NZD/USD traded near 0.5800 in the Asian session on Thursday, as the New Zealand Dollar softened. The move followed Iran rejecting a US ceasefire proposal and a 15-point settlement plan linked to US President Donald Trump. Iran’s Fars news agency said Tehran does not see a truce and talks as workable under current conditions. The Wall Street Journal reported Iran wants conditions met before direct talks, including closing all US bases in the Gulf, reparations, lifting all sanctions, keeping its missile programme without restrictions, and recognition of Iran’s authority over the Strait of Hormuz.

Geopolitical Tensions Support The Dollar

The ongoing war outlook increased demand for the US Dollar, which supported safe-haven buying. The US Dollar Index (DXY) held near 99.65, staying close to Wednesday’s gains. The US Dollar also drew support from expectations that the Federal Reserve will not move towards a more accommodative stance this year. In New Zealand, Reserve Bank Governor Anna Breman said policy could shift in either direction, and she did not rule out rate hikes or rate cuts. The current market situation mirrors the events we saw around this time last year. In March 2025, escalating tensions in the Middle East led to a flight to safety, boosting the US Dollar and pressuring risk-sensitive currencies. This dynamic pushed the NZD/USD pair down towards the significant 0.5800 support level. Given the heightened geopolitical uncertainty, traders should anticipate an increase in currency volatility. We saw forex volatility indexes jump by over 15% during the 2025 standoff, similar to how the VIX index surged over 45% in a week during early geopolitical shocks in 2022. This environment makes buying options strategies like straddles attractive, as they profit from a large price swing regardless of the direction.

Strategy And Key Levels To Watch

The fundamental picture continues to favor the US Dollar over the Kiwi. In 2025, the Federal Reserve’s firm policy stance contrasted with the Reserve Bank of New Zealand’s uncertainty, a divergence that seems to be repeating as recent US core inflation has cooled to 2.6% while New Zealand’s latest quarterly CPI remains elevated at 3.9%. This suggests that holding short positions via futures or buying put options on NZD/USD is a sound strategy. Pay close attention to the 0.5800 mark, which has historically served as a critical support level for the pair through late 2023 and the 2025 tensions. A firm break below this level could trigger a rapid sell-off toward the 0.5650 region as automated sell orders are activated. Therefore, traders can use a break of 0.5800 as a confirmation signal to add to short positions. Create your live VT Markets account and start trading now.

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Silver (XAG/USD) rose to about $71.50 in Asian trading on Thursday after small losses the previous day. Lower oil prices, linked to hopes of de-escalation in the Middle East, reduced inflation worries and expectations of further rate rises, supporting the non-interest-bearing metal. The White House said talks are still ongoing, and the Trump administration reportedly sent a 15-point proposal to Iran via Pakistan. Iranian officials are reviewing it but have indicated no readiness to hold talks with Washington, and Tehran said it would reject a US ceasefire offer.

Conflicting Signals Keep Markets On Edge

Iran instead proposed a five-point plan that includes sovereign control over the Strait of Hormuz. Conflicting messages from the US and Iran kept traders cautious and continued to unsettle financial markets. The US also ordered the deployment of thousands of troops to the Middle East, raising concerns about a possible ground invasion. Silver has faced heavy selling this month as energy prices rose on disruption linked to the Iran war, adding to inflation fears and pushing major central banks towards a more hawkish stance. TD Securities said the Federal Reserve faces mixed signals from an oil shock while the US economy remains uneven. It expects the Fed to stay on hold near term, with possible rate cuts later in 2026 if conditions allow. The current situation with US-Iran talks creates a classic binary outcome for silver, making it a playground for options traders. We are seeing silver’s price, now around $71.50, directly tied to oil market sentiment and the prospect of de-escalation. The key is that a major price swing is likely, but the direction is highly uncertain. This tension is directly visible in derivative markets, where implied volatility is high. The CBOE Silver Volatility Index (VXSLV) is trading near 45, well above its historical average, indicating that the market is pricing in a significant move. We’ve seen Brent crude ease from over $155 a barrel to around $115 on peace talk hopes, which is the sole reason silver has found its footing.

