USD/CHF rose for a fifth consecutive session on Monday, gaining more than 0.14%. The pair moved towards 0.8000 for the first time since mid January. The rally pushed USD/CHF above the 200-day simple moving average (SMA) at 0.7945. This shift leaves 0.8000 as the next level to watch.

Key Levels To Watch

A break above 0.8000 could bring a descending resistance line into view at about 0.8040–0.8055, drawn from the August 2025 highs. If that gives way, the next upside level is 0.8124, the 5 November swing high. If the pair slips back below 0.8000, attention may return to the 200-day SMA at 0.7945. Further weakness would put the 100-day SMA at 0.7889 in focus. The Relative Strength Index (RSI) indicates strong upward momentum. It is close to overbought conditions but remains below 80. Looking back from our perspective today, the bullish signals we saw for USD/CHF in late 2025 and early 2026 were clearly the start of a major trend. The break of the 200-day moving average at that time was a key turning point. That momentum has carried the pair significantly higher than the 0.8100 levels that were once seen as distant targets.

Fundamental Drivers Ahead

The fundamental picture strongly supports further upside for the dollar against the franc. The Swiss National Bank just cut its key interest rate to 1.25% last week, becoming the first major central bank to ease policy this cycle as Swiss inflation fell to a two-year low of 1.2%. This policy divergence is a powerful driver for the currency pair. Conversely, the U.S. Federal Reserve is holding firm after February’s inflation data came in hotter than expected at 3.3%. We see that markets have now priced out any chance of a rate cut before the September 2026 meeting, according to the CME FedWatch Tool. This interest rate differential between the U.S. and Switzerland is widening, making the dollar more attractive. For traders using derivatives, this environment is favorable for strategies that profit from a continued, steady rise in USD/CHF. We believe buying call options with strike prices around 0.9250 and 0.9300 for the coming months offers a clear way to participate in the expected upward move. This allows for defined risk while capturing potential gains from the strong trend. Given the clear policy divergence, constructing bull call spreads could also be an efficient strategy. This involves buying a call option and selling another at a higher strike price to reduce the initial cost of the trade. Implied volatility has been climbing, so this approach helps mitigate the higher premium costs while targeting a specific upside range. Create your live VT Markets account and start trading now.

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Asia’s bond markets have moved in different ways during the current geopolitical shock, with varying levels of vulnerability across countries. The analysis compares yield moves and volatility across several Asian markets. India and Indonesia have seen bond yields rise, but the increases have been smaller than those seen in Western markets. South Korea’s bond yields show higher stress and greater volatility.

Regional Divergence And Relative Value

China’s bond market is described as supported by multiple buffers, even though China is a major importer of fuel from the Middle East. Singapore is described as continuing to attract safe haven flows, even if yields may have reached a low point. The article notes it was produced using an artificial intelligence tool and reviewed by an editor. Given the recent geopolitical shock, we are seeing Asian bond markets move in different directions, which presents clear opportunities for derivative traders. The divergence we saw building through 2025 is now accelerating, meaning a single strategy for the whole region will not work. Traders should focus on relative value trades that profit from the widening performance gaps between these countries. For higher-yielding markets like India and Indonesia, the response has been muted compared to the West. Indian 10-year yields have climbed to around 7.5%, but this is a far cry from the dramatic spikes in US Treasuries. This suggests using options to hedge against further, but limited, yield increases rather than taking on aggressive short positions. South Korea’s market, however, is flashing warning signs with significant volatility. Given its export-driven economy, the implied volatility on Korean Won currency options has jumped from 8% to 14% in the last month alone. This makes buying options, such as straddles or strangles, a direct way to trade the expected large moves without picking a specific direction.

Positioning For Volatility And Safe Haven Flows

In contrast, China is acting as an anchor of stability, with its 10-year government bond yield holding steady around 2.4%. This insulation makes Chinese government bond futures a potential long position in a pairs trade against a short position in more volatile Korean bonds. The stability also suggests opportunities in selling covered calls against Chinese bond ETFs for income. Singapore remains the region’s primary safe haven, with inflows pushing the Singapore Dollar up 2% against a trade-weighted basket this quarter. Although Singapore bond yields may have bottomed at 3.1%, the strong currency outlook is the main play here. We see traders using long positions on the Singapore Dollar to fund purchases of higher-yielding, but relatively stable, assets elsewhere in the region. Create your live VT Markets account and start trading now.

