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• The Dow climbed a slim 120 points on Monday as traders reacted to Friday's stronger-than-expected jobs report and weighed Iran ceasefire prospects.
• Institute for Supply Management Services data showed a sharp drop in employment and a surge in prices paid, raising stagflation concerns.
• Crude Oil prices whipsawed as reports emerged of a potential 45-day ceasefire framework between the US and Iran.
• Wall Street is coming off its best weekly performance since late November, snapping a five-week losing streak across all three major indexes.

The Dow Jones Industrial Average (DJIA) gained a scant 120 points, or 0.3%, on Monday in the first session following the Good Friday market closure. The index pushed toward 46,700 in early trading before fading through the midday session and ultimately settling around 46,500. The S&P 500 ticked up 0.4% and the Nasdaq Composite added 0.5%, extending last week's rally that saw gains of 3%, 3.4%, and 4.4% respectively. Monday's session marked the first opportunity for traders to digest Friday's blowout March Nonfarm Payrolls (NFP) report, which showed the economy added 178K jobs against expectations for just 60K.

Services sector growth cools as prices surge

The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) came in at 54 for March, below the consensus forecast of 55 and down from 56.1 in February. The headline number marked a 21st consecutive month of expansion, but the subcomponents told a more concerning story. The Employment Index plunged to 45.2 from 51.8, its lowest reading since December 2023 and a sharp reversal into contraction territory. The Prices Paid Index jumped to 70.7 from 63, reflecting the pass-through of elevated Oil prices and fuel costs tied to the Middle East conflict. ISM chair Steve Miller noted that Iran-related cost impacts dominated respondent commentary, with companies across industries reporting higher gas and diesel pricing. On a more positive note, the New Orders Index climbed to 60.6 from 58.6, its highest level since February 2023, suggesting demand in the services economy remains resilient even as cost pressures build.

Ceasefire speculation drives volatile Oil trading

Oil prices swung sharply throughout Monday's session as conflicting reports on US-Iran diplomacy kept traders guessing. A draft proposal put together by Egyptian, Pakistani, and Turkish mediators called for a 45-day ceasefire and the reopening of the Strait of Hormuz, but Iran rejected it outright. Foreign ministry spokesperson Esmail Baghaei called the proposal "illogical," stating that Tehran demands a permanent end to the war with guarantees against future attacks rather than a temporary halt to fighting. Despite the rejection, US equities shrugged off the headline and held onto gains, suggesting markets may be growing desensitized to the back-and-forth of failed diplomatic efforts. West Texas Intermediate (WTI) crude for May delivery was last up 0.7% above $112 per barrel, while Brent crude gained 0.6% above $109. President Donald Trump warned Sunday that the US would strike Iran's power plants and bridges if the Strait isn't reopened by Tuesday, though he walked back the rhetoric somewhat on Monday. Michael Rosen, chief investment officer at Angeles Investments, cautioned that markets may be underestimating the magnitude of the energy disruption, warning that prices could stay elevated for longer than expected.

Jobs data lands strong but wage growth softens

Friday's March NFP report showed 178K jobs added, nearly three times the consensus estimate of 60K, with healthcare accounting for 76K of the gain as striking Kaiser Permanente workers returned to payrolls. The unemployment rate edged down to 4.3%. However, average hourly earnings rose just 0.2% MoM, with the YoY rate slipping to 3.5%, the lowest since May 2021. February's payroll figure was also revised sharply lower to a loss of 133K from the initially reported 92K decline. The combination of a headline beat driven largely by strike resolution and cooling wage growth left the broader labor market picture largely unchanged. Futures markets reflected virtually no probability of a Federal Reserve (Fed) rate move at the April 28-29 Federal Open Market Committee (FOMC) meeting, with a 77.5% chance the Fed holds rates steady at 3.50%-3.75% through year-end, according to the CME FedWatch tool.

