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Gold’s current resilience in the face of the broad-based Dollar rally is raising the possibility that the recent decline has transitioned into a “Wyckoff Accumulation” phase. The sharp drop to 4,100 last week, followed by a swift recovery toward 4,600, suggests that what initially appeared to be a breakdown may instead have been a liquidity-driven flush, where supply was absorbed rather than expanded.

From a Wyckoff perspective, the move to 4100 can be interpreted as a potential “Selling Climax” (SC) after failing for a month from 5,419. Panic selling and triggered stops provided the liquidity for larger players to accumulate positions. The lack of sustained follow-through selling after the initial drop supports the idea that supply may have been largely exhausted, with the rebound acting as an “Automatic Rally” (AR) within a developing trading range.

Technically, the importance of the 4000–4100 zone reinforces this interpretation. The area aligns with key structural support, including the 55 W EMA (now at 4,024.10) and 38.2% retracement of 1,614.60 to 5,598.38 at 4,076.57. The strong defense of this zone adds weight to the argument that the market may be attempting to establish a base rather than continue its prior downtrend.

However, the accumulation thesis remains conditional and requires confirmation through two key tests. First, any renewed dip must form a successful “Secondary Test” (ST), ideally on lower volume, holding above the 41,00 region. Such price action would indicate that selling pressure has diminished and that demand is capable of absorbing residual supply.

Second, Gold must break through the resistance zone between 4,600 and 4,800. This area, defined by 38.2% retracement of 5419.02 to 4098.45 at 4602.90 and 55 D EMA (now at 4795.73), represents the upper boundary of the current range. A decisive move above this zone would signal a transition toward the “Markup” phase, confirming that accumulation has progressed sufficiently to support higher prices.

Until these conditions are met, the current structure remains a developing range rather than a confirmed reversal. Failure to hold above 4,100 on a retest would undermine the accumulation view and raise the risk that the broader decline from the March highs is still unfolding.

In the broader macro context, Gold’s ability to hold firm despite Dollar strength suggests that underlying demand is becoming more independent of traditional currency dynamics. This potential decoupling, if sustained, would further support the accumulation scenario, though it remains contingent on confirmation from both price structure and follow-through buying.

Sentiment in Europe deteriorated further in March, with the Economic Sentiment Indicator falling from February to 96.6 in the Eurozone and to 96.7 in the EU, both moving further below the long-term average of 100. The Employment Expectations Indicator also declined to 97.3 and 96.4 respectively.

The decline in sentiment was driven primarily by a sharp drop in confidence among consumers and retailers, with services also contributing modestly to the downside. Construction offered a partial offset with some improvement, while industrial confidence remained broadly stable.

Across major economies, the deterioration was uneven but broadly negative. France (-3.7) and Spain (-2.4) saw the largest declines. The Netherlands (-1.5) and Italy (-1.3) also recorded notable drops. Germany and Poland were relatively stable, but not strong enough to offset broader regional weakness.

Full EU and Eurozone ESI release here.

• Safe-haven demand, trade flows and shifting FOMC expectations are bolstering the DXY.
• The yen could benefit from capital repatriation.

The dollar index is approaching the highs of its 11-month range, whilst Donald Trump reports on successful negotiations with Iran. The US President has stated that Iran has met most of his 15 demands. There are rumours of a ground operation with various objectives, ranging from the capture of Kharg Island with its oil infrastructure to the seizure of 1,000 pounds of uranium belonging to Tehran.

The White House’s intentions are increasingly only heightening investor jitters, forcing them to flee to the US dollar as a safe haven. At the same time, rising oil prices are boosting demand for the greenback, as the currency benefits from higher oil prices. A third supportive factor is the shift in the Fed’s stance from imminent rate cuts to a readiness to raise rates to combat inflation.

In such conditions, macroeconomic data and monetary policy are destined to take a back seat. Bloomberg experts expect US employment to rise by 60,000 in March following a decline of 92,000 in February. Unemployment, in their view, will remain at 4.4%. However, an increasing number of FOMC officials view inflationary risks as a more pressing threat than a cooling labour market. As a result, the futures market is pricing in a 92% probability that rates will not fall in 2026, compared with just 4% before the conflict in the Middle East.

Meanwhile, rumours of Japan’s activity in the oil market and the intensification of verbal interventions have contributed to the retreat of USDJPY, which has pulled back from the psychologically important 160 level.

Eurizon SLJ Capital believes that as the conflict escalates, the US dollar will strengthen against most currencies, but not against the yen. The yen could benefit from capital repatriation amid a widespread decline in stock indices.

Despite attempts to rise, gold remains under pressure. The precious metal has transformed from a safe-haven asset into a source of liquidity. Investors are selling it to meet margin requirements on shares and bonds, whilst central banks are selling to support their economies and stabilise national currencies.

EUR/USD edged higher on Monday after earlier declines, reaching 1.1516. The US dollar continues to draw support from safe-haven demand amid the ongoing Middle East conflict, which has now entered its fifth week with no signs of resolution.