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The US Dollar Index (DXY) rose to about 100.50 and was set for a fifth straight daily rise after hawkish comments from US President Donald Trump on Iran. EUR/USD fell to around 1.1460, a one-week low, while GBP/USD dropped to a three-month low of 1.3174. USD/JPY ended a four-day winning run and traded near 159.60 as demand for the Yen increased at times. AUD/USD slid to a two-month low near 0.6850, while the Reserve Bank of Australia prepared for its next meeting with a cautious but hawkish stance.

Commodities And Safe Havens

WTI crude traded near $103.20 a barrel after four consecutive daily gains linked to Iran keeping the Strait of Hormuz closed. Gold traded near $4,515, supported by safe-haven demand despite a firmer Dollar. Data due from Tuesday to Friday includes Eurozone retail sales, CPI, HICP and unemployment, plus Canada GDP and several US releases such as consumer confidence, JOLTS job openings, ADP, ISM PMI and nonfarm payrolls. Other releases include Japan’s Q1 Tankan and China’s March PMIs. WTI is a US crude benchmark from Cushing, and its price is driven by supply and demand, geopolitical disruption, OPEC output and the US Dollar. API and EIA stock reports are released on Tuesday and Wednesday; their results are within 1% of each other 75% of the time, and OPEC has 12 members. Looking back at the market sentiment this time last year, in March 2025, we saw a potent mix of a strong US Dollar and high geopolitical risk. The Dollar Index was climbing towards 100.50, and oil was over $103 a barrel due to tensions with Iran. This environment of risk aversion is a critical reference point for our current strategies.

Strategy Considerations For This Week

Today, the US Dollar Index is trading even higher, recently hitting a yearly high of 104.55 as the Federal Reserve has maintained a hawkish stance throughout the past twelve months. Looking at the situation in 2025 reminds us that betting against dollar strength has been a losing trade. With another round of key US jobs data, including Nonfarm Payrolls, landing this Friday, we should remain cautious about positioning for any significant dollar weakness. WTI oil prices, which were surging a year ago, have since stabilized around $85 per barrel after diplomatic channels eased the situation in the Strait of Hormuz in late 2025. This demonstrates how quickly geopolitical premiums can evaporate from energy prices. Given this volatility, buying out-of-the-money call options on WTI could serve as a cheap and effective hedge against any unexpected flare-ups in global hotspots. Gold’s performance is particularly noteworthy, as it was holding firm near $4,515 last year despite a strong dollar, and it has since climbed to over $4,700 an ounce. This breaks the typical inverse correlation, largely fueled by record central bank purchases throughout 2025, which saw them add over 1,050 metric tonnes to their reserves. This sustained demand suggests gold’s role has shifted, making it a core holding for hedging against both inflation and systemic risk, rather than just a simple anti-dollar play. Last year’s weakness in EUR/USD and GBP/USD has only intensified, with EUR/USD now struggling to hold the 1.0500 level and GBP/USD below 1.2200. The European Central Bank’s more dovish pivot in the second half of 2025, contrasted with the Fed’s policy, has driven this divergence. We should therefore view any strength in these pairs as an opportunity to initiate short positions, especially with preliminary Eurozone CPI data coming this week. The market has a number of key data releases scheduled, including US Consumer Confidence and Friday’s labor market report. A year ago, we saw how geopolitical headlines could overshadow economic data. While the current environment seems calmer, we should use options to protect against the volatility these high-impact numbers can create, as any surprise could quickly shift market sentiment. Create your live VT Markets account and start trading now.

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WTI held above $100 per barrel on Monday, with a swing to near $101 and a dip below $98 before rebounding about 1.15% mid-session. Brent traded above $115. Price moves followed posts from President Trump about “serious discussions” with a new regime in Tehran, then threats to target Iran’s power plants, oil wells and Kharg Island if the Strait of Hormuz is not reopened. Iran’s Foreign Minister Abbas Araghchi said no talks have happened and none are planned.