Inflation data in focus later this week

Attention now turns to a pair of high-impact inflation releases later in the week. On Thursday, the Bureau of Economic Analysis (BEA) will publish the third estimate of fourth-quarter Gross Domestic Product (GDP) alongside the Personal Consumption Expenditures Price Index (PCE), the Fed's preferred inflation gauge. February's headline Consumer Price Index (CPI) came in at 2.4% YoY, and the March CPI release on Friday will be closely watched for any early signs of Oil-driven price acceleration filtering into broader consumer costs. With ISM manufacturing prices already at their highest since June 2022 and services prices now surging, the inflation outlook heading into the second quarter is becoming increasingly uncomfortable for a Fed that remains firmly on hold.

Dow Jones 5-minute chart

Here is what you need to know for Tuesday, April 7:

The US Dollar Index (DXY) fell towards the 100.00 area on Monday as markets were weighed by United States (US) President Donald Trump’s latest Strait of Hormuz ultimatum against growing hopes for a ceasefire framework between the US and Iran. Those de-escalation hopes softened the Greenback’s haven appeal, even as the broader macro backdrop remained supportive, driven by elevated oil prices and a more cautious Federal Reserve outlook.

Later in the day, the US ISM Services PMI showed growth slowed to 54 in March from 56.1, while prices paid jumped sharply, reinforcing concerns that war-related energy shocks are feeding inflation.

EUR/USD surged near the 1.1550 region, but upside remained capped after bouncing from intraday lows. The pair found support as improving sentiment around a possible Iran ceasefire undermined the Greenback, although gains were limited as traders stayed cautious ahead of further news from the Iran war.

GBP/USD climbed toward the 1.3240 zone, posting solid gains as the Pound benefited from a softer US Dollar. Cable drew support from reports of possible de-escalation in the Middle East, even as Trump insisted that Tuesday’s deadline for Iran to make a deal remained final.

USD/JPY trades muted after being highly volatile early in the day near the 159.70 area as the Japanese Yen (JPY) found some support from the weaker Dollar and renewed focus on potential Japanese intervention near the 160.00 threshold.

AUD/USD advanced toward the 0.6920 region, with the Aussie outperforming as risk-sensitive assets gained on hopes that US-Iran negotiations could eventually bring the conflict closer to a truce.

West Texas Intermediate (WTI) Oil remains elevated above the $112.00 mark, trading neutral at the time of writing. Crude stayed underpinned by the ongoing Strait of Hormuz disruption and Trump’s threat to intensify strikes if the waterway is not reopened, though ceasefire headlines and OPEC+’s agreement to boost May’s output helped prevent an even sharper rally.

Gold hovers around the $4,660 area, little changed on the day after earlier weakness. Bullion remained underpinned as investors headed for riskier assets late in the American session.

What’s next in the docket:

Tuesday, April 7

• Australia TD-MI Inflation Gauge March YoY
• EU HCOB PMIs
• EU Sentix Investor Confidence
• US Durable Goods Orders
• Canadian Ivey PMI
• JPY Labor Cash Earnings
• JPY Current Account
• NZ RBNZ Interest Rate Decision
• NZ RBNZ Monetary Policy Review

Wednesday, April 8

• NZ RBNZ Press Conference
• EU Retail Sales
• EU Non-Monetary Policy ECB Meeting
• US FOMC Minutes

Thursday, April 9

• EUR Trade Balance
• US PCE Price Index
• US GDP
• US Initial Jobless Claims
• US Personal Income
• US Personal Spending
• NZ Business NZ PMI
• CNY CPI
• CNY PPI

Friday, April 10

• EU Harmonized Index of Consumer Prices
• Canadian Employment data
• US CPI
• US Factory Orders
• US Michigan Consumer Index’s
• US UoM 1-year Consumer Inflation Expectations
• US UoM 5-year Consumer Inflation Expectation
• US Monthly Budget Statement

UOB Global Economics & Markets Research highlights that Vietnam’s headline CPI jumped to 4.65% year-on-year in March 2026, driven by higher energy costs, pushing inflation above the State Bank of Vietnam’s 4.5% target. As the shock is seen as supply-driven, UOB expects no policy tightening and projects the SBV refinance rate will stay at 4.50% through 2026.

