EUR/USD continues its downward trend, driven by a strengthening dollar and rising inflation concerns linked to surging oil prices.
Possible technical scenarios:
On the daily chart, the EUR/USD pair has managed to climb back above the 1.1494 support level following a recent decline. If this horizontal level holds, a recovery toward the dotted resistance at 1.1682 is possible. Conversely, a drop below 1.1399 would clear a medium-term path downward to the 1.1191 level.
Fundamental drivers of volatility:
Investors are currently in a wait-and-see mode ahead of interest rate decisions from both the Fed and the ECB.
The dollar is gaining support from energy-related factors. Rising oil prices caused by the Middle East conflict have intensified fears of accelerating inflation, leading to a shift in Fed policy expectations. Markets currently anticipate that the regulator will keep rates within the 3.50–3.75% range, while the timeline for the first rate cut is being pushed further back.
On the European front, focus remains on the ECB meeting. The baseline scenario suggests the deposit rate will stay at 2.0% and the main refinancing rate at 2.15%, although some officials have not ruled out further tightening. The futures market is already pricing in a possible rate hike by mid-year, which is providing some support and limiting the euro's decline.
In the short term, however, the balance of risks for EUR/USD remains tilted to the downside. Geopolitical uncertainty and central bank decisions could trigger high volatility, with the pair's future trajectory depending on Fed signals, ECB rhetoric, and developments in the energy market.
Intraday technical picture:
On the H4 chart, EUR/USD has sufficient room to move toward the resistance of the 1.1494–1.1682 range. That being said, upcoming macroeconomic events—specifically the decisions and tone of the ECB and Fed—could force a revision of current price targets.
On Tuesday, GBP/USD is trading without a clear direction. Market participants are sidelined ahead of the Fed and Bank of England decisions, which will serve as the primary drivers for the currency market this week.
Possible technical scenarios:
Given what we see on the daily chart, the GBP/USD pair managed to hold above the 1.3208 support and has started to recover. This upward move may continue toward the 1.3436 resistance. The price's subsequent direction relative to this range will depend on how currencies react to the upcoming Fed and Bank of England meetings.
Fundamental drivers of volatility:
The primary focus is on the Federal Reserve meeting. While the U.S. regulator is expected to leave interest rates unchanged, the tone of the accompanying statement and updated economic projections could significantly impact the dollar's performance. More hawkish rhetoric from the Fed could boost dollar demand and renew pressure on GBP/USD.
For the UK, the Bank of England's policy remains a critical factor. The market consensus points to the rate being held at 3.75%, though the regulator is expected to adopt a less dovish stance than in previous meetings. Reduced expectations for imminent policy easing are providing some support for the pound and limiting the pair's downside.
UK labor market statistics will also serve as a secondary driver for the pound. Forecasts suggest a stable unemployment rate around 5.2%; however, any slowdown in wage growth could weaken the case for maintaining high rates for an extended period. In the short term, GBP/USD remains highly sensitive to central bank signals and macroeconomic data, which may keep volatility elevated.
Intraday technical picture:
Locally, the H4 chart shows technical potential for a price recovery within the 1.3208–1.3436 range. Following this, given the overall downward trend, the pair may pivot back to the downside.
The USD/JPY pair is hovering near the 159.00 mark following its recent climb to yearly highs. That being said, further appreciation is being capped by expectations of key central bank decisions.
Possible technical scenarios:
USD/JPY failed to consolidate above the January highs but remains above the 158.93 level. A move toward 160 yen per dollar carries the risk of currency intervention by Japan. Should the price fall back below 158.93, the pair could weaken toward the 157.90 target. That said, the currency reaction to central bank meetings through the end of the week may lead to a shift in price targets.
Fundamental drivers of volatility:
Investors are showing caution ahead of the Fed and Bank of Japan meetings, which are likely to dictate the direction for USD/JPY.
Fed policy remains the main driver. Markets expect interest rates to remain unchanged, but the focus will be on signals regarding the future rate trajectory. Persistent inflation risks, partly due to rising energy prices, could support hawkish rhetoric and strengthen the dollar against the yen.
As for the yen, focus is on the upcoming Bank of Japan decision. Despite a gradual normalization of policy, the regulator maintains a cautious approach to further tightening. Any signals regarding the timing of the next rate hike could increase volatility in the pair.
Additionally, the possibility of currency intervention by Japanese authorities continues to limit USD/JPY's upside. As the pair approaches the 160 level, intervention fears intensify, prompting market participants to be cautious when going long on the dollar.
Intraday technical picture:
Judging by the current situation on the H4 chart, USD/JPY remains within an uptrend. It is still unclear whether this trend will change as a reaction to upcoming geopolitical and macroeconomic events. The pair's subsequent direction will depend on which side of the 158.93 level the price manages to settle.
