Iran’s Supreme Leader, Mojtaba Khamenei, said attacks on neighbouring country military bases will continue, and that Iran will avenge its dead. Risks in the Strait of Hormuz rose after reports that Iran targeted two oil tankers, raising concern about disruptions to global energy supply. US initial jobless claims for the week ending 7 March fell to 213K, below the 215K forecast. The US Dollar Index (DXY) traded near 99.70, around its highest level since November 2025.

Dollar Strength Drives Major Markets

EUR/USD fell for a third day to about 1.1520. GBP/USD also dropped for a third day to near 1.3360; a Reuters poll showed 43 of 50 economists (86%) expect the Bank of England to hold rates at 3.75% on 19 March. USD/JPY traded near 159.40 as the dollar stayed firm and the Bank of Japan kept a gradual approach to policy normalisation. AUD/USD was near 0.7090, ending a four-day rise. WTI traded at $94 per barrel, extending a three-day rise after falling from $120 earlier in the week. Gold traded at $5,111 after slipping below $5,150 earlier in the Asian session. Data due on Friday include UK GDP and manufacturing production, Spain HICP, eurozone industrial production, Canada jobs and wages, and a wide set of US releases including PCE inflation, durable goods, GDP, income, spending, JOLTS, and Michigan sentiment and inflation expectations.

Trading Implications And Key Risks

With escalating conflict in the Strait of Hormuz, the US Dollar is the market’s primary safe haven, pushing the DXY to highs we haven’t seen since November 2025. The strong US jobless claims data, coming in at 213K, further solidifies the dollar’s position. Traders should anticipate this dollar strength to be the dominant theme, impacting all major asset classes in the coming weeks. The attacks on oil tankers present a significant supply-side risk, creating extreme volatility in WTI, which is now at $94. We saw a similar situation in early 2022 when geopolitical events caused Brent crude to surge over $120 a barrel in a matter of weeks. Buying call options on crude oil or related energy ETFs could be a prudent way to capture potential upside from any further disruptions in the Middle East. Given the dollar’s strength, options strategies that bet on further declines in EUR/USD and GBP/USD should be considered. With EUR/USD near 1.1520 and GBP/USD around 1.3360, purchasing put options can provide downside exposure with limited risk. The Bank of England’s likely decision to hold rates firm on March 19 offers little support for the pound against the surging greenback. The wide interest rate differential between the US and Japan makes long USD/JPY positions attractive, especially with the Bank of Japan normalizing its policy so gradually. The pair’s push toward 159.40 suggests the path of least resistance is higher. Using futures or call options to ride this trend could continue to be a profitable carry trade. Interestingly, gold is not acting as a traditional safe haven, currently trading down at $5,111 as investors flock to the US Dollar instead. We’ve seen this dynamic before, like in the second half of 2022 when a surging US Dollar Index kept a lid on gold prices even amid global uncertainty. Traders might look to sell call spreads, betting that the dollar’s strength will continue to cap gold’s upside potential for now. The sheer volume of high-impact US data due today, including PCE inflation and final Q4 GDP, will introduce significant event risk. This data, combined with the unstable geopolitical situation, means implied volatility will likely remain elevated across the board. We should be prepared for sharp market movements and adjust our positions accordingly as the new inflation and growth figures are released. Create your live VT Markets account and start trading now.

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WTI crude oil stayed highly volatile, rising more than 7.5% on Thursday amid concern about supply disruption via the Strait of Hormuz during the US-Iran war. WTI traded near $94.31, its third straight daily gain, after it jumped to $113 on Monday then fell to close near $83.36. Iran’s Supreme Leader, Mojtaba Khamenei, said on Thursday that closing the Strait of Hormuz should continue as a pressure tool. US Energy Secretary Chris Wright said there is a short-term supply disruption, and that US Navy escorts for oil tankers could begin by the end of the month.

