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The Brent crude price shows no sings of cooling off today with the $100/b mark nearby. Hostile comments from both sides suggest no near-term end to the Middle East conflict with Iran’s Khamenei for example warning of potentially opening new fronts. The Internation Energy Agency said that the war is causing the largest supply disruption in the history of the global oil market. Only yesterday, its member agreed to release 400mn barrels from emergency reserves, but that failed to calm down prices. On the contrary. As the conflict drags on, interest rate money markets continue erring on the side of a different reaction function from central banks. In the case of Europe, they look towards interest rate hikes with German/EMU yields adding a few bps today. The German 10-yr yield today reached its highest level since October 2023 with underlying inflation dynamics doing the same. At 2.3% for Germany, they move further away from the “anchored” position they’ve been in over the past two years near the ECB’s 2% target. UK Gilts extend their underperformance. There, the bear flattening already turns into a bear steepening with yields adding 6 bps (2-yr) to 9 bps (30-yr) today. UK money markets switched from discounting a cumulative 50 bps of rate cuts by the end of this year at the end of February to currently attaching a 50% probability to a rate hike before year-end. The UK 2-yr yield surpasses the 4% mark with the UK 10-yr yield (4.76%) gradually closing in on a test of the 2024 high at 4.92%. Overall risk sentiment takes a new significant setback with main European and US indices losing around 1.5%. In FX space, dollar remains king with the trade-weighted greenback testing the YtD highs at 99.68 and EUR/USD testing the YtD lows just north of 1.15. Both are risk of a (USD) break higher. US eco data included January trade numbers. Based on strong export numbers (+5.5% M/M), our in-house KBC Nowcast for Q1 GDP jumps to 4% Q/Qa, but no strong conclusions should be drawn at this stage as the volatility in the data remains significant. We keep a close eye at the US Treasury’s 30-yr Bond auction tonight following weak 3-yr Note and 10-yr Note sales earlier this week.

News & Views

The German Kiel IFW Institute and the Ifo institute today published its Spring eco forecasts for Germany. The forecast of the Kiel Institute has a working assumption that commodity prices, consistent with market expectations, will stay significantly elevated only for a short period and then start to ease again. The Institute then sees a 0.6% of GDP loss of purchasing power this year. The Kiel Institute reduces its 2026 GDP growth forecast for Germany to 0.8% (from 1% Winter forecast). 2027 growth is still seen reaccelerating to 1.4%. Due to the rise in energy prices, inflation is forecast at 2.5% this year (from 1.8%) to still hold at 2.1% next year. The institute sees moderate export growth (0.3%) but this still causes Germany to lose global market share. It takes a guarded approach on the structural growth potential of the economy. “Without the stimulus measures bought with high budget deficits, the momentum would be so moderate that it does not qualify for a self-sustaining recovery.". The public deficit is projected to rise from 2.7% of GDP in 2025, to 3.7% this year and 4.2% in 2027. Ifo works with two scenarios. In a de-escalation scenario, GDP growth is seen at 0.8% this year and 1.2% next year. Without the energy price shock, IFO would have set a slight upward revision (to 1%), as the fiscal measures in the defense sector are having a faster impact. Inflation is expected to peak just below 2.5%. In the escalation scenario, the growth burden will increase to 0.8 ppt negative this year and next year compared to the pre-war scenario. Inflation then remains higher for longer and peaks at just under 3%. This is not only due to energy prices, but also as higher production costs will be passed on to the prices of other goods and services. The ECB is than expected to respond by raising the policy interest rate by a total of 50 basis points in H2. With GDP growth of just 0.6% and 0.8% this year and next year, the recovery will continue.

Indian inflation accelerated from 2.74% Y/Y in January to 3.02% in February. Food prices in the same context rose from 2.13% Y/Y to 3.46%. The rise in inflation was slightly more than expected. Even so inflation currently holds well with the 4% +/-2% inflation target range of the Reserve Bank India (RBI) RBI over last year reduced the policy rate from 6.5% to currently 5.25%. It left the policy rate unchanged at the February meeting. As the case for most other countries, the rise in energy prices also here poses upside inflation risks, with the rupee trading at all-time lows against the dollar, adding to those risks. USD/INR currently trades near 92.2. According to Bloomberg reporting, referring to people familiar with the matter the RBI today conduced FX swaps support the rupee.

