Market Digest

Global markets experienced heightened volatility as escalating geopolitical tensions in the Middle East reshaped investor sentiment across commodities and foreign exchange markets.

Safe-haven demand helped gold stabilize above the $5,100 level, while crude oil prices surged beyond $74 amid concerns that supply flows through the Strait of Hormuz could be disrupted. The geopolitical risk premium kept energy markets elevated despite bearish signals from the latest U.S. crude inventory data.

In the currency markets, the New Zealand dollar weakened as rising energy costs, weaker Chinese economic data, and fading expectations for a Reserve Bank of New Zealand rate hike weighed on sentiment.

Meanwhile, the euro found support after stronger-than-expected Eurozone inflation data reinforced a more hawkish outlook for European Central Bank policy.

The U.S. dollar, which had recently climbed to multi-month highs, retreated slightly as diplomatic headlines hinted at possible de-escalation between the United States and Iran, improving global risk sentiment.

From a technical perspective, EUR/USD and NZD/USD remain under bearish pressure, while oil’s strong breakout toward the $80 region highlights persistent commodity strength. Markets are now positioning ahead of key economic data and central-bank commentary that could drive the next wave of volatility.

Technical Analysis

NZD/USD – Tests Key Support After Breakdown From Range

Technical Outlook

NZD/USD has broken below its previous consolidation range and is now testing the 0.5840 support zone, indicating rising short-term bearish pressure.

Momentum indicators offer mixed signals. The MACD bullish crossover remains intact, but the shrinking histogram and RSI slipping below the 50 level indicate fading upside momentum.

The break below the lower Bollinger Band highlights oversold conditions that could trigger a technical rebound toward 0.5950. However, any sustainable recovery would require the pair to reclaim resistance around the 50-EMA.

Despite the current corrective pullback, the broader trend remains supported by the 100 and 200 EMAs, suggesting that the longer-term bullish structure remains intact.

Technical Indicators

• RSI (14): 47 – Bearish signal indicating selling pressure

• MACD: Bullish crossover but momentum weakening

• Bollinger Bands: Price below lower band, indicating oversold conditions

• Moving Averages:

  • 20 EMA: Price below – short-term bearish momentum

  • 50 EMA: Acting as resistance

  • 100 & 200 EMA: Price above – long-term bullish trend intact

Key Levels

Resistance: 0.5950, then 0.6000
Support: 0.5840, then 0.5725

EUR/USD – Breaks Below Key Support as Bearish Momentum Accelerates

Technical Outlook

EUR/USD has broken beneath the 1.1770 support-turned-resistance zone and is now testing a critical support level near 1.1595. The move signals a shift toward a more bearish market structure.

Momentum indicators strongly support the downside. RSI has moved close to oversold territory, while the MACD bearish crossover continues to widen, indicating accelerating selling pressure.

The pair has also fallen below the 100 and 200 EMAs, highlighting weakening long-term bullish momentum and increasing the risk of a deeper correction toward 1.1510 if the current support fails.

However, the break below the lower Bollinger Band suggests an oversold condition, which could trigger short-term rebounds toward 1.1770 before the broader trend is confirmed.

Technical Indicators

• RSI (14): 36 – Strong bearish momentum

• MACD: Bearish crossover with widening histogram

• Bollinger Bands: Price below lower band – oversold signal

• Moving Averages:

  • 20 & 50 EMA: Price below – medium-term bearish trend

  • 100 & 200 EMA: Price breaking below – weakening long-term bullish structure

Key Levels

Resistance: 1.1770, then 1.1915
Support: 1.1595, then 1.1510

USOIL – Breaks Higher Toward $80 as Momentum Accelerates

Technical Outlook

USOIL has surged sharply and is now trading near $75.87 after breaking above the $74 resistance level, confirming a strong bullish continuation.

Momentum indicators remain firmly positive. The MACD histogram continues widening, while prices remain above all major EMAs, confirming a strong upward trend.

However, the RSI above 70 and a breakout above the upper Bollinger Band indicate overbought conditions. This increases the likelihood of a short-term pullback toward the $74 support area before another potential move higher.

If bullish momentum persists, the next upside targets are near $80.40 and $83.55.

Technical Indicators

• RSI (14): 78 – Overbought conditions

• MACD: Strong bullish momentum

• Bollinger Bands: Price above upper band – possible short-term pullback

• Moving Averages: Price above 20, 50, 100, and 200 EMA – strong bullish trend

Key Levels

Resistance: $80.40, then $83.55
Support: $74.00, then $70.30

Economic Developments

Gold Stabilizes Above $5,100

Gold prices rebounded as escalating Middle East tensions revived demand for safe-haven assets. The metal recovered after a prior session decline, supported by a pause in the U.S. dollar rally.

Despite resilient U.S. economic data—including stronger ISM Services PMI and ADP employment growth—geopolitical uncertainty helped keep gold trading above the $5,100 level.

Key Pair Impact:
XAU/USD: Stabilized around $5,140–$5,150 after rebounding from the $5,100 support area.

Oil Volatility Persists

Crude oil traded in a volatile range as markets balanced geopolitical risks with bearish U.S. inventory data. Concerns about potential shipping disruptions through the Strait of Hormuz continued to support prices despite rising global supply levels.

Key Market Impact:
USOIL: Spiked toward $77.50 before reversing and stabilizing near $75.

Kiwi Dollar Under Pressure

The New Zealand dollar faced pressure as rising energy prices and weaker Chinese manufacturing data weighed on risk-sensitive currencies. China’s PMI contraction heightened concerns about demand from New Zealand’s largest trading partner.

Markets are also scaling back expectations for near-term interest rate hikes by the Reserve Bank of New Zealand.

Key Pair Impact:
NZD/USD: Consolidated around 0.5915 after testing lower levels.

Euro Supported by Inflation Surprise

Eurozone inflation data exceeded expectations, pushing markets to reassess the outlook for European Central Bank policy.

The stronger inflation reading supported the euro as traders reduced expectations for early ECB rate cuts.

Key Pair Impact:
EUR/USD: Stabilized near 1.1640–1.1650 after recovering from earlier lows.

Dollar Pulls Back from Highs

The U.S. dollar retreated from recent highs after reports suggested potential diplomatic engagement between the United States and Iran, easing safe-haven demand.

Strong U.S. economic data—including solid employment and services activity—had limited impact as geopolitical headlines remained the primary driver of market sentiment.

Key Market Impact:

• USDX: Fell back toward 98.80

• USD/JPY: Slipped toward 157.10

• USD/CAD: Declined toward 1.3640

Upcoming Economic Indicators – March 05

United States

Initial Jobless Claims
Forecast: 215K | Previous: 212K

• Higher reading: Bearish for USD

• Lower reading: Bullish for USD

Eurozone

ECB President Lagarde Speech – 17:00 UTC

Markets will monitor comments for signals on inflation persistence and future ECB policy direction.

• More hawkish tone: Bullish for EUR

• More dovish tone: Bearish for EUR

Market Outlook

Markets remain highly sensitive to geopolitical developments in the Middle East, with energy supply risks and diplomatic signals continuing to drive volatility.

Oil prices remain supported by geopolitical risk premiums, gold continues to attract safe-haven demand, and currency markets are balancing inflation data with shifting expectations for global monetary policy.

Traders will closely watch upcoming economic releases and central bank commentary for clearer direction as global risk sentiment remains fragile.