Geopolitical Risk And Oil Price Reaction

Yemen’s Houthi movement fired missiles at Israel, raising risks around the Bab el-Mandeb Strait. The Strait of Hormuz remains effectively closed, and it normally carries about 21% of global oil consumption; Goldman Sachs puts the risk premium at $14 to $18 per barrel. Hormuz closures since early March are estimated to have removed 17.8 million barrels per day from normal flows, alongside Iraq force majeure on foreign-operated oilfields. OPEC+ has signalled no output rises before Q3 2026, while a 400 million barrel emergency release has not removed the deficit. The EIA projects Brent above $95 near term, then about $80 in Q3 and around $70 by year-end if the conflict ends and Hormuz reopens; WTI rose about 48% in March. The Fed held rates at 3.50%–3.75% on 18 March, signalled one cut in 2026, while CME FedWatch shows no cuts for the rest of 2026 and an 80% chance of a hold in April. Trump set an April 6 deadline for Hormuz to reopen, after a 10-day extension. Kharg Island handles roughly 90% of Iran’s oil exports; Goldman Sachs said prolonged closure could see Brent test the 2008 high near $147, while Wednesday’s EIA report is expected to show a 1.2 million barrel draw after last week’s build. With WTI crude holding above $100 per barrel, volatility is the primary factor to trade around. We can see this reflected in the CBOE Crude Oil Volatility Index (OVX), which has been trading above 55, levels that are historically high and signal extreme market uncertainty. For derivative traders, this means option premiums are incredibly expensive, making outright purchases of calls or puts a costly bet. The extreme headline risk from Washington and Tehran is creating a pronounced positive skew in the options market. This means call options, which bet on prices rising, are significantly more expensive than put options an equal distance from the current price, as the market fears a sudden upward spike more than a collapse. We last saw this kind of skew develop during the initial weeks of the conflict in Ukraine back in 2022, just before WTI surged toward $120.

Trading Approaches Under Elevated Volatility

The upcoming April 6 deadline is a classic binary event, forcing a difficult decision on how to position. A diplomatic breakthrough could erase the $14 to $18 war premium almost overnight, while an attack on Kharg Island could trigger a move toward the $115 level. Given the high cost of options, using vertical spreads like bull call spreads or bear put spreads allows for a directional view with a defined risk and lower upfront cost. On the supply side, the de facto closure of the Strait of Hormuz has taken a significant amount of oil off the market, a situation which strategic reserve releases have failed to fix. Looking back, we saw a similar, though less severe, supply shock in the third quarter of 2019 after attacks on Saudi facilities, which caused Brent to gap up nearly 20% in a single day. The current disruption is far more prolonged and significant, supporting the market’s underlying strength. We must also consider the macro-economic backdrop, as the Fed is essentially sidelined by this energy-driven inflation. With the CME FedWatch Tool showing a near-zero probability of a rate cut in 2026, high energy prices are fueling the stagflation narrative. The weak February jobs report from last month, showing only 92,000 jobs created, highlights the economic fragility that Powell is trying to manage. For the immediate term, traders should watch the key technical levels as guides for intraday positioning. The daily chart shows strong support around the $95-$96 area, which could be a level to consider selling puts or establishing bullish positions if the market pulls back without a fundamental resolution to the conflict. A decisive close above the $101 mark would signal that the market is beginning to price in a failure of diplomacy ahead of the April 6 deadline. Create your live VT Markets account and start trading now.

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CEE currencies face pressure as higher oil prices and geopolitical tension add to expectations for central bank rate rises. Markets are described as moving into a risk-off mood, with further strain on rate hike pricing. Data due this week is expected to show the effect of the global energy shock through higher inflation and flatter yield curves. This mix is expected to weigh on CEE foreign exchange.