• The US Dollar remains strong, driven by safe-haven flows from ongoing geopolitical conflicts and rising inflationary concerns.
• Expectations for US rate cuts have fallen sharply from 66 basis points (bps) to around 30 bps due to the potential impact of high oil prices on inflation.
• GBP/USD is caught in a technical tug-of-war, facing immediate resistance at the 100-day moving average of 1.34376.

GBP/USD has found support in early trade around the 1.3360 handle. A stellar rally from the Monday lows ran into resistance provided by the 100-day MA at 1.3437 as risk off sentiment returned and the US Dollar strengthened.

Will USD strength keep further gains at bay?

The rise in GBP/USD today comes as the US Dollar index retreats from a multi month resistance level at 99.57.

If this level holds and DXY continues to decline then GB/USD could retest the 100-day MA and finally the psychological 1.3500 handle.

Cable's fate is very much tied to the US Dollar at the moment, while the US Dollars is tied to overall risk sentiment as well as inflationary concerns. Given the steep rise in oil prices and the impact it may have on gasoline prices, markets expect a potential 3% rise in headline inflation next month.

These developments are also keeping the US Dollar supported as rate cut expectations have fallen from around 66 bps two weeks ago to around 30 bps as of this morning.

US Dollar Index Daily Chart, March 12, 2026

Source: TradingView

What next for the Dollar and GBP/USD?

Financial markets remain primarily focused on the duration of current geopolitical conflicts and the resulting supply shocks.

Recent emergency measures intended to mitigate oil supply disruptions may have inadvertently signaled to investors that global leaders anticipate a prolonged period of tension rather than a swift de-escalation, a sentiment reflected in yesterday's volatile oil and equity performance.

Furthermore, market sensitivity to optimistic military updates from the Trump administration appears to be waning, as investors grow increasingly skeptical of claims regarding the achievement of strategic objectives.

While the fx market continues to be driven by immediate headlines, the broader signals emanating from equity and energy sectors currently suggest a bullish outlook for the US Dollar, especially if the conflict drags on for a prolonged period.

Tomorrow's US PCE data may also take a backseat to the geopolitical situation as markets know that any inflation numbers at the moment are out of touch with the new reality.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Technical Analysis - GBP/USD

From a technical perspective, the pair is currently caught in a tug-of-war between a long-term downtrend and a significant horizontal support zone.

While the British Pound has shown resilience, the US Dollar remains dominant due to safe-haven flows stemming from the ongoing conflict in the Middle East and concerns over the Strait of Hormuz.

Technical Indicators

Simple Moving Averages (SMA):

• 100-period SMA (Blue): Currently at 1.34376. This acts as immediate dynamic resistance. The price is currently trading below this line, confirming a bearish bias on the 4-hour timeframe.
• 200-period SMA (Dark Blue): Sitting higher at 1.35543. The fact that the 100-SMA is below the 200-SMA indicates that the medium-term trend remains firmly to the downside.

The RSI period-14 is currently at 51.20, which is usually a sign that momentum has shifted to potentially favor bulls.

Trading Outlook

• Bearish Case: If the pair fails to break above the 100-period SMA (1.34376), expect a retest of the 1.33788 support. A break below the recent low of 1.33332 would open the door to 1.3250.
• Bullish Case: A sustained move above 1.3450 would invalidate the immediate bearish structure, potentially leading to a test of the 200-period SMA near 1.3550.

GBP/USD Daily Chart, March 12, 2026

Source:TradingView.com

Canada's trade deficit widened substantially in January, up to $3.6 billion from $1.3 billion in December.

Exports in January slipped 4.7% month-on-month (m/m), more than reversing last month's gain. Exports of motor vehicles and parts fell sharply (-21.2% m/m) to its lowest level since late-2021. In line with recent trends, exports of unwrought gold, silver and platinum groups were volatile, down by 12.6% m/m. Energy exports, led by natural gas (+23.7% m/m) provided a bit of an offset. In total, 6 of 11 product categories registered a decrease on the month.