Supply And Demand Outlook

The IEA said it plans to release about 400 million barrels from members’ strategic reserves. It also cut its 2026 global oil demand growth forecast to 640,000 barrels per day from 850,000 bpd. On charts, WTI moved above the 21, 50 and 100-day SMAs, while RSI stood near 81 and ADX moved towards the high-40s; ATR rose. Resistance sits near $94.61 (50% retracement from $113.28 to $75.95), then $99.02 and $105.29, with $113.28 above; support is near $90.21, $84.76, $75.95, and the 21-day SMA near $72.20. We are still navigating the aftershocks of the extreme volatility seen in 2025 when the US-Iran conflict caused massive price swings and the temporary closure of the Strait of Hormuz. The memory of WTI crude surging to $113 before collapsing is keeping the market on edge, even with prices now more stable around $82.50. This history suggests traders should be prepared for sudden, headline-driven moves in the coming weeks. The wild price action of last year has left implied volatility at elevated levels, making options premiums relatively expensive. Currently, the CBOE Crude Oil Volatility Index (OVX) is hovering near 35, far below the crisis peaks but still above historical norms, reflecting lingering geopolitical risk. This environment makes strategies that benefit from high volatility, such as straddles or strangles, attractive for those anticipating another major price swing.

Key Market Levels

Last year’s 400-million-barrel release from IEA strategic reserves has left global stockpiles in a more vulnerable position heading into the spring season. While U.S. crude oil production has remained robust at approximately 13.3 million barrels per day, it may not be enough to cushion the market from another significant supply disruption. Therefore, any renewed tension in the Middle East could have an outsized impact on prices, making long call options a viable hedge against a supply shock. The IEA’s forecast from 2025, which lowered its 2026 demand growth projection, appears to be accurate as we see signs of a slowing global economy. Recent Purchasing Managers’ Index (PMI) data from major economies has shown a contraction in manufacturing activity, weighing on the overall demand outlook for energy. This persistent demand weakness could cap any potential price rallies, suggesting that bear call spreads might be an effective way to trade a range-bound or slightly bearish market. We are closely watching the key Fibonacci levels that defined the trading range during the 2025 crisis, particularly the support around the $76 mark and resistance near $90. A decisive break below support could signal that demand fears are taking over, creating an opportunity for traders to initiate short positions or buy puts. Conversely, a sustained move above the $90 resistance level would suggest supply fears are returning, likely prompting a rapid move higher. Create your live VT Markets account and start trading now.

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The US Dollar rose for a third day, pushing the DXY above 99.00 to new multi-month highs and moving towards 100.00. Support came from demand for safe-haven assets and higher US Treasury yields amid tensions linked to the US–Israel–Iran situation. Weekly Initial Jobless Claims fell to 213K in the week ending March 7, and the report was corrected on March 12 at 18:21 GMT to confirm the date. Upcoming US releases include PCE inflation, another revision to Q4 GDP, and the advanced Michigan Consumer Sentiment Index.

Dxy Technical Levels

On the charts, DXY faces resistance at 100.00, then 100.39 (November 21) and 101.97 (May 12). If it drops below the 200-day SMA at 98.34, levels to watch include the 55-day SMA at 98.05, 96.49 (February 11), and 95.55 (January 27). Inflation is commonly tracked as MoM and YoY changes, while core inflation strips out food and fuel and is often targeted near 2%. CPI tracks price changes in a basket of goods, and higher inflation can lead to higher rates, supporting a currency and raising the cost of holding gold. With the US Dollar Index pushing towards the 100.00 mark, we are positioning for continued strength in the coming weeks. The ongoing flight to safety, driven by international tensions, provides a strong tailwind for the dollar. We see this trend continuing as long as these geopolitical risks remain elevated. This bullish outlook is reinforced by fresh economic data showing Core PCE inflation remains stubborn at 2.9%, well above the Federal Reserve’s target. Consequently, the 10-year Treasury yield has climbed to 4.55%, making the dollar more attractive to hold. The market is now pricing in a much lower probability of a Fed rate cut before the third quarter, further supporting our view.

Options And Futures Strategy

For options traders, the elevated uncertainty, reflected by the Cboe Volatility Index (VIX) holding near 18, makes buying call options on the dollar expensive. We should consider strategies like selling out-of-the-money puts on the DXY or using bull call spreads. This allows us to profit from the upward move while managing the high cost of premiums. Those trading futures should use the psychological 100.00 level as an initial target. A decisive break above this could see a quick move towards the November 2025 high of 100.39. We are placing protective stops below the critical 200-day moving average at 98.34 to manage downside risk. Looking at positioning data, we see that large speculators have increased their net long positions in the US dollar for the fourth consecutive week, according to the latest CFTC report. This confirms that the broader market sentiment aligns with our bullish stance. This momentum suggests that dips are likely to be bought quickly. This dollar strength also informs our strategy in other currency pairs. We see opportunities in shorting pairs like the EUR/USD, especially as recent European economic indicators have shown signs of softness. This provides another way to express our long-dollar view. Create your live VT Markets account and start trading now.