Key Data Releases This Week

Poland’s March inflation data is expected on Tuesday, with a rise from 2.1% to 3.5% year on year. That would be above market expectations and near levels seen in mid-year last year. CEE March PMI figures are due on Wednesday. They are not expected to fully reflect the US-Iran conflict, though the risk is described as skewed lower than market expectations. Turkey’s inflation data is due on Thursday, with a projected slowdown from 3.0% to 2.2% month on month. Year-on-year inflation is expected to rise from 31.5% to 32.2% after the fuel shock. We are seeing markets open with a risk-off mood in the CEE region, driven by geopolitical headlines and further pressure on central bank rate hike pricing. With Brent crude now hovering above $95 a barrel, the highest this year, we expect this energy shock to weigh on regional assets. This environment suggests being cautious on CEE currencies through the coming weeks.

Implications For Cee Currencies

This pressure supports further yield curve flattening and places a burden on currencies like the Polish Zloty and Hungarian Forint. We believe the market’s pricing of future rate hikes will be tested, especially as persistent inflation forces central banks to maintain a hawkish stance despite slowing growth. The recent hawkish hold from the National Bank of Poland underlines this difficult balancing act. Attention now turns to the March inflation figures for Poland, which will be released this week. After February’s data surprised to the upside, coming in at 5.1% YoY, we anticipate another high print that will fuel expectations for more tightening and pressure the PLN. This trend is a significant acceleration from the more moderate inflation levels we saw for much of 2025. Looking at the broader region, the latest manufacturing PMI numbers for February were already showing contraction, with readings below 50 for Poland, Hungary, and the Czech Republic. The ongoing energy price shock suggests the March PMIs, due shortly, will likely reflect a further downside risk to economic activity. This stagflationary pressure is a clear negative for the region’s currencies. In Turkey, the situation remains acute as we await this week’s inflation data. With year-on-year inflation already running above 65%, a figure confirmed by recent data from the Turkish Statistical Institute, any further fuel price impact will only worsen the outlook. This continues to create extreme downward pressure on the Turkish Lira. Create your live VT Markets account and start trading now.

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Sterling fell on Monday as tensions in the Middle East supported the US Dollar. Oil prices extended gains for a fourth straight trading day. GBP/USD dropped to 1.3180 and was trading at 1.3184 at the time of writing. The pair was down by more than 0.50%.

Central Bank Paths Diverge

We remember when geopolitical flare-ups sent GBP/USD spiraling down towards 1.3180, as the US dollar benefited from a flight to safety. Today, the market is less focused on sudden shocks and more on the diverging paths of central banks. Oil, currently stable around $85 a barrel, is not the primary driver it was during that past volatility. In the UK, inflation remains stubborn, with the latest figures showing a 2.8% annual rate, which is still well above the Bank of England’s target. This has forced the BoE to maintain a hawkish stance, holding rates steady at 4.5% at their last meeting. Consequently, we see underlying support for the Pound that was absent during previous risk-off events. Across the Atlantic, the story is different as US inflation has cooled more convincingly to 2.5%. This has shifted the Federal Reserve’s narrative, with markets now pricing in a greater than 50% chance of a rate cut by the summer. This policy divergence is the main theme currently weighing on the dollar and supporting GBP/USD, which now hovers around 1.2550. For derivative traders, this suggests a period of managed upside for GBP/USD rather than a sharp breakout. The uncertainty around the exact timing of central bank moves means implied volatility in cable options is elevated. We should therefore look at strategies that benefit from our bullish bias while also selling that expensive volatility. Selling out-of-the-money GBP/USD puts could be an effective strategy to collect premium while expressing the view that the downside is limited. Alternatively, a bull call spread would define our risk while targeting a move towards the 1.2700-1.2800 range in the coming weeks. This allows us to profit from a gradual appreciation in the pound.

Risk Management Considerations

However, we must remain vigilant to the kind of Middle East tensions that drove the dollar higher previously. A sudden spike in risk aversion could quickly unwind this central bank-driven trade. Hedging long positions with short-term puts remains a prudent measure against such a reversal. Create your live VT Markets account and start trading now.

