EUR/USD has been consolidating for a second consecutive day, caught between hopes for a diplomatic breakthrough in U.S.-Iran negotiations and persistent geopolitical uncertainty.
Possible technical scenarios:
As evidenced by the daily chart, the EUR/USD pair continues its two-week recovery, having consolidated above the 1.1494 support level. The current trend suggests further upside potential toward the dashed resistance at 1.1682. A sustained break above this level would shift the focus to the next target at 1.1788.
Fundamental drivers of volatility:
The U.S. dollar continues to benefit from safe-haven demand. Despite reports of potential ceasefire talks between the U.S. and Iran, the geopolitical landscape remains fragile, keeping the USD in demand as a protective asset. Any signals of further escalation will likely bolster the greenback and limit EUR/USD’s upside.
The energy sector remains a primary source of pressure for the euro. Rising energy costs are fueling inflation risks across the Eurozone. ECB officials have noted that these pressures could transition into core inflation more rapidly than in previous cycles, adding uncertainty to the central bank's policy outlook and increasing volatility for the single currency.
Monetary policy remains a key focus. The ECB maintains a flexible, data-dependent approach, while the dollar’s underlying strength reflects ongoing global liquidity demand. In the short term, EUR/USD price action will be steered by U.S.-Iran headlines and market responses to energy-linked inflation risks.
Intraday technical picture:
The 4H chart displays a local uptrend, with the pair maintaining enough room to move toward the resistance boundary of the 1.1494–1.1682 range.
GBP/USD is consolidating near the 1.3400 handle this Wednesday as market participants weigh the economic consequences of the Middle East conflict and exercise caution regarding its eventual resolution.
Possible technical scenarios:
Judging by the unfolding scenario on the daily chart, GBP/USD is trading just below the 1.3436 resistance level. With recent breakout attempts failing to gain traction, a bearish reversal toward the support of the 1.3208–1.3436 range remains a distinct possibility.
Fundamental drivers of volatility:
UK inflation remains a critical factor for the pair. While February's CPI held steady at 3%, the market considers this data outdated given the sharp rise in energy prices. Mounting inflation expectations following the onset of the U.S.-Iran conflict suggest a potential acceleration of price pressures in the months ahead.
This has prompted a significant reassessment of the Bank of England's monetary path. Markets are now pricing in the potential for near-term rate hikes, a sharp departure from earlier expectations of cuts. That being said, some economists remain cautious about tightening, citing sluggish growth and limited evidence of broad-based inflation outside of energy.
Pressure is also mounting from weakening business activity. Recent surveys point to a growth slowdown coupled with soaring producer costs, reflecting the impact of the energy shock. In the near term, the direction of GBP/USD will depend on the interplay between rising inflation expectations, the BoE’s stance, and overall risk appetite.
Intraday technical picture:
Locally, the 4H chart shows the pair consolidating below 1.3436 after several false breakouts, which keeps the scenario of a decline within the 1.3208–1.3436 range.
The USD/JPY pair is trading near the top of its multi-year range, as the yen remains under pressure from elevated oil prices and geopolitical instability. The market is currently balancing yen weakness against the looming threat of currency intervention.
Possible technical scenarios:
USD/JPY is consolidating within a narrow range. A move above March highs toward the 160.00 level would likely prompt Japanese authorities to intervene, casting doubt on the sustainability of further gains. As such, range-bound trading between 157.90 and 160.00 is expected to persist.
Fundamental drivers of volatility:
The energy shock remains the primary headwind for the yen. As a major energy importer, Japan faces a worsening trade deficit and deteriorating terms of trade due to rising crude prices. This directly undermines the yen, as the country requires more foreign currency for imports, especially given its dependence on Middle Eastern supply chains.
Monetary policy signals remain mixed. While a BoJ rate hike is expected, markets are pricing in potential delays due to geopolitical uncertainty and fragile economic sentiment. At the same time, oil-driven inflation creates a dilemma for the central bank: the need to address price pressures is complicated by risks to growth, which limits the potential for yen support.
Potential interventions are capping USD/JPY’s upside. As the pair approaches 160.00, expectations of official Japanese intervention heighten, deterring aggressive long positions. Ultimately, the pair’s trajectory is being shaped by the combination of energy-driven yen weakness and market wariness over regulatory action.
Intraday technical picture:
Given the situation on the 4H chart, USD/JPY is recovering within the 157.90–159.68 sideways range, with further room to test its upper boundary.
USD/CAD is nearing the psychological 1.3800 level, driven by ongoing geopolitical uncertainty, volatile oil prices, and shifting expectations for U.S. monetary policy.