Goods imports fell in January (-2.2% m/m), with 7 of 11 subsectors booking a decline. Imports of motor vehicles and parts (-8.3% m/m) was also the biggest contributor to the contraction. A 3.6% m/m dip in electronic and electrical equipment also dragged the headline lower, with industrial machinery and equipment (+3.4% m/m) providing an offset.

In volume terms, exports sagged by 5.8% m/m while imports fell by a lesser 2.2% m/m.

Canada's merchandise trade surplus with the United States narrowed from $5.7 billion in December to $5.3 billion in January. Exports to non-U.S. destinations fell by 6.5% m/m after reaching an all-time high last months.

Key Implications

Trade activity had a chilly start to 2026. Much of the weakness however came through the auto sector as prolonged seasonal production stoppages muddied both the export and import numbers – we expect some improvement as conditions normalize over the next couple of month. The recent sharp increase in oil prices won't materialize in Canada's trade balance until March, so with the limited data we have for the quarter, net trade will likely be a drag on Q1-2026 real GDP growth.

The recent U.S. Supreme Court ruling striking down the IEEPA tariffs is a small net positive for Canada, reducing tariffs on non-USMCA compliant exports from 35% to 10% and marginally lowering the country's effective tariff rate. Now, the main focus is the upcoming CUSMA review, due by July 1st. Our base case is that the agreement remains in place, though the possibility of scenarios involving U.S. withdrawal will continue to weigh on business confidence and investment.

Daily Pivots: (S1) 1.1590; (P) 1.1628; (R1) 1.1650; More….

Intraday bias in EUR/USD stays neutral for the moment. On the downside, firm break of 1.1506 will resume the fall from 1.2081 and target 38.2% retracement of 1.0176 to 1.2081 at 1.1353 next. Overall, near term outlook will stay cautiously bearish as long as 1.1740 support turned resistance holds.

In the bigger picture, a medium term top should be in place at 1.2081 on bearish divergence condition in D MACD. Sustained trading below 55 W EMA (now at 1.1500) should confirm rejection by 1.2 key cluster resistance level. That would also raise the chance that whole up trend from 0.9534 (2022 low) has completed as a three wave corrective bounce too. For now, medium term outlook is neutral at best as long as 1.2081 holds, even in case of rebound.

Daily Pivots: (S1) 1.3392; (P) 1.3438; (R1) 1.3463; More...

Intraday bias in GBP/USD remains neutral at this point. Further decline is expected with 1.3574 resistance intact. On the downside, below 1.3252 will extend the decline from 1.3867 to 1.3008 structural support. Decisive break there will carry larger bearish implications.

In the bigger picture, considering bearish divergence condition in both D and W MACD, a medium term top should be in place from 1.3867. Firm break of 1.3008 support will argue that fall from 1.3867 is at least corrective the whole rise from 1.0351 (2022 low) with risk of bearish reversal. That would open up further decline to 38.2% retracement of 1.0351 to 1.3867 at 1.2524. For now, medium term outlook will be neutral at best as long as 1.3867 resistance holds, or under further development.

Daily Pivots: (S1) 0.7775; (P) 0.7792; (R1) 0.7820; More….

Intraday bias in USD/CHF stays neutral for the moment. On the downside, break of 0.7671 support will revive near term bearishness and bring retest of 0.7603 low. Decisive break there will resume larger down trend. On the upside, though, break of 0.7877 will bring stronger rally to 0.8039 resistance next.

In the bigger picture, a medium term bottom could be in place at 0.7603 on bullish convergence condition in D MACD, Firm break of 0.8039 resistance will argue that it's at least correcting the down trend from 0.9002. Stronger rebound would then be seen to 38.2% retracement of 0.9200 to 0.7603 at 0.8213. However, break of 0.7603 will resume the down trend to 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382.

Daily Pivots: (S1) 158.23; (P) 158.60; (R1) 159.34; More...