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NZD/USD traded near 0.5715 on Monday, down 0.60%, after dropping to about 0.5700, its lowest level since November. The move came as the US Dollar strengthened in a cautious market. The US Dollar gained on risk aversion linked to the conflict involving the US and Iran. On Monday, US President Donald Trump said the US was in “serious discussions” with what he called a “new and more reasonable regime” in Iran, while also warning of possible strikes on Iran’s energy infrastructure if talks fail and if the Strait of Hormuz is not reopened.

Drivers Of Recent Nzdusd Weakness

Geopolitical concerns have added to worries about global oil supply, and higher oil prices have supported the US Dollar because crude is mostly priced in USD. The US Dollar Index (DXY) was near 100.54, close to ten-month highs reached earlier this month. Federal Reserve Chair Jerome Powell said policy is “in a good place to wait and see” while assessing effects from recent events. He repeated the aim of returning inflation to 2% and noted supply shocks can complicate the outlook. CME FedWatch shows markets now expect rates to stay unchanged through this year. Traders are watching New Zealand’s ANZ surveys on Tuesday and China’s March PMI data later this week. Given the sharp fall in the NZD/USD we observed in late 2025 and early 2026, the dominant theme remains US dollar strength. This strength is fueled by ongoing geopolitical risks in the Middle East and a Federal Reserve that appears locked into a higher-for-longer interest rate policy. For the coming weeks, we should anticipate this trend to persist.

Option Strategy And Risk Management

The data released since those events has supported this view. The latest ANZ Business Confidence survey from earlier this month showed a dip to -21.5, suggesting New Zealand’s domestic economy remains fragile. Furthermore, China’s official manufacturing PMI for March came in at a lukewarm 49.9, signaling that the engine for New Zealand’s commodity exports is not yet firing on all cylinders. This environment suggests that buying put options on the NZD/USD is a straightforward way to position for further downside. We should look at strikes around the 0.5600 level with expirations in May or June 2026 to allow time for the position to work. These options provide a defined risk while offering significant upside if the pair continues its decline. The geopolitical situation with Iran creates high uncertainty, which we can see reflected in elevated implied volatility in currency options. Looking back at the market reaction to the onset of the Ukraine conflict in 2022, we remember how a flight to safety can rapidly strengthen the dollar and crush risk-sensitive currencies. The DXY pushed well above 110 back then, and while we aren’t there yet, it shows the potential for this move. We must also watch for any signs of de-escalation between the US and Iran, as any peaceful resolution would likely cause a sharp reversal. A sudden drop in oil prices would remove a key pillar of support for the US dollar, causing risk-on currencies like the Kiwi to rally hard. Therefore, setting clear stop-losses on any short positions is crucial to manage the risk of a sudden shift in sentiment. Create your live VT Markets account and start trading now.

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GBP/USD fell to a four-month low on Monday, trading near 1.3184–1.3188 and down by more than 0.50%. Middle East tensions supported the US Dollar, while oil prices rose for a fourth straight session, adding to demand for safer assets. US President Donald Trump said Iran’s current regime seems “reasonable”, but warned the conflict could escalate if the Strait of Hormuz is not opened after 3,500 troops arrive in the region. Worries about economic damage led traders to scale back expectations for tighter US policy and raise the chance of a Federal Reserve rate cut by the end of 2026.

Fed Policy And Inflation Outlook

Fed Chair Jerome Powell said there is tension between the dual mandate goals and repeated an aim to return inflation to 2% on a “sustained basis”. He said tariff-related inflation likely added 0.5% to 1% to inflation and may be a one-time effect, while long-term expectations remain in check. In the UK, reliance on imported natural gas adds exposure to higher energy costs, alongside inflation above the Bank of England’s target. Data showed business activity at a six-month low, manufacturers’ input costs rising at the fastest pace since 1992, and retail sales falling, with Q4 2025 GDP expected to hold at 1%. On charts, resistance is seen at 1.3330, then 1.3410 and 1.3435. Support sits at 1.3188, then 1.3100 and 1.3035, with price below moving averages near 1.3500. Looking back to late 2025, we saw the Pound break down against the Dollar as Middle East tensions created a flight to safety. The move below the key 1.3500 level confirmed a bearish trend. This set a clear negative tone for GBP/USD heading into the new year. The geopolitical fears did cause oil prices to spike, with Brent crude briefly touching $92 per barrel in January 2026, though tensions have since eased. More importantly, the economic data has validated the initial weakness in Sterling. UK inflation for February 2026 remained elevated at 3.9%, well above the Bank of England’s target and constraining its policy options.