Tensions escalated following Donald Trump’s remarks regarding the possible confiscation of Iranian oil and control of the export hub on Kharg Island. At the same time, the US is increasing its military presence in the region and preparing for potentially prolonged operations. Iran-aligned forces, including the Houthis in Yemen, have also joined the conflict.

Rising oil prices in this environment are amplifying inflation risks and reinforcing expectations of tighter Federal Reserve policy. The market is increasingly pricing in the possibility of a rate hike this year, marking a notable shift from earlier expectations of rate cuts.

Investor focus now turns to US macroeconomic data. This week will see the release of labour market indicators, including JOLTS and ADP figures, as well as the key March employment report due on Friday.

Technical Analysis

On the H4 chart, EUR/USD is forming a consolidation range around 1.1528. A downside breakout is expected, with a continuation wave to 1.1404 as a near-term target, followed by a subsequent rebound to 1.1528. Technically, this scenario is confirmed by the MACD indicator – its signal line is below zero and pointing firmly downwards, reflecting sustained bearish momentum and the potential for the downtrend to persist.

On the H1 chart, the market is forming the structure of the next downward wave towards 1.1440. After reaching this level, a rebound to 1.1535 is expected, potentially extending the move to 1.1647. Technically, this scenario is confirmed by the Stochastic oscillator – its signal line is below 50 and pointing firmly downwards towards 20.

Conclusion

EUR/USD remains firmly driven by geopolitical forces, with the Middle East conflict entering its fifth week and showing no signs of de-escalation. The US dollar’s safe-haven appeal continues to dominate, while escalating tensions and rising oil prices have shifted market expectations from rate cuts to the possibility of a Fed hike later this year. Technical indicators point to further near-term downside, although this week’s US labour market data could introduce volatility. Until there is a tangible shift in the geopolitical landscape, the euro is likely to remain under pressure.

Daily Pivots: (S1) 212.15; (P) 212.65; (R1) 213.08; More...

GBP/JPY falls notably today but stays above 210.77 support. Intraday bias remains neutral first. on the upside, above 213.28/9 resistance will resume the rise from 207.20 to retest 214.98 high. However, firm break of 210.77 will argue that the pattern from 214.98 has entered its third leg already. Deeper decline should then be seen to 209.15 and then 207.20.

In the bigger picture, up trend from 123.94 (2020 low) is still in progress. Firm break of 214.98 will target 61.8% projection of 148.93 (2022 low) to 208.09 (2024 high) from 184.35 at 220.90. This will remain the favored case as long as 55 W EMA (now at 203.13) holds, even in case of another deep pullback.

Daily Pivots: (S1) 184.00; (P) 184.34; (R1) 184.81; More...

EUR/JPY falls notably today but stays above 183.17 minor support. Intraday bias remains neutral first. On the upside, break of 184.75 will resume the rise from 180.78 to retest 186.86 high. On the downside, however, below 183.17 minor support will turn bias back to the downside for 182.02 and below.

In the bigger picture, a medium term top could be in place at 186.86 and some more consolidations would be seen. Nevertheless, as long as 55 W EMA (now at 175.93) holds, the larger up trend from 114.42 (2020 low) remains intact. Firm break of 186.86 will pave the way to 78.6% projection of 124.37 (2022 low) to 175.41 (2025 high) from 154.77 at 194.88 next.

Daily Pivots: (S1) 0.8637; (P) 0.8650; (R1) 0.8664; More…

Intraday bias in EUR/GBP is mildly on the upside as rebound from 0.8610 resumes. Sustained trading above 55 D EMA (now at 0.8680) will confirm short term bottoming, and bring stronger rally back to 0.8788 resistance. However, rejection by 55 D EMA will set up another fall through 0.8611 to 100% projection of 0.8863 to 0.8611 from 0.8788 at 0.8536.

In the bigger picture, current development revived the case that whole rise from 0.8221 (2024 low) has completed at 0.8863, after rejection by 61.8% retracement of 0.9267 (2022 high) to 0.8221 at 0.8867. Sustained trading below 38.2% retracement of 0.8821 to 0.8863 at 0.8618 will confirm this case, and bring deeper fall to 61.8% retracement at 0.8466 at least. For now, medium term outlook is neutral at best as long as 0.8863 resistance holds.

Daily Pivots: (S1) 1.6651; (P) 1.6706; (R1) 1.6796; More...

Intraday bias in EUR/AUD stays on the upside at this point. Rebound from 1.6125 short term bottom is still in progress. Sustained break of 55 D EMA (now at 0.6756) will pave the way to 38.2% retracement of 1.8554 to 1.6125 at 1.7053. On the downside, below 1.6607 minor support will turn intraday bias neutral first.