Options Strategies For A Volatile Silver Market

Given this setup, traders should consider buying volatility rather than betting on a specific direction. Long straddles or strangles on silver futures or ETFs would profit from a sharp breakout, whether it is up on a peace deal or down on a confirmed military conflict. This strategy capitalizes on the uncertainty itself, removing the need to correctly guess the geopolitical outcome. We saw how the energy-driven inflation spike of 2025 forced a hawkish pivot from central banks, which hammered precious metals. Now, the market is rapidly repricing, with Fed Funds futures suggesting a 40% probability of a rate cut by the third quarter, up from just 15% two weeks ago. This sensitivity shows how any news from the Middle East will immediately filter through to rate expectations and thus the price of silver. For those with a directional view, using call or put spreads offers a defined-risk way to participate. A bull call spread would benefit from a rally spurred by a peace agreement, while a bear put spread would profit from a breakdown if talks collapse. This approach is more prudent than trading the spot price directly until the geopolitical fog begins to clear. Create your live VT Markets account and start trading now.

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USD/CAD rose for a fourth straight day on Thursday, reaching about 1.3830 in the Asian session. This was the highest level in two months. The move came as the US Dollar strengthened amid uncertainty over the Middle East war involving the US, Israel, and Iran. The US Dollar Index (DXY) was around 99.65, holding onto gains from Wednesday.

Dollar Demand Driven By Geopolitical Uncertainty

Demand for the US Dollar stayed firm after Iran said it is not directly involved in negotiations with the US. Reuters reported that Iran called a Pakistan-delivered month-long ceasefire proposal and 15-point settlement plan excessive, and demanded sovereignty over the Strait of Hormuz. A senior Iranian official said talks could be held in Pakistan or Turkey if they proceed. Market pricing also reflected expectations that the Federal Reserve will not cut interest rates this year, as higher energy prices have affected inflation expectations. The Canadian Dollar underperformed most major peers, except antipodeans, as risk sentiment remained fragile. Canada’s status as a net oil exporter means higher oil prices from supply disruption can support the Canadian Dollar overall. We recall a similar environment in early 2025 when Middle East uncertainty drove the USD/CAD up towards 1.3830, even as rising oil prices should have supported the loonie. This created a clear divergence between short-term safe-haven flows into the US Dollar and the strong fundamental story for Canada’s currency. At the time, the market was pricing in geopolitical fear over commodity strength. The appropriate response then was to look past the immediate noise using derivatives. Buying longer-dated put options on USD/CAD would have been a strategic way to position for an eventual return to fundamental drivers. This allowed traders to bet on a stronger Canadian Dollar once the risk premium faded, without being exposed to the spot market’s volatility.

Why Oil May Reassert Influence

History shows these divergences between USD/CAD and oil prices tend to be temporary. Looking back at the spike in energy prices in 2022, after an initial lag, the Canadian Dollar eventually strengthened significantly against the US Dollar as its terms of trade improved. The lesson from 2025 is that Canada’s position as a net energy exporter provides a powerful anchor that eventually pulls the currency back in line with commodity prices. Today, with West Texas Intermediate (WTI) crude oil holding firm above $85 a barrel, this fundamental support for the Canadian Dollar is even more pronounced. Recent statistics from early March 2026 confirm that Canada’s energy exports are up 9% from the same period last year, directly boosting the nation’s trade balance. This provides a strong fundamental tailwind for the loonie. While the Federal Reserve is proceeding with a slow and data-dependent approach, the Bank of Canada has signaled less room for cuts due to stubborn domestic inflation, narrowing the interest rate advantage for the US Dollar. The current U.S. unemployment rate of 4.1% gives the Fed little reason to rush, creating a stable policy backdrop. Therefore, the primary driver for the currency pair is shifting back towards commodities. Given this context, traders should consider strategies that benefit from a cap on USD/CAD’s upside potential in the coming weeks. Selling out-of-the-money call spreads on the pair allows one to collect premium while defining risk, a strategy that profits if the pair trades sideways or moves lower. This position aligns with the view that strong oil fundamentals will limit any significant rallies in the US Dollar against its Canadian counterpart. Create your live VT Markets account and start trading now.