The USD/CAD pair is trading with a moderate decline as the Canadian dollar finds support amid a softer U.S. dollar and anticipation of central bank decisions. Investors are maintaining a wait-and-see approach ahead of the Bank of Canada and Federal Reserve meetings.
Possible technical scenarios:
The daily chart shows that USD/CAD has reversed downward from the resistance of the 1.3503–1.3744 sideways range. The pair now has enough room to move toward the lower boundary of this range. However, the reaction of both currencies to central bank meetings and geopolitical developments could lead to updated price targets.
Fundamental drivers of volatility:
A key factor has been Canada's inflation data. Annual CPI growth slowed to 1.8% in February, indicating easing price pressures and supporting expectations that the Bank of Canada will maintain its current policy. Core inflation is also showing a gradual decline, strengthening the argument for a pause in rate changes.
The market's focus is on the upcoming Bank of Canada decision, where the rate is expected to be held at 2.25%. The regulator is facing conflicting factors: on one hand, weaker macroeconomic data—including the labor market—could weigh on the economy; on the other, rising oil prices increase inflation risks while simultaneously supporting the Canadian economy as a major energy exporter.
From the U.S. perspective, the pair's dynamics depend on Fed policy expectations. Markets are gradually scaling back expectations for an early rate cut in the U.S., particularly as rising energy costs could keep inflation sticky. Consequently, comments from the Fed Chair and updated economic forecasts will be crucial signals for USD/CAD.
Intraday technical picture:
Given the unfolding scenario on the H4 chart, USD/CAD is retreating from the resistance of the 1.3503–1.3744 range. This downward move may occur with intermittent pullbacks.
Gold prices are demonstrating a moderate increase on Tuesday, holding above the $5,000 per ounce mark due to increased demand for safe-haven assets. The primary driver is the escalation of geopolitical tensions in the Middle East.
Possible technical scenarios:
Gold prices have pulled back toward the support of the 4,939.80–5,348.71 sideways range. If the psychological level of $5,000 per ounce holds as support, a recovery within the current range is highly likely.
Fundamental drivers of volatility:
The escalation of the conflict between Iran and its enemies has heightened global uncertainty and bolstered demand for gold as a hedge. Recent Iranian strikes on UAE territory and disruptions to oil infrastructure have raised concerns about energy supply stability, which also supports commodity asset prices.
However, gold's growth remains constrained by monetary factors. The sharp rise in oil prices intensifies inflation risks, forcing investors to reassess expectations for U.S. interest rate cuts. High interest rates increase the opportunity cost of holding gold, as it does not yield interest.
Markets are also exercising caution ahead of the Federal Reserve's decision. While the consensus is for rates to remain unchanged, the regulator's rhetoric and updated inflation and economic forecasts will be key. Additionally, investors are awaiting decisions from other major central banks—the ECB, BoE, and BoJ—which could influence global capital flows and the performance of precious metals.
Intraday technical picture:
As evidenced by the unfolding scenario on the H4 chart, gold is currently holding above $5,000 per ounce. That said, a drop below the 4,878.26–4,939.80 zone would open the path for quotes to reach the 4,635.63 level.
Brent crude oil prices are recovering on Tuesday following a sharp decline in the previous session. The market remains highly volatile as investors weigh the risks of supply disruptions amid the ongoing Middle East conflict.
Possible technical scenarios:
The Brent daily chart’s situation suggested that the price has consolidated above the 95.18 level, which opens the way for growth toward the 133.99 level.
Fundamental drivers of volatility:
The primary driver of the upward movement is escalating geopolitical tension. New Iranian attacks on targets in the UAE—including a fire at the Port of Fujairah and the suspension of operations at key energy facilities—have heightened fears regarding the stability of oil supplies from the region. A significant contributing factor to supply pressure is the near-total closure of the Strait of Hormuz, a critical transit route for approximately 20% of global oil and LNG supplies.
Disruptions to shipping through the strait are fueling concerns of a market deficit. Reduced production in the UAE and export infrastructure outages are already limiting available supply, pushing Middle Eastern crude grades to record levels. Even isolated tanker incidents or further attacks on infrastructure could trigger sharp price volatility.
However, the market is finding some relief through potential measures to stabilize supply. There are ongoing discussions regarding an additional release of strategic petroleum reserves by International Energy Agency (IEA) member countries, which could mitigate short-term deficit risks. Overall, market participants continue to closely monitor the duration of the conflict and the state of transport infrastructure in the Persian Gulf, as these factors will define oil price dynamics going forward.
Intraday technical picture:
As we can see on the Brent H4 chart, following consolidation above the 95.18 level, there is also room for the price to grow toward the 113.99 level.
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