Supply-driven inflation keeps SBV on hold

"The most notable difference this quarter is that headline consumer price index jumped to 4.65% y/y in Mar 2026, from an average of 2.94% in Jan-Feb."

"The latest inflation rate is now above SBV’s target of 4.5%."

"With inflation rate expected to rise further in the months ahead and much more above the 4.5% target, the focus will be on the State Bank of Vietnam (SBV)’s policy stance."

"Given that the price increases are driven by supply rather than demand, policy tightening is not the right response."

"Based on the above factors, we expect SBV to stay on hold with its refinance rate at 4.5% through 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• WTI Crude Oil futures briefly spiked above $115 while spot holds near $104 on Trump's Iran threat
• Trump threatened to destroy Iranian power plants and bridges by midnight Tuesday if the Strait of Hormuz is not reopened.
• WTI futures surged nearly 12% last Thursday; spot crude rallied but is holding well below futures near $104.
• Iran rejected both the ultimatum and a Pakistan-brokered 45-day ceasefire proposal.

WTI Crude Oil saw sharply diverging price action across the spot and futures markets on Monday. May futures spiked to about $115 in early dealing, before pulling back near $112, roughly flat against Thursday's settlement. In the spot market, price traded in a tighter range, slipping 0.2% to settle near $104 after touching a session high close to $106 and a low around $101. The widening gap between spot and front-month futures reflects the extreme backwardation gripping Crude Oil markets, with traders pricing a significant near-term delivery premium tied directly to Tuesday's deadline.

President Donald Trump issued an expletive-laden threat on Truth Social on Sunday, warning that Tuesday would be "Power Plant Day, and Bridge Day, all wrapped up in one" if Iran does not reopen the Strait of Hormuz by 8 pm Eastern Time. Trump said a deal was still possible but added that if one is not reached, "I am blowing up everything." Iran rejected the ultimatum; the country's Foreign Ministry spokesman said negotiations cannot proceed under threats of war crimes, and a deputy in the president's office said the Strait would only reopen after reparations for war damage are paid. The Strait of Hormuz has been effectively closed to most commercial shipping since late February, when the US and Israel launched strikes on Iran, removing an estimated 17 to 18 million barrels per day from normal transit flows.

A Pakistan-brokered 45-day ceasefire proposal was put to both sides over the weekend, with foreign ministers from Pakistan, Egypt, and Turkey shuttling messages between Washington and Tehran. Iranian officials rejected the proposal, and mediators are said to be less optimistic that any deal is close before Tuesday's deadline. Meanwhile, the Energy Information Administration (EIA) reported US crude inventories rose by 5.5 million barrels for the week ending March 27, and OPEC+ approved a 206K barrels-per-day output hike for April, but neither bearish factor has been able to offset the geopolitical risk premium, which Goldman Sachs estimates sits between $14 and $18 per barrel.

WTI Spot 5-minute chart

Technical Analysis

In the 5-minute chart, WTI US OIL trades at $103.97. The near-term bias is mildly bullish as price holds comfortably above the rising 200-period exponential moving average near $102.90, confirming an intraday uptrend structure despite the latest pullback. The earlier push toward the $104.80 area coincided with a Stochastic RSI peak above 80, and the oscillator has since retreated toward oversold territory, indicating fading upside momentum but not a full trend reversal while price stays above the long-term intraday average.

Immediate support emerges at $104.00, with a break lower exposing the 200-period EMA region around $102.90 as the next key intraday floor, followed by deeper support near $102.50. On the topside, initial resistance aligns with the recent high at $104.80, and a clear move above this level would reopen the path toward the $105.50 zone. As long as $102.90 holds on closing bases, dip-buying interest is likely to prevail on this timeframe, while a decisive drop through that level would neutralize the current bullish bias.

(The technical analysis of this story was written with the help of an AI tool.)

• Gold gave back gains as Iran ceasefire hopes faded sharply.
• Rising oil prices and a firmer US Dollar weighed on bullion.
• Strong US data reinforced expectations for a steady Fed outlook.