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USD/JPY held in a tight range around the mid-159.00s in Thursday’s Asian session. It stayed close to its highest level since July 2024, reached earlier this month. The yen remained weak as higher energy prices linked to the war raised concerns about Japan’s trade balance and growth. Rising oil prices could also lift inflation, complicating the Bank of Japan’s plans to normalise policy.

Middle East Conflict Fuels Risk

Iran’s foreign minister said on Wednesday that Tehran is reviewing a US proposal to end the war, but does not plan talks aimed at reducing the expanding Middle East conflict. Reports of additional US troop deployments in the region added to fears of escalation, despite US President Donald Trump’s ceasefire comments. Expectations for tighter US monetary policy continued to support the dollar and the pair. Traders have nearly priced out any further Federal Reserve rate cuts and have increased bets on a rate hike by the end of this year. Ongoing geopolitical uncertainty also supported demand for the dollar. However, fears of potential market intervention limited additional yen selling and capped upside moves in USD/JPY. The fundamental picture suggests a continued upward path for the USD/JPY pair. With WTI crude now trading above $110 a barrel, a 35% jump in just one quarter, Japan’s economic outlook is worsening. This was confirmed by the latest trade data showing a ¥2.1 trillion deficit for February 2026, largely due to these high energy import costs.

Policy Divergence Supports Dollar

On the other side of the trade, the US Dollar is benefiting from hawkish Federal Reserve expectations. We see the market has almost completely abandoned hopes for rate cuts this year, with the CME FedWatch Tool now showing a 70% chance of a rate hike by December 2026. This wide policy difference between a hawkish Fed and a constrained Bank of Japan provides strong support for the dollar. However, the primary risk holding the pair back is the threat of direct intervention from Japanese authorities. We all remember the Ministry of Finance’s decisive actions in late 2022 when the rate first crossed the 151 level, which caused sharp, sudden drops in the pair. With the pair now hovering near 160.00, verbal warnings could turn into physical intervention at any moment. Given this setup, a straightforward long position carries significant risk of a sudden reversal. A more prudent approach in the coming weeks would be to use options, such as buying USD call options or JPY put options. This strategy allows a trader to profit from further upside while defining and limiting the maximum loss to the premium paid if intervention does occur. Create your live VT Markets account and start trading now.

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GBP/USD traded near 1.3360 in Asian hours on Thursday, after two sessions of declines. The pair was little changed as the US Dollar stayed firm, while traders monitored the Iran war. The White House said discussions are ongoing, and the Trump administration reportedly sent a 15-point proposal to Iran via Pakistan. Iranian officials are reviewing it, but have indicated no readiness to hold talks with Washington.

Iran Talks And Market Focus

Tehran said it would reject a US ceasefire offer and presented a five-point plan instead. That plan includes sovereign control over the Strait of Hormuz. Sterling drew some support from lower oil prices amid hopes of reduced Middle East tensions. UK February inflation showed headline CPI at 3% and core CPI at 3.2% versus a 3.1% forecast. The Bank of England held the Bank Rate at 3.75% after a 9–0 vote. Expectations for three rate cuts in 2026 were removed, with the GBP Repo Rate now projected to stay at 3.75% through Q4 2026. We are seeing significant tension in the market as GBP/USD remains stagnant around 1.3360, driven by the standoff between the US and Iran. This kind of geopolitical uncertainty often leads to a spike in volatility, and we’ve seen the VIX index jump from 14 to over 22 in the last month alone. Given this, buying volatility through options contracts like straddles could be a sound strategy to capitalize on a potential sharp move once the diplomatic outcome becomes clearer.