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The US Dollar traded firmer in Thursday’s American session, as concerns about oil supply disruption weighed on market sentiment. EUR/USD traded near 1.1520, above the 2026 low at 1.1507. Attention stayed on the Strait of Hormuz, amid continued attacks and reports of threats to shipping. Reports said tankers from neighbouring countries were attacked and that Iran laid mines in the passage, while Mojtaba Khamenei said the Strait should remain closed.

Oil Supply Risks And Dollar Strength

Donald Trump said the US, as the largest oil producer, benefits when prices rise. The comments came amid market concerns about Brent moving above $100 per barrel and WTI trading above $90. On Friday, markets are set to watch the US Personal Consumption Expenditures (PCE) Price Index. January data is due after December core PCE inflation was 3%. On the 1-hour chart, EUR/USD was at 1.1523 and remained below the 20-, 100- and 200-period SMAs, which were all sloping lower. Resistance was noted near 1.1540, 1.1585 and 1.1606, while support sat at 1.1507 and then 1.1470. A correction dated March 12 at 18:47 stated December core PCE was 3%, not 2.9%.

Options Positioning And Hedging Ideas

Given the ongoing closure of the Strait of Hormuz, we are seeing a classic flight to safety into the US dollar. The persistent risk of supply disruption is likely to keep oil prices elevated, which in turn supports the dollar. Derivative traders should anticipate this trend continuing in the coming weeks. We see opportunities in the crude oil market, with WTI now trading firmly above $90 per barrel. Buying call options on oil futures is a direct way to speculate on further price increases if the conflict escalates. Recent reports from the Energy Information Administration (EIA) confirm this tightness, showing an unexpected draw in US crude inventories of 2.8 million barrels last week. For currency traders, the weakness in EUR/USD presents a clear opening near its 2026 lows. We should consider buying put options on the EUR/USD pair, targeting a break below the 1.1507 support level. This provides a defined-risk strategy to capitalize on continued dollar strength against the euro. Tomorrow’s release of the US PCE Price Index for January will be a major catalyst. Looking back at December 2025, core PCE was already at 3%, and if this upcoming figure comes in higher, it will increase pressure on the Federal Reserve to maintain a hawkish stance. A hot inflation print would almost certainly send the dollar higher and EUR/USD lower. This combination of geopolitical tension and persistent inflation is negative for general market sentiment, making equity index protection attractive. We are looking at buying put options on the S&P 500 to hedge against a broader market downturn. Calls on the VIX, which is currently trading around 22, could also be used to profit from a potential spike in volatility. The current market environment feels very similar to what we experienced in 2022 when energy shocks led to a strong dollar and widespread market uncertainty. That historical precedent suggests that as long as the Strait of Hormuz remains a flashpoint, these defensive and pro-dollar positions are the most logical ones to hold. Create your live VT Markets account and start trading now.

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Gold fell on Thursday as a stronger US Dollar and higher Treasury yields limited gains. XAU/USD traded near $5,113, down about 1.20%, while staying in a range. The US-Iran war reached day 13, with intensified attacks and no clear de-escalation. Iran set conditions for ending the conflict, and its leadership backed keeping the Strait of Hormuz closure as pressure.

Strait Of Hormuz Supply Risks

Disruption near the Strait of Hormuz has raised concerns about Oil supply, with Iran targeting tankers and commercial vessels. A BHH report estimates nearly 15 million barrels per day pass through the route, or about 10 mb/d with full alternative routing. The IEA agreed to release 400 million barrels from emergency reserves, including 172 million from the US Strategic Petroleum Reserve. Based on flow estimates, this could cover about 27 to 40 days of disruption. Markets no longer fully price in even one 25 bps rate cut in 2026, supporting the Dollar. Attention now turns to Friday’s US PCE Price Index report. Technically, gold is consolidating between $5,000 and $5,250, with RSI near 55 and ADX near 12. Resistance sits at $5,200 and $5,238, while support is near $5,115, $4,932, and $4,556.

