Oil prices corrected sharply after a historic 30%+ rally, yet bullish tendencies still present for oil prices indicate that buyers remain active. The initial surge reflected market worries over the supply side due to the US-Iran war. Easing concerns, including G7 plans to release 400 million barrels and US President Trump signaling a potential earlier end to the conflict, caused a pullback. Still, the ongoing demand shows that oil bulls may regain momentum if supply fears intensify again.
USD slips on easing market worries
The greenback ended Monday in the reds against its counterparts, despite a rally at the opening of the week. It should be noted that the USD continued to slip lower in today’s European and Asian sessions. Overall, the weakening of the USD was related to the easing of the market’s worries and the reduced demand for safe haven instruments, a role that the USD successfully reclaimed in the last few weeks.
We consider the safe haven qualities of the USD as possibly a key driver for the markets at the current stage. Yet we also note that a number of high impact financial releases this week could influence the USD’s direction. With the release of the US employment report for February we shift our attention towards inflation and notte the release of the US CPI rates for February on Wednesday and the release of the US PCE rates for January on Friday, while on Friday we get also the revised US GDP rate for Q4 25.
Xlence Research Team opinion
Overall we see the safe haven qualities of the greenback as the primary factor in deciding its direction currently, hence, should we see market worries intensifying, we may see the USD getting some support, while a possible further easing of the market’s worries could weigh on the greenback.
Oil prices erase historic rally in a single day
Oil prices rallied 30%+ and corrected lower erasing all the gains made in a single day. Yet its interesting that oil prices restarted to rise in today’s Asian and European sessions, in a signal the oil bulls are still present. The market worries for the supply side off the international oil market, given the US war on Iran, may have been the main determinant behind the rally of oil prices. Yet market worries eased considerably, as G7 countries expressed their willingness to release 400 million barrels from their reserves, while US President Trump’s statements for an earlier end to the war in Iran had the same effect.
Xlence Research Team opinion
Should we see the oil market’s worries for its supply side intensifying further we may see oil prices getting additional support and on the contrary should market worries ease or the oil market, we may see oil prices retreating.
US Equity market’s swing with the market moods alterations
US equities retreat initially yesterday yet regained their losses the same day and seem to have stabilised just before the American session starts. The swings in the market sentiment seem to be closely linked with the developments of the war in Iran and the market’s hopes for a possible earlier end of the war, given US President Trump’s statements seem to have allowed for a partial lifting of the market’s worries.
Xlence Research Team opinion
Should we see the market’s worries easing further, we may see US equities advancing further in greener pastures, while should we see the market’s hopes for an earlier peace be disproven and market worries intensifying once again we may see US stock markets retreating further.
Bitcoin and gold remain unaffected
Overall Bitcoin despite some slight bullish tendencies tends to remain relatively stable since yesterday. Similarly gold’s price also tends to remain stable, as if being unaffected by all the turmoil in the fundamentals surrounding the markets, at least for the time being.
Xlence Research Team opinion
We currently maintain a bias for a sideways motion of both gold and Bitcoin and the two trading instruments may require a fundamental shift to change direction.
Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication.