BoE Fed Policy Divergence

The Bank of England’s new hawkish stance, holding rates firm at 3.75% and removing expectations for cuts in 2026, puts it at odds with the US Federal Reserve. Current data from the CME FedWatch Tool indicates that traders are pricing in a 50% chance of a Fed rate cut by June. This policy divergence should offer underlying support for the pound, making it favourable to look for opportunities to go long GBP/USD. We must also consider that UK inflation remains persistent, with the core CPI at 3.2% even before the conflict began. Fresh statistics released last week by the Office for National statistics showed that UK wage growth is still hot, running at 4.5% year-over-year. This sticky inflation justifies the Bank of England’s decision to stay firm and makes it risky to short the pound. The recent easing of oil prices offers some relief for the pound, as it reduces pressure on the UK, a net energy importer. Brent crude has already fallen from its recent conflict-induced peak of $95 a barrel to trade around $88 on hopes of a diplomatic solution. If tensions continue to de-escalate and oil prices drift lower, this will provide an additional tailwind for Sterling in the coming weeks. Create your live VT Markets account and start trading now.

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AMD shares reached a record $267.08 on 29 October 2025, then moved into a pullback with a three-swing zigzag pattern. From the peak, wave ((A)) fell to $194.28 and wave ((B)) rose to $266.96. Wave ((C)) then declined and ended at $185.18 on the one-hour chart. This completed wave II at a higher degree and ended the corrective phase. The pullback contained three clear swings and finished within the 100% to 161.8% Fibonacci extension zone of wave ((A)). Wave ((C)) did not reach the 161.8% level. From the $185.18 low, a new rise began, with wave 1 reaching $209.21. Wave 2 then pulled back to $192.27. A projected level is near $230, based on the 161.8% Fibonacci extension of wave 1. The $185.18 level is treated as a key pivot for the current move. Based on the price action from last year, the corrective phase for AMD appears complete. We view the low at $185.18 as a significant floor, establishing a base for a new upward impulsive wave. This suggests the stock is positioning for a sustained rally in the coming weeks. This bullish technical setup is reinforced by strong underlying fundamentals reported earlier this year. AMD’s Q4 2025 earnings showed a 45% year-over-year surge in data center revenue, largely driven by demand for its new AI accelerators. This growth trajectory provides a solid backdrop for the anticipated price advance. For traders anticipating this move, buying call options with expirations in May or June 2026 presents a direct way to participate in the upside. Focusing on strikes around the $215 level could offer a favorable risk-reward profile for a move toward the initial target of $230. This strategy allows for leveraged gains if the upward momentum accelerates as expected. Further confidence comes from recent industry data released this month showing AI server shipments grew 22% in the first quarter of 2026. AMD has notably increased its market share within this expanding sector, a pattern reminiscent of the growth phase we saw back in 2023. This supports the idea that the current rally is backed by genuine business expansion. An alternative strategy is to sell out-of-the-money bull put spreads with the short strike placed below $190. This approach benefits from time decay and the stock staying above the critical support level. As long as AMD holds above the $185.18 pivot, this position would generate income while maintaining a bullish bias. Ultimately, the $185.18 level is the critical pivot for any bullish derivative play. A decisive break below this price would invalidate the immediate upward structure and force a reassessment of the trend. Therefore, we are using this low as our key line in the sand for managing risk on all new positions.

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WTI Crude Oil traded in a tight range during Thursday’s Asian session, holding near $90.50 and staying within a three-day band. On Wednesday, Iran’s foreign minister said Tehran is reviewing a US proposal to end the war. He also said Iran does not plan talks aimed at reducing the expanding Middle East conflict.

Regional Tensions And Oil Prices

The US has deployed more troops in the region, raising the chance of further escalation. This supported a rise in crude prices on Wednesday. Energy infrastructure in Iran remains under pressure. The effective closure of the Strait of Hormuz has kept a geopolitical risk premium in place, supporting prices. Despite these factors, traders have been cautious and have waited for more clarity on the conflict. This has helped keep prices steady rather than extending gains. A war-led rise in energy prices has increased fears of higher inflation, which could push the US Federal Reserve towards a more hawkish stance. This has supported the US Dollar.

