Oil Prices Surge On Geopolitical Uncertainty

* Ceasefire talk between Israel and Hamas on halt heightened geopolitical uncertainty in the region.

* Initial Jobless Claims came lower-than-expected fuels U.S. dollar strength.

* BTC traded above the $45000 level for the first time since the BTC ETF was approved.

Fundamental Overview

Crude oil prices experienced a notable ascent of over 3% in the preceding trading session, primarily attributed to the deepening geopolitical tensions in the Middle East. The trajectory of ceasefire negotiations took a pessimistic turn as Israeli Prime Minister Benjamin Netanyahu rejected the proposed Gaza deal, characterising it as “delusional.” This heightened geopolitical uncertainty in the Middle East concurrently stimulated an increased demand for the safe-haven asset, gold.

Concurrently, the U.S. dollar exhibited resilience, maintaining its strength above the $104 threshold. This robust performance is underpinned by a steadfast economic trajectory in the United States, coupled with unwaveringly hawkish statements from various Federal Reserve officials.

In parallel, Bitcoin (BTC) exhibited notable strength, surpassing the $45,000 mark for the first time subsequent to the Securities and Exchange Commission’s approval of the BTC Exchange Traded Fund (ETF). The initial market sentiment, characterised by a “sell on news” approach, gradually dissipated. Notably, the demand for BlackRock and Fidelity ETFs played a pivotal role in fortifying the position of the largest cryptocurrency.

---

Current rate hike bets on 20th March Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (81%) VS -25 bps (19%)  

Economic Calendar

(MT4 System Time)

Source: MQL5  

Market Movements

DOLLAR_INDX, H4

The Dollar Index has retained its position above the pivotal 104 level, indicative of sustained bullish momentum. Heightened speculation regarding the Federal Reserve’s potential commitment to prolonged elevated interest rates as a measure to counteract inflation has driven a shift in market sentiment, propelling the dollar to higher echelons in the recent trading session.

As of the latest assessment, the Dollar Index continues to trade along trajectories surpassing the 104 level, underscoring an enduring bullish bias. The Relative Strength Index (RSI) maintains its position in the upper region, indicating the prevailing strength of the bullish trend. Meanwhile, the Moving Average Convergence Divergence (MACD) exhibits a slight descent but teeters on the cusp of crossing before descending below the zero line, hinting at the potential formation of a bullish momentum. These technical indicators collectively suggest a noteworthy bullish sentiment in the current market environment.

Resistance level: 104.60, 105.65

Support level: 103.85, 103.05

---

GOLD，H4

Gold prices exhibited a wide range of fluctuations last night, responding to shifts in market sentiment. Initially impacted by a strengthened dollar amid a more hawkish outlook for the Fed’s monetary policy, gold experienced volatility. However, the dynamics changed with a reversal in the ceasefire talks related to Middle East tensions, leading to renewed demand for the safe-haven commodity.

Despite the wide range of fluctuations, gold prices have not committed to a definitive directional trend, maintaining a sideways trajectory. Technical indicators reflect this indecision, with the Relative Strength Index (RSI) hovering near the 50 level, indicative of a neutral market sentiment. Simultaneously, the Moving Average Convergence Divergence (MACD) lingers in close proximity to the zero line, providing a neutral signal for gold. This confluence of factors underscores the current state of indecisiveness in the gold market.

Resistance level: 2050.00, 2088.00

Support level: 2020.00,  1992.00

---

CL Oil, H4:

Crude oil prices exhibited strength despite a strengthened U.S. dollar, propelled by geopolitical uncertainty. Ceasefire discussions in the Middle East took a negative turn as the Israeli Prime Minister rejected the deal proposed by Hamas, deeming it delusional.

Oil prices are trading higher and have broken above their strong resistance level at near 75.2 levels, suggesting a bullish bias for oil prices. The RSI is on the brink of breaking into the overbought zone while the MACD has broken above the zero line and is diverging, suggesting the oil prices are trading with strong bullish momentum. 

Resistance level: 78.60,  81.20

Support level: 75.20, 71.35