Positioning And Volatility Strategies

Central banks added 1,136 tonnes of gold worth about $70 billion in 2022, the highest on record. Gold often moves inversely to the US Dollar and US Treasuries. As of March 13, 2026, we see gold caught between powerful forces, making directional bets risky in the immediate term. The ongoing US-Iran conflict provides a strong floor for prices due to safe-haven demand. However, the resulting inflation fears are empowering a hawkish Federal Reserve, which strengthens the dollar and caps gold’s potential gains. The market’s reaction is clear in recent data, with Brent crude futures holding stubbornly above $150 a barrel despite the release of strategic reserves. This has fed directly into inflation expectations, supported by last week’s Consumer Price Index (CPI) report which showed an unexpected rise to 4.1% year-over-year. Consequently, we’ve seen Fed funds futures completely price out any rate cuts for 2026, a dramatic shift from sentiment just before the conflict began. For derivative traders, this environment of high tension within a defined range suggests looking at volatility strategies. Buying straddles or strangles with expirations in the coming weeks could be an effective way to profit from a potential sharp breakout, which could be triggered by either an escalation or a sudden de-escalation in the Middle East. This approach does not require us to guess the correct direction of the eventual move. The technical chart confirms this sideways action, with gold consolidating between the key psychological level of $5,000 and resistance at $5,250. We can use these levels to structure trades, such as iron condors, to collect premium while the market remains undecided. The CBOE Gold Volatility Index (GVZ) is currently elevated near 25, reflecting the high uncertainty and making options premiums relatively expensive. Looking back, we remember the initial price spikes in commodities at the start of geopolitical conflicts in the early 2020s, which often faded before resuming a trend. We are also mindful of the 1970s, when gold performed extremely well during a period of stagflation, as high inflation offset the impact of rising interest rates. This historical precedent suggests that if inflation continues to outpace yields, the ultimate path for gold could still be upward. Create your live VT Markets account and start trading now.

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GBP/USD is trading near 1.3350 and has fallen for a third day in a row. The move comes as tensions in the Middle East increase. On Wednesday, the International Energy Agency agreed to release around 400 million barrels of oil. The supply will come from member countries’ strategic reserves and aims to curb energy prices.

Geopolitical Stress And Pound Vulnerability

We are seeing a familiar pattern develop, reminiscent of the events in 2025 when geopolitical stress pushed GBP/USD down to the 1.3350 level. At that time, the large strategic oil release was a significant intervention meant to control surging energy costs. Today, on March 13, 2026, similar undercurrents are in play, suggesting traders should remain cautious on the pound. The pound is currently struggling around the 1.2480 mark, significantly weaker than the levels seen during the 2025 tensions. UK inflation data for February came in stubbornly high at 3.4%, putting the Bank of England in a difficult position as economic growth remains sluggish. This environment suggests that further significant interest rate hikes to defend the currency are unlikely, leaving it vulnerable. Meanwhile, the dollar continues to benefit from a flight to safety and a more resilient US economy, where recent labor market data showed continued strength. This policy divergence between a hesitant Bank of England and a data-dependent Federal Reserve is creating a clear path for dollar strength. The market is increasingly pricing in the possibility of only one UK rate cut this year, far less than was expected just months ago. The 2025 release of 400 million barrels of oil provided only temporary relief, a lesson we must remember now as Brent crude trades back above $92 per barrel. Persisting global supply constraints and new geopolitical flashpoints mean energy prices are once again weighing heavily on the UK, an economy highly sensitive to energy import costs. This pressure directly translates into weakness for the British pound.

Options Positioning For Further Downside

For derivatives traders, this points towards positioning for further GBP/USD downside in the coming weeks. Buying put options with strike prices below the 1.2400 level could offer a defined-risk strategy to capitalize on a potential break lower. Given the elevated uncertainty, implied volatility in the pair is rising, making option strategies more attractive than outright shorting for some. Create your live VT Markets account and start trading now.

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After the CPI print came in broadly in line with expectations, the S&P 500 moved higher at first but then sold off during the same session. The early rise was described as a bullish trap, and the move created an intraday opportunity to sell. Swing trading activity was limited, with a focus on avoiding being forced out of positions by short-term price swings. A prior plan laid out on Sunday was described as working as expected.