Trading Strategy And Market Positioning

This environment was perfect for traders who bought put options on GBP/USD, using the uncertainty to their advantage. The slide through the 1.3200 level triggered further technical selling, benefiting those with short positions in the futures market. The initial move was driven by headlines, but the follow-through was all about weak fundamentals. Now, the divergence between the US and UK economies is the main story. The latest US jobs report showed another strong 230,000 positions added, and the Federal Reserve has signalled it will hold interest rates steady through the second quarter. In contrast, the UK’s Office for Budget Responsibility just revised its 2026 growth forecast down to 0.8%, citing weak consumer demand. For the coming weeks, we believe selling rallies in GBP/USD remains the primary strategy. Selling call option spreads with May expirations above the 1.3300 resistance level could provide income while limiting risk. The fundamental picture does not support a sustained recovery for the pound. This pattern is very similar to what we observed in 2022 when the energy crisis exposed the UK’s economic vulnerabilities. Back then, the fundamental weakness led to a multi-month downtrend that pushed GBP/USD to historic lows near 1.0300. It serves as a reminder that when central bank policies diverge this sharply, the trend can be powerful and long-lasting. Create your live VT Markets account and start trading now.

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US shares rose on Monday, with the Dow up about 415 points after last week’s drop. The S&P 500 gained 0.5% and the Nasdaq added 0.3%, with the Dow moving from near 45,100 to above 45,600 and then just over 45,500. All three indices came into the session after five straight weekly falls, with the Dow and Nasdaq entering correction territory last week. The move followed comments from President Donald Trump about discussions on ending the war with Iran.

Markets React To Iran Talks

Trump said talks were under way and warned the US could target Iranian power plants, oil wells, and Kharg Island if a deal is not reached and the Strait of Hormuz is not reopened. Reports on Sunday said Tehran accepted most of a 15-point US plan and would allow 20 Pakistani-flagged tankers through over 10 days. Oil prices rose, with Brent above $112 a barrel and WTI above $102, up about 2%. The Strait of Hormuz remained constrained, and the US deficit was noted at 6%. Fed Chair Jerome Powell said the current rate stance is appropriate, after the FOMC held at 3.50%–3.75% on 18 March. The median view still points to one 25 basis-point cut in 2026, while the PCE inflation forecast rose to 2.7% from 2.4%. Data due include consumer confidence and JOLTS at 6.87 million versus 6.946 million. ADP is seen at 40K versus 63K, retail sales at 0.4% after -0.2%, ISM prices paid at 73.5 versus 70.5, jobless claims at 212K, and NFP at 55K after -92K, with earnings at 0.3% and unemployment at 4.4%. The market’s rebound is built on fragile hopes of a deal with Iran, and we should treat it with caution. Any setback could easily reverse these gains, making this a prime environment for buying volatility. We are looking at strategies like long straddles on the SPX, positioning for a sharp move rather than betting on a specific direction.

Energy Volatility And Hedging

With Brent crude over $112, the energy market is the epicenter of risk. Given that around 20% of the world’s oil supply passes through the Strait of Hormuz, any news will trigger oversized moves in crude prices. We are using options on energy ETFs to protect against, or profit from, a potential price spike if talks falter. The Federal Reserve is signaling it will tolerate this oil-driven inflation to avoid crushing a slowing economy, a stance that was common after the 2025 slowdown. This divergence between a patient Powell and a dovish Miran creates uncertainty around future interest rate policy. This week’s job-opening data could embolden the rate-cut camp, shifting expectations for the second half of the year. All eyes are on Friday’s Nonfarm Payrolls report, which will be released while markets are closed for Good Friday. After last month’s surprise negative print of -92K, another weak number like the 55K consensus could force traders to re-price rate cut expectations over the long weekend. Historically, back-to-back weak payroll reports have often preceded significant market downturns, a pattern we saw in 2025. The expected drop in Tuesday’s JOLTS data to 6.87 million job openings supports the view of a rapidly cooling labor market, continuing the sharp decline from over 8.5 million openings a year ago. While the 4.4% unemployment rate seems manageable, its steady rise from the lows below 4% seen last year is a classic late-cycle indicator. We are watching this trend closely as it will likely dictate the Fed’s actions later this year. Create your live VT Markets account and start trading now.