Intraday bias in USD/JPY remains on the upside as rise from 152.07 is still in progress. Firm break of 159.44 will target 161.94 high next. On the downside, below 157.26 support will turn intraday bias neutral again. Overall, price actions from 159.44 are viewed as a near term consolidation pattern. Outlook will remain bullish as long as 38.2% retracement of 139.87 to 159.44 at 151.96 holds.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 152.16) holds. However, sustained break of 55 W EMA will argue that the pattern from 161.94 is extending with another falling leg.

Global markets have entered a fragile calmness as investors await the next major catalyst. With only second-tier data scheduled and Fed officials in their pre-meeting blackout period, the usual policy signals that guide markets are temporarily absent. Barring any dramatic geopolitical development, this vacuum has shifted the spotlight entirely onto technical levels.

The first critical area to watch lies in the U.S. equity market. While the broader indexes have shown some resilience, the weakness in U.S. futures suggests a cautious hand-off to the regular trading session. The key to watch is this week's low of 46,615.52 in DOW. While a breach of this level seems unlikely within the next few hours, a move in that direction would signal that the “buy the dip” sentiment is fading. Such a development could quickly shift market psychology toward defensive positioning, especially given the heightened geopolitical risks surrounding the Iran war.

Meanwhile, the bond market is delivering its own warning signal through the sharp rise in Treasury yields. 10-year yield surged above 4.2% handle yesterday, highlighting persistent concerns that the energy shock caused by the conflict could reignite inflation pressures. Remaining above 4.2% suggests that markets are beginning to price in a scenario where inflation proves more persistent than expected. In that case, the Fed may be forced to turn to a more hawkish stance despite broader concerns about global growth.

If yields extend toward the 4.3% level, it would reinforce the view that investors expect the Fed to signal stronger inflation vigilance at next week’s meeting. The market would effectively be preparing for a shift away from the earlier narrative of steady policy easing in 2026.

Oil markets are the third and most volatile piece of the current puzzle. Brent crude’s return to the 100 level represents a major psychological barrier for traders and a critical threshold for global inflation expectations. What makes the move particularly striking is that it comes despite the IEA’s unprecedented 400-million-barrel reserve release. Rather than suppressing prices, the intervention has highlighted the scale of the supply disruption currently facing global energy markets.

These three forces—equities, bond yields and oil prices—are now closely interconnected. A sustained break above $100 in oil would likely push Treasury yields higher as inflation expectations rise, which in turn could place additional pressure on equity markets.

In the currency market, Aussie remains the strongest currency for the week so far as markets continue to price in aggressive RBA tightening. Dollar follows, while Kiwi ranks third. Swiss Franc sits at the bottom of the table, followed by Euro and Yen, with Sterling and the Canadian Dollar trading closer to the middle of the performance spectrum.

In Europe, at the time of writing, FTSE is down -0.40%. DAX is down -0.35%. CAC is down -0.55%. UK 10-year yield is up 0.067 at 4.691. Germany 10-year yield is up 0.009 at 2.949. Earlier in Asia, Nikkei fell -1.04%. Hong Kong HSI fell -0.70%. China Shanghai SSE fell -0.10%. Singapore Strait Times fell -0.17%. Japan 10-year JGB yield rose 0.022 to 2.188.

US initial jobless claims fall to 213k, vs exp 215k

US initial jobless claims fell -1k to 213k in the week ending March 7, below expectation of 215k. Four-week moving average of initial claims fell -4k to 212k.

Continuing claims fell -21k to 1,850k in the week ending February 28. Four-week moving average of continuing claims fell -500 to 1,852k.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 158.23; (P) 158.60; (R1) 159.34; More...

Intraday bias in USD/JPY remains on the upside as rise from 152.07 is still in progress. Firm break of 159.44 will target 161.94 high next. On the downside, below 157.26 support will turn intraday bias neutral again. Overall, price actions from 159.44 are viewed as a near term consolidation pattern. Outlook will remain bullish as long as 38.2% retracement of 139.87 to 159.44 at 151.96 holds.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 152.16) holds. However, sustained break of 55 W EMA will argue that the pattern from 161.94 is extending with another falling leg.

US initial jobless claims fell -1k to 213k in the week ending March 7, below expectation of 215k. Four-week moving average of initial claims fell -4k to 212k.