Assessing A Potential Market Bottom

The question now is whether the market can turn around, based partly on the US dollar not rising as strongly as it did on previous days. The request asks how close the market may be to a bottom and whether weaker USD strength could support a reversal. It looks like we’re seeing a classic bullish trap in the S&P 500, especially after the latest inflation numbers. The February 2026 Consumer Price Index reading of 3.1% shows inflation is still sticky, making any market strength seem untrustworthy. These brief pops higher are creating better opportunities for sellers than for buyers. For derivative traders, this means being cautious about buying call options for a big move up right now. Instead, using these rallies to either buy put options or sell call credit spreads could be the smarter play. This strategy works well when you expect the market to either go down or stay flat. We remember seeing a similar setup back in late 2025, where quick rallies were sold off on persistent economic concerns. With the VIX, a measure of market fear, now sitting near 18, it’s clear there is underlying anxiety preventing a sustained move higher. This isn’t panic, but it’s enough to keep a lid on prices.

How Dollar Weakness Factors In

Even with the U.S. Dollar Index pulling back from its recent highs to around the 104 level, it hasn’t given stocks the green light. A weaker dollar usually helps stocks, but its failure to ignite a real rally tells us sellers are still in control. For now, the path of least resistance appears to be sideways or down. Create your live VT Markets account and start trading now.

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The United States held an auction of 30-year bonds. The auction yield rose to 4.871%. The previous auction yield was 4.75%. This means the yield increased compared with the last sale.

Long Term Yield Signal

The higher yield on the 30-year bond auction tells us the market is demanding more compensation for long-term risk. This is likely a direct reaction to persistent inflation, as we saw the February 2026 CPI report come in unexpectedly high at 3.1%. It signals that expectations for future Federal Reserve rate cuts are fading quickly. We should consider positioning for higher rates by looking at short positions in Treasury futures, particularly the 30-year Ultra Bond (/UB). As yields rise, the price of these futures contracts will fall. Furthermore, derivatives tied to the Fed’s policy rate, like SOFR futures, are pricing in fewer rate cuts this year, with odds for a cut before September now below 50%. This environment is typically negative for equities, so we should consider buying protective put options on major indices like the S&P 500. We saw a similar dynamic back in the third quarter of 2025 when a sharp rise in yields preceded a market downturn, so being hedged is prudent. The VIX index, a measure of expected volatility, has already jumped from 14 to over 18 in recent weeks, and buying VIX calls could be a way to profit from further market stress. Higher long-term US yields also typically make the US dollar more attractive to foreign investors. We should look for opportunities to go long the US dollar against currencies whose central banks are expected to cut rates sooner, such as the Euro. This can be expressed through futures contracts on the Dollar Index (/DX) or by selling call options on currency pairs like EUR/USD.

Dollar Positioning Implications

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NZD/USD fell for a third straight session on Thursday, trading near 0.5860 and down 0.90% on the day. The move followed a firmer US Dollar and higher geopolitical tension. The US Dollar Index DXY was near 99.70, close to its highest level since November. Markets reassessed US monetary policy expectations as inflation risks rose

Oil Prices And Fed Expectations

Higher Oil prices increased concern about persistent inflation and reduced expectations for near term Federal Reserve easing. Markets no longer fully price in a single 25 basis point cut this year The US Iran war reached its thirteenth day on Thursday, with attacks intensifying across the Middle East. Iran reportedly targeted commercial vessels near the Strait of Hormuz, a major Oil shipping route Mojtaba Khamenei said closure of the Strait of Hormuz could continue as a tactic against Iran’s adversaries. The International Energy Agency announced the release of 400 million barrels from emergency reserves, yet Oil prices stayed volatile The New Zealand Dollar remained under pressure amid risk off trading and higher energy costs. Attention now turns to Friday’s US data, including PCE inflation, Q4 GDP, Durable Goods Orders, and the University of Michigan Consumer Sentiment Index

