After the initial shock in the markets after the Trump tariffs is seems that we are entering a face of consolidation of the dollar index showing signs of stability in the majority of forex pairs as well as the commodities like gold. If we take a look at the U.S treasury bond yields we will see a slight improvement from the lows of 4.18% to the current 4.31% which means that capital might start flowing in favor of the dollar supporting it against the pairs traded against it.
This has as an effect the consolidation seen on the gold chart which has somewhat corrected to the downside after reaching a new all-time high. Although geopolitical tensions tend to keep the price of gold high and might even push it higher if we see further escalations.
On the economic calendar for this week there is the publication of the PCE price index which is expected to remain static at 2.5% year over year hinting that there might be a phase of stability on the figure of the next U.S inflation data.
U.S 10 year treasury bond yields:
United States PCE price index:
US Oil prices have risen due to a significant decrease in US crude stockpiles, with crude oil inventories in the United States fell by 4.6 million barrels for the week ending March 21, a larger decrease than the expected dip of 2.5 million barrels, according to the American Petroleum Institute (API). The market is evaluating the potential impact of a Russia-Ukraine ceasefire in the Black Sea, with some energy traders considering a return to Russia if sanctions are lifted. Despite oil prices being down over 10% since this year’s peak due to global trade tensions, traders are buying bullish oil options to hedge against potential price spikes caused by US sanctions on countries like Venezuela and Iran.
President Trump has signed an executive order that could impose tariffs on countries buying Venezuelan crude oil and liquid fuels, potentially impacting China, which is Venezuela’s largest buyer. Despite these supply threats, analysts predict a well-supplied oil market this year with soft prices, citing potential economic slowdown due to Trump’s tariffs and concerns over global demand growth.
From the technical analysis perspective the price of crude oil broke above the declining channel that was in effect since mid January and is currently at a major technical resistance level which consists of the upper band of the Bollineger bands, the and the 50-day moving average. At the same time the Stochastic oscillator is in the extreme overbought levels hinting that a bearish correction might be seen in the upcoming sessions while the Bllinger bands are somewhat contracted meaning that volatility might not be there for a significant move in the near short term.