Continuing claims fell -21k to 1,850k in the week ending February 28. Four-week moving average of continuing claims fell -500 to 1,852k.

Full US jobless claims release here.

Key takeaways

• Extreme oil volatility amid geopolitical risks: West Texas Intermediate crude oil has swung violently during the ongoing US–Iran war 2026, rallying to a 4-year high of $119.54, plunging to $76.83, and then rebounding as fears of disruption around the Strait of Hormuz intensified.
• IEA stockpile release fails to cap prices: Despite the International Energy Agency announcing a record 400-million-barrel emergency reserve release by G-7 nations, oil prices surged again as Iran escalated retaliatory attacks on Gulf oil infrastructure and threatened tanker traffic.
• Technical trend remains bullish above key support: WTI has held its ascending trendline support with $88.36 as the key short-term level; holding above it keeps the bullish uptrend intact toward $102.25 and $116–$119, while a break lower could trigger a deeper pullback toward $81–$76.

Oil prices have swung sharply in both directions since the start of the week, reacting to rapidly shifting geopolitical developments surrounding the US–Iran war 2026, which has now entered its 13th day. Heightened uncertainty over potential supply disruptions in the Strait of Hormuz, a critical global energy chokepoint, has kept energy markets highly volatile.

On Monday, 9 March 2026, the West Texas (WTI) crude oil rallied hard by 30% at the Asian open to hit a 4-year high of $119.54/barrel before it tumbled by 35% to print an intraday low of $76.83 on Tuesday, 10 March 2026’s US session; due to US President Trump’s remarks that touted the “end of the US-Iran war is soon” and the expected historical amount of coordinated release of stockpile of oil reserves among G-7 nations of more than 183 million barrels released in 2022 after Russia invaded Ukraine.

On Wednesday, 11 March 2026, the International Energy Agency (IEA) made the official announcement to release 400 million barrels from emergency oil reserves of G-7 nations, its largest ever release, with 172 million barrels coming from the US.

Iran’s retaliatory attacks on Gulf states’ oil assets overshadowed the IEA’s historical stockpile release

However, WTI crude oil surged by 13% despite news of a historic stockpile release by the International Energy Agency, reaching an intraday high of $96 during the Asian session on 12 March 2026 at the time of writing.

Iran has continued to intensify its retaliatory attacks on the oil assets of other Gulf countries, on top of the “indirect closure” of the Strait of Hormuz, where Iran has threatened to destroy any “unfriendly” oil tankers passing through the strait.

Let's now focus on the potential short-term trajectory (1 to 3 days) of WTI crude oil from a technical analysis perspective.

WTI Crude Oil – Held at ascending trendline support from 26 February 2026

Fig. 1: West Texas Oil CFD minor trend as of 12 Mar 2026 (Source: TradingView)

The recent declines seen in the West Texas Oil CFD (a proxy of the WTI crude oil futures) on Tuesday, 10 March, and Wednesday, 11 March have managed to stall at a minor ascending trendline support in place since the 26 February 2026 low of $63.68 that kickstarted the most recent bullish impulsive up move sequence of 87% to print the current 4-year high of $119.54.

Watch the $88.36 key short-term pivotal support to maintain the current minor bullish up leg in the West Texas Oil CFD for the next intermediate resistance to come in at $102.25, and a clearance above it may see a retest on $116.56/119.54 next in the first step.

However, a break with an hourly close below $88.36 negates the bullish tone to expose the next intermediate supports at $81.85 and $77.26/76.83. A break below $76.83 increases the odds of a further minor corrective decline to mean-revert towards $69.80 and $63.68 (also the 20-day and 50-day moving averages).

Key elements to support the bullish bias on WTI crude oil

• The recent declines seen in the West Texas Oil CFD (a proxy of the WTI crude oil futures) on Tuesday, 10 March, and Wednesday, 11 March have managed to stall at a minor ascending trendline support in place since the 26 February 2026 low of $63.68 that kickstarted the most recent bullish impulsive up move sequence of 87% to print the current 4-year high of $119.54.
• The hourly RSI momentum indicator has formed a prior bullish divergence condition at its oversold region on Tuesday, 10 March 2026.