Dollar Strength And Commodity Demand

A firmer US Dollar can reduce demand for dollar-priced commodities and has limited further upside in crude oil prices. Looking back to late 2025, we saw crude oil consolidate around the $90 mark as the market tried to price in the severe geopolitical risks from the Middle East. Tensions surrounding Iran and the Strait of Hormuz kept a floor under prices, but concerns over a hawkish Federal Reserve placed a cap on any significant rally. That period of tight, range-bound trading set the stage for the conditions we see today. Since that time, a fragile diplomatic channel has eased the most immediate supply threats, causing WTI to pull back into the low $80s. However, the risk premium has not vanished entirely, as OPEC+ has maintained its production discipline through the first quarter of 2026, with compliance in February reported at over 105% of agreed cuts. This has left the market fundamentally tight and highly sensitive to any new headline. The main signal for derivative traders is that implied volatility remains elevated despite the lower spot price. The CBOE Crude Oil Volatility Index (OVX) is currently trading near 34, which is significantly higher than the peaceful averages we saw a few years ago. This indicates that the options market is still bracing for a sharp move, pricing in the continued uncertainty. Focus is now shifting from a singular obsession with supply risks to a more balanced view that includes demand. Recent data from early March showed US crude inventories building by 2.1 million barrels, against expectations of a draw, hinting at a potential softening in demand. This creates a conflicting narrative for the market, pitting tight supply against questionable consumption growth. Given this backdrop, traders should consider strategies that benefit from a breakout in either direction, as the market is coiled for a move. Buying straddles or strangles using options with 45 to 60 days to expiration could be effective. This approach allows a position to profit from the high implied volatility if a new catalyst, be it geopolitical or economic, forces crude out of its current equilibrium. Create your live VT Markets account and start trading now.

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EUR/USD traded near 1.1560 in Asian hours on Thursday, after modest losses the previous day. The pair stayed steady as the US Dollar held firm amid reports of US diplomatic outreach to Iran. Reports said talks are focusing on a one-month ceasefire to allow formal negotiations between Washington and Tehran. The Trump administration was reported to have offered Iran a 15-point peace proposal to end hostilities in the Middle East.

Diplomatic Outreach And Ceasefire Talks

Other reports said the US ceasefire plan was communicated via Pakistan, which is taking on a mediating role. Senior Iranian officials were reported to be reviewing the proposal but not prepared to hold talks with Washington. Tehran was reported to be set to reject a US ceasefire offer and to table a five-point plan. The plan includes sovereign control over the Strait of Hormuz. ECB policymaker Olaf Sleijpen said higher energy prices could pass through to wider inflation faster than during the 2022 energy crisis. He said policymakers cannot directly control oil and gas prices, but could respond if second-round effects appear, with more clarity expected in coming months. Looking back at 2025, we saw EUR/USD trading near 1.1560, influenced by hopes of US-Iran de-escalation and early warnings on inflation from the European Central Bank. As of today, March 26, 2026, the pair is trading significantly higher around 1.1820, showing how those themes have played out. The fundamental tensions we identified last year continue to be the primary drivers of the market.

Market Implications For Eurusd In 2026

The diplomatic efforts with Iran we watched in 2025 stalled, which has contributed to persistent geopolitical risk. This has kept energy prices elevated, with Brent crude futures averaging over $85 a barrel in the first quarter of 2026. For traders, this sustained tension means any flare-up could spark a sudden rush into the safe-haven dollar, making long positions in EUR/USD vulnerable to sharp reversals. The ECB’s concerns about energy prices feeding inflation, which were just developing last year, have now materialized. The latest Eurozone Harmonised Index of Consumer Prices (HICP) for February 2026 came in at a stubborn 2.7%, well above the bank’s target. This data reinforces the view that the ECB will be one of the last major central banks to cut rates, providing a strong pillar of support for the Euro. Given this backdrop, we believe options traders should prepare for continued range-bound trading with the potential for sudden spikes in volatility. Selling out-of-the-money puts on the Euro could be a sound strategy to collect premium, as the ECB’s hawkish stance is likely to limit significant downside for the pair. Meanwhile, the persistent geopolitical risk suggests holding some long volatility positions to hedge against any sudden flight-to-safety events. Create your live VT Markets account and start trading now.

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The People’s Bank of China (PBOC) set the USD/CNY central rate for Thursday at 6.9056. This compared with the previous day’s fix of 6.8911. The PBOC’s main monetary policy goals are price stability, including exchange rate stability, and supporting economic growth. It also seeks financial reforms such as opening and developing the financial market.

