectations for Bank of England rate cuts remain fluid, keeping volatility elevated.

Upcoming Economic Catalysts – March 03

• BOJ Governor Ueda Speaks – Key for JPY volatility and yield curve guidance

• Eurozone CPI Flash Estimate – Critical for ECB rate expectations

• UK Annual Budget Release – May shift fiscal and growth outlook