Market Digest

Global financial markets were dominated by geopolitical tensions and shifting monetary policy expectations as escalating conflict in the Middle East triggered sharp moves across commodities and currencies.

Crude oil prices surged amid growing fears of supply disruptions through the Strait of Hormuz, one of the world’s most critical oil shipping routes. Rising energy prices fueled concerns that inflation pressures could return, potentially delaying interest-rate cuts from major central banks.

At the same time, the U.S. dollar strengthened as investors sought safety during the period of heightened geopolitical uncertainty. Stronger U.S. economic data further reinforced expectations that the Federal Reserve may maintain higher interest rates for longer.

This combination of safe-haven flows and rising yields weighed on gold prices despite the metal’s traditional role as a defensive asset during geopolitical crises. Meanwhile, risk-sensitive currencies such as the Australian dollar experienced volatility following weaker trade data and shifting global risk sentiment.

The Canadian dollar also struggled to benefit from the surge in oil prices as broader safe-haven flows favored the U.S. dollar.

With markets now balancing geopolitical risk, inflation concerns, and several major economic releases ahead, volatility across commodities and foreign exchange markets remains elevated.

Technical Analysis

AUD/USD – Pulls Back Toward 0.7040 Support After Failing at 0.7120

Technical Outlook

AUD/USD remains within a broader bullish structure but is currently undergoing a short-term corrective pullback after failing to sustain gains above the 0.7120 resistance zone.

Momentum indicators provide mixed signals. While the MACD maintains a bullish crossover, the shrinking histogram suggests fading momentum. Meanwhile, the RSI sits near neutral territory around 48, indicating reduced buying pressure.

Price action has recently moved below the 20 EMA, highlighting a loss of short-term momentum. However, the pair continues to trade above the 50, 100, and 200 EMAs, preserving the longer-term bullish trend.

Narrowing Bollinger Bands indicate declining volatility and suggest that the pair may enter a consolidation phase before a potential breakout.

Technical Indicators

• RSI (14): 48 – Neutral signal, indicating possible reversal risk

• MACD: Bullish crossover with weakening momentum

• Bollinger Bands: Price briefly below lower band – oversold signal

• Moving Averages:

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

  • 50, 100, 200 EMA: Price above – long-term bullish trend intact

Key Levels

Resistance: 0.7040, then 0.7120
Support: 0.6925, then 0.6735

USD/CAD – Consolidates Near 1.3670 as Market Tests Resistance

Technical Outlook

USD/CAD is consolidating near the 1.3670 region following a rebound from February lows. Price action remains trapped within a narrow range between 1.3640 support and the 1.3700 resistance zone.

Momentum indicators show a mixed outlook. RSI remains neutral near 49, while the MACD maintains a bearish crossover despite a shrinking histogram, suggesting weakening downside momentum.

Volatility compression, reflected in narrowing Bollinger Bands, indicates that a breakout from the current range could soon occur.

Price is currently testing the 20 and 50 EMAs as resistance while remaining below the 100 and 200 EMAs, which maintains the broader bearish market structure.

Technical Indicators

• RSI (14): 49 – Neutral signal

• MACD: Bearish crossover but slowing momentum

• Bollinger Bands: Narrowing – consolidation phase

• Moving Averages:

  • 20 & 50 EMA: Acting as resistance

  • 100 & 200 EMA: Price below – long-term bearish bias

Key Levels

Resistance: 1.3700, then 1.3910
Support: 1.3640, then 1.3550

XAU/USD – Pullback Toward 5,085 After Rejection at 5,400

Technical Outlook

Gold remains within a strong long-term uptrend but is currently experiencing a corrective pullback after failing to sustain gains near the 5,400 resistance level.

Momentum indicators suggest a consolidation phase. The MACD remains bullish, though the shrinking histogram indicates fading upward momentum. Meanwhile, the RSI near 51 reflects balanced market conditions between buyers and sellers.

Price is testing the 20 EMA near the 5,085 support zone, which may act as a dynamic support area if buyers return.

Narrowing Bollinger Bands further highlight declining volatility, suggesting that the market may soon break out from the current consolidation range.

Technical Indicators

• RSI (14): 51 – Neutral momentum

• MACD: Bullish crossover with weakening momentum

• Bollinger Bands: Approaching middle band – potential support

• Moving Averages:

  • 20 EMA: Short-term support

  • 50, 100, 200 EMA: Long-term bullish trend intact

Key Levels

Resistance: 5,400, then 5,500
Support: 5,085, then 4,880

Economic Developments

Gold Pressured by Stronger Dollar

Gold prices experienced heightened volatility as geopolitical tensions initially boosted safe-haven demand. However, stronger U.S. economic data and rising Treasury yields strengthened the dollar, reducing the appeal of non-yielding assets.

Market Impact:
XAU/USD fell toward the $5,050–$5,060 zone before stabilizing near $5,080.

Oil Surges on Supply Disruption Fears

Crude oil prices surged to multi-month highs as escalating Middle East conflict raised concerns about disruptions to global energy supply routes. Reduced tanker traffic through the Strait of Hormuz forced traders to price in a substantial geopolitical risk premium.

Market Impact:
USOIL spiked above $81.50 before stabilizing near $79 after profit-taking.

Australian Dollar Faces Volatility

The Australian dollar experienced sharp swings as weaker trade data and global risk-off sentiment pressured the currency despite stronger domestic GDP growth.

Market Impact:
AUD/USD dropped toward the 0.7020–0.7050 range as investors shifted toward the U.S. dollar.

Canadian Dollar Struggles Despite Oil Rally

Although oil prices surged, the Canadian dollar weakened as global investors favored the U.S. dollar during the period of heightened geopolitical uncertainty.

Market Impact:
USD/CAD climbed toward 1.3720 before stabilizing around 1.3670.

Dollar Strengthens on Safe-Haven Demand

The U.S. dollar gained broadly as geopolitical tensions increased global risk aversion. Rising oil prices also fueled inflation concerns, reinforcing expectations that the Federal Reserve may delay rate cuts.

Market Impact:

• USDX: Climbed toward 99.40 before stabilizing near 99.05

• EUR/USD: Fell toward 1.1560 before rebounding to around 1.1610

• GBP/USD: Dropped toward 1.3300 before stabilizing near 1.3335

Upcoming Economic Indicators – March 06

United States

Employment and Retail Data

• Non-Farm Employment Change: Forecast 58K | Previous 130K

• Unemployment Rate: Forecast 4.3% | Previous 4.3%

• Average Hourly Earnings: Forecast 0.3% | Previous 0.4%

• Retail Sales: Forecast -0.3%

• Core Retail Sales: Forecast 0.1%

These indicators provide a comprehensive view of the U.S. economy. Strong readings may reinforce expectations of higher-for-longer Federal Reserve policy and support the U.S. dollar.

Canada

Ivey PMI

Forecast: 51.1 | Previous: 50.9

The index measures business conditions across Canada’s economy. Stronger data may support the Canadian dollar, while weaker results could reinforce concerns about slowing growth.

Market Outlook

Markets remain highly sensitive to geopolitical developments in the Middle East, particularly regarding energy supply risks. Rising oil prices are increasing inflation concerns and complicating the outlook for central bank policy.

With several major economic indicators approaching and geopolitical uncertainty still elevated, volatility across commodities, currencies, and global financial markets is expected to remain high in the near term.