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Global markets opened the week with major currencies holding firm as continued US Dollar weakness reshaped momentum across FX markets. The Swiss Franc advanced amid concerns surrounding the US debt outlook and increased Treasury bond buybacks, while Sterling remained close to recent highs and the Euro held steady against the Greenback. The Canadian Dollar faced competing forces from US-Canada trade tensions and a softer USD, while WTI crude slipped below $85.00 as traders took profits ahead of new US sanctions on Iran. With fiscal concerns, trade policy and geopolitical developments all in focus, markets remain sensitive to any catalyst capable of changing the Dollar’s current trajectory.
WTI crude oil slipped below $85.00 as traders locked in profits following its recent advance. Markets are also positioning ahead of new US sanctions targeting Iran, with uncertainty surrounding their potential impact on Iranian supply and global energy flows keeping volatility elevated.
• US-Iran Relations: New US sanctions could increase pressure on Iranian crude exports and support supply-risk premiums.
• Profit-Taking: Recent gains encouraged traders to reduce positions, contributing to the latest pullback.
• Supply Risks: Any disruption to Iranian exports or regional shipping routes could quickly tighten sentiment.
• US Dollar: Continued Dollar weakness could provide underlying support for Dollar-denominated commodities.
• Global Demand: Traders continue to balance geopolitical supply risks against the broader demand outlook.
• Trend: Neutral to Bullish
• Resistance: $85.50
• Support: $83.50
• Forecast: WTI could consolidate below $85.00 following the recent profit-taking. However, uncertainty surrounding new US sanctions on Iran may keep downside pressure contained, with renewed supply concerns potentially allowing buyers to challenge $85.50 again.
• Market Sentiment: Cautiously bullish despite the near-term pullback.
• Catalysts: US sanctions on Iran, Middle East developments, crude inventories, OPEC+ signals and global demand expectations.
The Canadian Dollar remained caught between competing fundamental forces. US-Canada trade tensions continued to create downside risks for CAD, but persistent US Dollar weakness prevented sellers from gaining stronger control. Changes in crude oil prices added another layer of uncertainty for the commodity-linked currency.
• US-Canada Trade Relations: Trade-war concerns remain a significant headwind for the Canadian economy and CAD.
• US Dollar: Continued Greenback weakness is limiting upside pressure on USD/CAD.
• Oil Prices: The retreat in WTI could reduce some support for the Canadian Dollar.
• Fed Expectations: Softer expectations surrounding US monetary policy continue weighing on USD.
• Bank of Canada: Relative Fed-BoC rate expectations remain important for the pair.
• Trend: Neutral
• Resistance: 1.3900
• Support: 1.3800
• Forecast: USD/CAD may remain caught in consolidation as weak USD demand offsets trade-related pressure on the Canadian Dollar. A further decline in oil could favor the upside, while renewed Dollar selling could keep the pair under pressure.
• Market Sentiment: Neutral amid conflicting drivers.
• Catalysts: US-Canada trade developments, crude oil prices, Fed and BoC expectations and North American economic data.
The Swiss Franc strengthened as renewed selling pressure hit the US Dollar amid concerns surrounding US debt-management strategy and increased Treasury bond buybacks. The Franc’s defensive characteristics also helped attract demand as investors reassessed exposure to US assets.
• US Debt Concerns: Fiscal uncertainty continues to undermine confidence in the Greenback.
• Treasury Buybacks: Increased US government bond buybacks have drawn attention to debt-management strategy.
• Safe-Haven Demand: CHF continues to benefit from demand for defensive alternatives.
• Fed Expectations: Reduced expectations for aggressive US tightening remain a headwind for USD.
• SNB Policy: Swiss monetary-policy expectations remain an important secondary driver.
• Trend: Bearish USD/CHF
• Resistance: 0.8050
• Support: 0.7950
• Forecast: USD/CHF could remain under pressure while concerns surrounding US debt and continued Dollar weakness support the Franc. A sustained break below 0.7950 could strengthen the bearish outlook, while a recovery above 0.8050 would signal improving Dollar momentum.
• Market Sentiment: Moderately bearish for USD/CHF.
• Catalysts: US fiscal developments, Treasury-market activity, Fed expectations, SNB policy and broader safe-haven demand.
The British Pound held near its February 11 highs against the US Dollar, with GBP/USD trading close to 1.3650 as buyers looked for a decisive breakout above 1.3660. Continued Greenback weakness provided support, although traders remained cautious about chasing the pair significantly higher without technical confirmation.
• US Dollar: Persistent Dollar weakness remains the primary tailwind for GBP/USD.
• Technical Momentum: The 1.3660 region represents an important near-term breakout level.
• BoE Expectations: UK monetary-policy expectations continue influencing Sterling.
• Fed Outlook: Reduced expectations for aggressive Fed tightening weaken USD’s relative rate advantage.
• Risk Sentiment: Broader market confidence could determine whether Sterling attracts further buying.
• Trend: Bullish
• Resistance: 1.3660 / 1.3700
• Support: 1.3570
• Forecast: GBP/USD could extend its advance if bulls achieve a sustained breakout above 1.3660, potentially bringing 1.3700 into focus. Failure to clear resistance could trigger consolidation after the pair’s recent gains.
• Market Sentiment: Moderately bullish.
• Catalysts: Dollar direction, Fed expectations, Bank of England commentary, UK economic data and the 1.3660 technical breakout.
The Euro held relatively steady against the US Dollar as investors continued assessing developments surrounding the US government’s debt strategy. Continued weakness in the Greenback helped EUR/USD maintain recent gains, although buyers remained cautious following the pair’s recent advance.
• US Debt Strategy: Concerns surrounding government borrowing and Treasury-market management continue weighing on USD sentiment.
• US Dollar: Persistent Greenback weakness remains supportive for the Euro.
• Fed Expectations: Reduced expectations for further aggressive tightening favor EUR/USD.
• ECB Outlook: European monetary-policy expectations remain important for the Euro’s underlying direction.
• Risk Sentiment: Broader uncertainty may prevent investors from aggressively extending long positions.
• Trend: Neutral to Bullish
• Resistance: 1.1750
• Support: 1.1650
• Forecast: EUR/USD could retain its constructive bias while the Dollar remains under pressure. A sustained move above 1.1750 could open further upside, while failure to build momentum may keep the pair consolidating above 1.1650.
• Market Sentiment: Cautiously bullish.
• Catalysts: US debt developments, Fed expectations, ECB commentary, Treasury yields and upcoming economic data.
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