Looking Back At Late 2025

Looking back at the end of 2025, we saw the US Dollar strengthen significantly due to the outbreak of the US Iran conflict and the resulting spike in oil prices. This fear of persistent inflation pushed the Federal Reserve into a very hawkish stance, causing pairs like NZD/USD to fall sharply. The market was pricing in a prolonged period of high US interest rates As of today, March 12, 2026, the situation has evolved, and that initial narrative is being tested. Recent US inflation data for February came in sticky at 3.2%, justifying the Fed’s decision to hold rates steady, but this is now widely expected. The key change is that the initial shock from the conflict has faded, with markets adapting to the geopolitical tensions Oil prices, which we saw surge well above $100 a barrel late last year, have now stabilized and are trading around $82 a barrel. This is largely because the emergency reserve releases from the IEA were effective and global shipping found alternative routes, reducing the immediate supply disruption fears. This price stability lessens the pressure on the Federal Reserve to consider further hikes based solely on energy costs Meanwhile, the Reserve Bank of New Zealand has been forced to react to the domestic inflation caused by that 2025 energy price shock. We have seen them hold their Official Cash Rate firm at a restrictive 5.50%, with recent statements suggesting they may need to stay higher for longer than even the Fed. This has started to provide a strong base of support for the Kiwi dollar Given this shift, the intense downward pressure on NZD/USD appears to be easing. We should now consider strategies that benefit from this potential bottoming out process, as the RBNZ’s hawkishness now rivals, if not exceeds, the Fed’s. Derivative traders could look at selling out of the money NZD/USD put options to collect premium, betting that the pair will not fall much further from current levels Create your live VT Markets account and start trading now.

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GBP/USD traded near 1.3350, falling for a third day as the US-Iran conflict escalated. The International Energy Agency agreed to release around 400 million barrels of oil from members’ strategic reserves to cool energy prices. Higher oil prices have added to inflation pressure, complicating expectations for a near-term Bank of England rate cut. A Reuters poll showed the BoE is expected to hold rates at 3.75% on 19 March, with 43 of 50 economists, or 86%, forecasting no change (up from 35% in the February poll).

Us Data And Risk Sentiment

US data came in stronger than expected, with the goods and services trade deficit narrowing to $54.5 billion in January from $72.9 billion in December. Initial jobless claims fell to 213K in the week ended 7 March, from a revised 214K, versus 215K expected. On the 1-hour chart, GBP/USD was around 1.3345, below the 20-period SMA at 1.3381 and the 100-period SMA at 1.3396, with RSI at 34. On the 4-hour chart, the 100-period SMA was near 1.3438 and the 20-period SMA near 1.3412, with RSI in the low 40s. Resistance levels were listed at 1.3370 and 1.3409, with support at 1.3339. A break below 1.3339 was linked to a move towards the mid-1.32s, while a move above 1.3409 would weaken the downside bias. We are seeing echoes of the situation from this time last year, when escalating Middle East tensions drove fears of an oil-driven inflation spike. Back in March 2025, those events pushed GBP/USD down towards 1.3350 as the market priced out a Bank of England (BoE) rate cut. Today, the pair is trading significantly lower near 1.2450, facing a similar but distinct set of pressures.

BoE Policy And Oil Market Backdrop

The BoE is once again in a difficult position, holding its Bank Rate at 4.25% ahead of its meeting next week. While UK inflation has fallen from its 2025 peaks, the latest CPI reading for January 2026 came in at a sticky 3.1%, still well above the bank’s 2% target. This persistent inflation complicates any discussion of rate cuts, much like the oil price shock did last year. Unlike the supply-side shock we saw in 2025, current oil prices are more influenced by global demand concerns. Brent crude is currently hovering around $82 per barrel, down from last year’s highs, but renewed OPEC+ production discipline is keeping prices firm. This provides a floor for energy prices, preventing a sharp drop in inflation that would give the BoE a clear green light to ease policy. On the other side of the currency pair, the US economy continues to show resilience, strengthening the dollar. The most recent Non-Farm Payrolls report for February 2026 showed the economy added 275,000 jobs, handily beating expectations and reinforcing the case for the Federal Reserve to remain patient. This dynamic, a hesitant BoE versus a patient Fed, is weighing heavily on the pound. Given this backdrop, we should consider that any strength in GBP/USD is an opportunity to position for further downside. Recent CFTC data shows that speculative net short positions against the pound have increased, suggesting market sentiment is decidedly bearish. Derivative traders could look to buy put options with a strike price below 1.2400 or use rallies toward the 1.2500 resistance level to initiate short futures positions. Create your live VT Markets account and start trading now.

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