Possible technical scenarios:
On the daily chart, the pair has reached the mirror-like dashed resistance level of 1.3799. A reversal from this point could trigger a pullback to support at 1.3744, and potentially lower to 1.3503. Otherwise, a consolidation above 1.3799 could pave the way for a move toward 1.3861.
Fundamental drivers of volatility:
The pair is trending higher as the USD strengthens as a safe-haven asset, while the Canadian dollar loses its footing due to declining oil prices. Investors are closely tracking U.S.-Iran negotiations and Fed signals regarding the future interest rate environment.
Developments in the Middle East continue to support the greenback. Iranian missile strikes on Israel and U.S. bases in Kuwait, Jordan, and Bahrain have heightened global risk perceptions, driving investors toward the dollar as a safe-haven asset. This strengthens the USD against the CAD, which typically suffers during periods of global uncertainty and capital shifts.
Crude oil prices remain a pivotal factor for the Loonie. As a major oil exporter, Canada’s trade balance and export revenues are squeezed when oil prices fall, limiting the CAD’s recovery potential. On Wednesday, oil prices edged lower on hopes of progress in U.S.-Iran talks, which added pressure to the Canadian currency and supported the USD/CAD rally.
U.S. monetary policy is providing additional support to the pair. The Fed has signaled its intent to hold rates steady for now, while rate futures indicate a decreasing likelihood of cuts later this year. Higher-for-longer interest rates enhance the appeal of U.S. assets, bolstering the dollar and maintaining upward pressure on USD/CAD.
Intraday technical picture:
The 4H chart demonstrates USD/CAD at a critical juncture as it tests the dashed resistance at 1.3799. The pair remains caught between a potential pullback to 1.3744 and a continued growth toward 1.3861.
Gold prices advanced on Wednesday as inflation expectations softened. The market found support in falling oil prices and a reassessment of interest rate projections.
Possible technical scenarios:
Gold is recovering within a sideways range between 4375.25 and 4635.63. An upside breakout from this corridor would clear the path for the precious metal toward its next target at 4939.80.
Fundamental drivers of volatility:
Energy market dynamics are currently the main driver of volatility. The drop in oil prices has alleviated fears of further inflationary spikes. Easing energy price pressure reduces the likelihood of central banks having to aggressively maintain high rates, shifting broader market sentiment.
This shift has had an immediate impact on rate expectations and bond yields. Investors have dialed back expectations for Fed hikes, which has boosted gold's appeal; a less restrictive policy stance lowers the opportunity cost of holding the non-yielding metal, driving demand.
While geopolitics remains a source of uncertainty, its impact on gold is currently indirect. Conflicting reports on U.S.-Iran negotiations are swaying oil prices, which then influence inflation expectations and monetary forecasts. Consequently, gold’s movement is primarily driven by rate expectations, while conflict headlines impact prices via the energy sector.
Intraday technical picture:
As we can see on the 4H chart, gold shows some remaining room to test the resistance level of the 4375.25 – 4635.63 range. The next local direction for XAU/USD will hinge on price behavior around the 4635.63 mark.
Oil prices experienced a correction on Wednesday following signals of potential progress in U.S.-Iran negotiations. The market remains exceptionally volatile, caught between hopes for de-escalation and the reality of ongoing supply threats.
Possible technical scenarios:
On the daily chart, Brent continues to hold above the 95.18 level. If this support holds, prices could resume their climb toward 113.99. However, a decisive break and consolidation below 95.18 would open the way for a test of the 85.70 support level.
Fundamental drivers of volatility:
The current price pressure is largely due to ceasefire expectations. Reports of a U.S.-proposed settlement have trimmed the risk premium previously baked into prices due to supply risks. For the market, this implies a potential normalization of transport routes and a reduced threat of long-term deficits, sparking the sell-off.
Despite this, supply fundamentals remain strained. Shipments through the Strait of Hormuz—a vital passage for roughly 20% of the world's oil—are essentially paralyzed, leading to significant volume losses. Even with a partial restoration of maritime traffic, the market understands that production and flow recovery will not be instantaneous without a permanent ceasefire.
Additional uncertainty stems from collateral risks, including attacks on infrastructure, disruptions to Russian exports, and the rerouting of flows. In the short term, oil prices will be dictated by negotiation headlines and the actual status of physical supplies, with the trading range remaining wide due to high geopolitical sensitivity.
Intraday technical picture:
The 4H chart identifies a local support level at 92.25, which could serve as a springboard for a recovery. That being said, if this level gets broken out and confirmed, a move toward the 85.70 target becomes likely.
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