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Gold (XAU/USD) pared earlier gains on Monday amid Middle East tensions and changing rate expectations. It traded near $4,550 after a European-session high around $4,580 and an intraday low near $4,420. Gold initially rose as US Treasury yields pulled back from multi-month highs, though yields stayed elevated overall. The US Dollar edged higher, limiting further gains.

Market Forces Driving Gold

Markets reassessed the Federal Reserve outlook after oil-driven inflation concerns raised the chance of rate hikes later this year. The focus then shifted to growth risks from high energy prices, and the CME FedWatch Tool shows expectations for rates to stay at 3.50%–3.75% through 2026. Gold was down nearly 15% from its March peak of $5,419 and was set to end a seven-month winning streak in March. Jerome Powell said policy is “in a good place” to wait, while keeping a 2% inflation target. The US-Israel war with Iran intensified, with Iran-backed Houthis launching missile and drone attacks on Israel. Risks included possible Red Sea shipping disruption and reduced oil flows through the Strait of Hormuz. Donald Trump said talks made “great progress” and a deal will “probably” be reached, while warning of strikes on infrastructure, oil wells and Kharg Island if talks fail. Reports also cited preparations for weeks of ground operations and deployment of thousands of US troops.

Key Data And Technical Levels

This week’s focus includes the March Manufacturing PMI and the Nonfarm Payrolls report. Technically, price moved towards the 100-day SMA, with RSI near 40 and MACD still negative; resistance sits near $4,633 then $4,958, while support is $4,400–$4,300 and the 200-day SMA near $4,123. We are seeing gold get pushed and pulled by two major forces: the fear of a wider war in the Middle East and the reality of high US interest rates. This conflict creates a volatile trading environment where big price swings are likely. Given that gold has already dropped nearly 15% from its peak earlier this month, traders should be cautious about picking a firm direction. The escalating US-Iran conflict, now involving Houthi attacks, provides a strong reason for owning upside protection in gold. Any failure in the current negotiations could trigger a flight to safety, similar to the spike we saw in late 2025 when the conflict first broadened. Buying call options with strike prices above the 50-day moving average near $4,958 could be a cost-effective way to position for a sudden geopolitical flare-up. On the other hand, the Federal Reserve’s commitment to holding interest rates steady presents a significant headwind for non-yielding gold. The CME FedWatch tool shows virtually no expectation of a rate cut in 2026, reinforcing the high opportunity cost of holding the metal. This suggests that selling call options or establishing bear call spreads could be profitable if economic data remains strong and gold fails to break key resistance. Recent economic numbers support the Fed’s patient stance, as the latest February Consumer Price Index (CPI) report showed inflation still stubbornly above 3%. This week’s Nonfarm Payrolls report will be critical, as a strong jobs number would likely strengthen the US Dollar and put further pressure on gold prices. Therefore, traders should be prepared for a potential move down toward the support zone around $4,300 if the data comes in hot. Technically, the bounce from the 200-day SMA is encouraging, but momentum indicators are not yet confirming a strong new uptrend. This suggests trading the range could be the most prudent approach in the immediate future. Strategies that profit from volatility, such as a long straddle, could be effective, especially going into this week’s major economic data releases. The current market uncertainty is reflected in rising options premiums, with the Gold Volatility Index (GVZ) climbing to over 22, its highest level this year. This environment rewards those who can correctly anticipate a breakout from the current range defined by key moving averages. Be ready to act if the price decisively breaks above the 100-day SMA at $4,633 or below the recent lows near $4,400. Create your live VT Markets account and start trading now.

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