Pboc Governance And Control

The PBOC is owned by the state of the People’s Republic of China and is not treated as an autonomous body. The Chinese Communist Party Committee Secretary, nominated by the Chairman of the State Council, has strong influence over management and direction, and Pan Gongsheng currently holds both that role and the governor post. The PBOC uses several policy tools, including a seven-day Reverse Repo Rate, the Medium-term Lending Facility, foreign exchange interventions, and the Reserve Requirement Ratio. The Loan Prime Rate is the benchmark interest rate and affects loan, mortgage, and savings rates, as well as the Renminbi exchange rate. China has 19 private banks. The largest are digital lenders WeBank and MYbank, and rules allowing fully privately funded domestic lenders began in 2014. The People’s Bank of China has set the daily USD/CNY rate at 6.9056, a noticeably weaker fix for the yuan. This action signals to us a greater official tolerance for currency depreciation, likely aimed at supporting the economy. Derivative traders should interpret this as a green light for further managed weakness in the currency over the coming weeks.

Trading Implications And Risk

This policy shift is understandable given the economic data we have seen so far in 2026. After a challenging 2025 marked by a sluggish property sector, China’s exports for January and February this year grew by a mere 1.5% year-over-year, falling short of expectations. This weaker yuan fixing is a direct tool to make Chinese goods cheaper and more competitive globally. For those trading options, this suggests an increase in the implied volatility of the USD/CNH pair. We could consider strategies that profit from larger price swings, as the market digests the potential for either a faster depreciation or a sudden intervention to slow it down. This environment is reminiscent of the volatility we experienced in late 2024 when the currency last tested these levels. We must remember the PBOC is not an independent central bank and has many tools to manage its currency. Watch closely for supporting policy moves, such as a potential cut to the Reserve Requirement Ratio (RRR) to inject more liquidity into the financial system. The last RRR cut we saw was in September 2025, which preceded a similar period of yuan weakness. This managed depreciation will likely keep the yield spread between Chinese government bonds and U.S. Treasuries wide. That interest rate differential, which currently stands at over 2 percentage points for 10-year bonds, continues to favor strategies that bet on a stronger dollar against the yuan. This dynamic has been a consistent and profitable theme for much of the last 18 months. Create your live VT Markets account and start trading now.

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Japan’s Corporate Service Price Index rose 2.7% year on year in February. This was up from 2.6% in the previous reading. The data shows a 0.1 percentage point increase from the prior figure. The index tracks changes in prices charged for services between companies in Japan.

Inflation Pressure Builds In Japan

The rise in the Corporate Service Price Index to 2.7% is a clear signal that inflation is not cooling down. This data point reinforces the idea that price pressures are becoming embedded in the economy. Consequently, we see increased pressure on the Bank of Japan to consider another interest rate hike sooner than the market previously expected. This comes on the heels of the recent spring “Shunto” wage negotiations, which preliminary results show secured average pay increases of around 4.5%, a significant jump from last year. We remember how the BoJ finally ended its negative interest rate policy back in early 2025, and this combination of strong wage growth and service inflation suggests the next step in policy normalization is approaching. This is the kind of data that validates their initial move and emboldens the hawks on the policy board. For currency traders, this strengthens the case for a stronger yen in the coming weeks. We should consider buying JPY calls or selling out-of-the-money USD/JPY calls to position for a drop in the dollar-yen pair. The market will begin pricing in a higher probability of a BoJ rate hike at their April or June meeting, which should attract capital flows into the yen. In the rates market, the upward pressure on Japanese Government Bond (JGB) yields is set to continue. Shorting JGB futures is the most direct way to position for this, as we anticipate the 10-year yield breaking decisively above its current 1.2% level. Look at options on JGB futures, such as buying puts, to define risk on a bet that the BoJ’s tightening path will be faster than currently priced.

Implications For Rates Currencies And Equities

The outlook for Japanese equities is now more complex, creating opportunities in volatility. While a healthier, inflationary economy is a long-term positive, the short-term impact of higher rates could create headwinds for the Nikkei 225. We could use options straddles on the Nikkei 225 index, positioning for a significant price move in either direction as the market digests this new reality. Create your live VT Markets account and start trading now.

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