In the bigger picture, fall from 1.8554 medium term top is seen as reversing the whole up trend from 1.4281 (2022 low). Deeper decline should be seen to 61.8% retracement of 1.4281 to 1.8554 at 1.5913, which is slightly below 1.5963 structural support. Decisive break there will pave the way back to 1.4281. For now, risk will stay on the downside as long as 55 W EMA (now at 1.7226) holds, even in case of strong rebound.

Switzerland’s KOF Economic Barometer fell sharply from 103.8 to 96.1 in March, missing expectations of 100.6 and pointing to a notable deterioration in growth momentum.

The decline reflects a broad-based slowdown, with both production and demand-side indicators weakening, suggesting that the economy is losing traction more quickly than anticipated.

The downturn is particularly evident in manufacturing and foreign demand, where indicator bundles showed a strong setback. Sub-components tracking exports, order backlogs, and the general business situation all came under pressure.

Within the producing sector, nearly all manufacturing sub-indicators deteriorated, with machinery, electrical equipment, metals, and paper industries showing pronounced weakness.

Full Swiss KOF release here.

We now expect RBA to hike in June and August as well as May, given the longer Middle East conflict and early signs of strong second-round pass-through from fuel to other prices.

We have revised our view of the outlook for RBA policy, adding two further hikes to the near-term profile and pushing out the eventual reversal. We now expect 25bp rate hikes at the 16 June and 11 August decisions, in addition to the 25bp hike we already expected at the May meeting. The peak for the cash rate is now expected to be 4.85%.

This shift reflects the longer disruption to and slower recovery in fuel supply assumed in the revised baseline forecasts we first published on Friday afternoon, with the Strait of Hormuz essentially closed for eight weeks and traffic recovering only slowly after that. It also reflects the surprisingly rapid pass-through of higher fuel and other oil-derived product prices into other prices in Australia. We believe the RBA will respond to this pricing behaviour by tightening monetary policy by more than would have been needed absent that pass-through.

The halving of fuel excise, announced by national cabinet today, reduces the near-term outlook for headline CPI inflation, but a peak of 5.4%yr in June quarter remains likely. The announcement also does not affect prices of other oil-related products, including aviation fuel and various plastics, or any price increases from damage to gas and other production facilities in non-combatant Gulf states. Much of the second-round pass-through of prices is therefore likely to remain in place, and we continue to expect trimmed mean inflation to peak around 4%yr later this year.

The higher cash rate profile will weigh on Australia’s economic outlook. Growth will be slower, especially consumption, and the labour market will be softer. We expect unemployment to peak around 5%, somewhat higher than the 4.7% peak we flagged last week. Headline inflation will dip below 2½% by mid 2027 and will remain in the lower half of the 2–3% target range through to 2028. Trimmed mean inflation will take a little longer to decline, but will be back in the target range in 2028.

A companion note, also to be released this afternoon, fleshes out the rest of the forecasts. The revisions incorporate the assumed longer closure of the Strait of Hormuz and other supply disruptions in the Middle East flagged last week. In addition, we have updated for the new profile for the cash rate, the changes to fuel excise and some other recent events.

Despite the weaker economic outlook and potential undershoot of the inflation target implied by these revised forecasts, we think the RBA will be slow to reverse this policy tightening and risks getting behind the curve in coming years. We push out the date for rate cuts and pencil in four rate cuts, one per quarter in February, May, August and November 2028. We have low conviction about the exact timing.

The RBA will have already been spooked by the way inflation kicked up late last year after it took back some of its earlier rate hikes (though the usual lags of policy imply that the cuts were not the cause of that increase in inflation). We therefore suspect that the unwind of the current policy tightening will involve something of a “one bitten, twice shy” mentality. Second-round pass-through to other prices and costs will only increase the RBA’s reluctance to unwind the current policy tightening.

We also believe the RBA’s evolving intellectual framework will militate against an early reversal of these hikes. A supply shock such as the one the world is now facing should ordinarily be looked through to the extent possible, so long as longer-term inflation expectations remain anchored. Because it believes Australia is starting from a position of little spare capacity, though, the RBA sees the supply shocks as a potential reason to have both a restrictive stance of policy and to revise up its view of what constitutes restrictive policy.

The RBA has insisted that it retains its earlier strategy of holding onto as much of the post-pandemic employment gains as possible, subject to meeting the inflation target. While inflation was actually in the 2–3% target range for part of last year, underlying inflation did not get all the way back to the 2½% target midpoint before lifting again. This is clearly being interpreted in some quarters as inflation having been above target continuously. The Monetary Policy Board will therefore want to demonstrate its commitment to returning inflation back to target expeditiously and its willingness to do what it sees as necessary to achieve this.

As noted last week, there are risks on both sides of our revised baseline view. Iran is already letting some ships through the Strait, and it is possible that fuel supply recovers faster than we are currently assuming. It is also possible that a consensus forms domestically to resist second-round inflation, especially where the flow-on of higher costs to downstream prices could be construed as excessive. On the more inflationary side, it is possible that the war drags on longer, or domestic pass-through is stronger than we currently expect.