Gold (XAU/USD) price recoiled during the North American session on Monday after hitting a daily high of $4,706, but news that an agreement between the US and Iran seems unlikely, along with military preparations for potential strikes, drove the yellow metal lower.

Bullion eases as war risks persist and Fed hold bets stay firm

At the time of writing, XAU/USD trades at $4,652, weighed down by the rise in WTI, which is up 1,40% at $113.64 per barrel. In addition, the Greenback is trimming some of its earlier losses, back above the 100.00 handle, according to the US Dollar Index (DXY).

The DXY, which measures the US Dollar's performance against six others, falls 0.19%. US Treasury yields are trimming some of their earlier losses, with the 10-year T-note yielding 4.337%.

The Wall Street Journal revealed that the US military is “making preparations for potential strikes on energy targets in Iran,” according to multiple US officials. Recently, US President Donald Trump said that “Iran can be taken out in one night, might be Tuesday night.”

Trump’s initial deadline was April 6, but he delayed the attacks to April 7 at 8:00 PM ET if Iran fails to comply with US demands, which include the immediate reopening of the Strait of Hormuz.

Recently, Iran rejected ceasefire proposals, which included efforts by Pakistan, Egypt and Turkey to secure a 45-day pause of hostilities to set the stage for a full resolution of the conflict.

Fed expected to keep rates steady; services PMI in the US disappoints

Meanwhile, business activity in the US services sector slowed, according to the Institute for Supply Management (ISM). The ISM Services PMI in March eased to 54 in March from 56.1, missing expectations of 55. The prices paid sub-component of the PMI surged to its highest level since October 2022, to 70.7, due to higher energy costs, according to Steve Miller, Chair of the ISM Services Business Survey Committee.

Last Friday, the US Nonfarm Payrolls surprised markets, as the economy added 178K Americans to the workforce, exceeding estimates of 60K and February’s downwardly revised print of -133K. Based on all the data, the economy averaged 68K in the first three months.

Consequently, the Unemployment Rate edged down from 4.4% to 4.3%, beneath the Federal Reserve’s 4.5% target for 2026. This erased the Fed’s dovish bets as depicted by money markets, which now expect the US central bank to keep rates steady throughout the whole year, according to Prime Market Terminal data.

The US economic docket will be busy, as traders eye Durable Goods Orders, speeches by Fed officials, the minutes of the FOMC's last meeting, growth data, Initial Jobless Claims and inflation figures.

XAU/USD technical analysis: Gold struggles at $4,700, sellers target the 100-day SMA

Gold price faces key resistance at $4,700, and retreated towards the 100-day Simple Moving Average (SMA) at $4,639. Bulls seem to be losing traction, as indicated by the Relative Strength Index (RSI), which remains bearish and is approaching oversold territory.

If XAU/USD finishes on a daily basis below the 100-day SMA, this clears the path to challenge $4,600. Below here, the next area of interest is the April 2 daily low at $4,553, ahead of $4,500. Conversely, if Gold rallies past $4,700, the first area of supply overhead is the 20-day SMA at $4,755. On further strength, $4,800 lies up next.

• Silver trades in a narrow range as US-Iran war headlines keep markets cautious.
• Initial optimism over a potential ceasefire faded amid conflicting headlines on ceasefire negotiations.
• Technically, XAG/USD remains under pressure below the 100-day SMA, keeping the near-term bias weak.

Silver (XAG/USD) trades in a narrow range on Monday as geopolitical tensions in the Middle East keep markets on edge, while traders refrain from placing aggressive directional bets amid conflicting headlines over efforts to end the US-Iran war.

At the time of writing, XAG/USD is trading around $73, with modest US Dollar softness helping cushion the downside. However, upside remains capped as rising Oil prices fuel inflation concerns and reinforce expectations that the Federal Reserve (Fed) will keep interest rates higher for longer.

Earlier on Monday, optimism rose following reports from Axios that the US and Iran, along with regional mediators, are discussing a potential 45-day ceasefire.

However, that optimism proved short-lived after IRNA reported that Iran rejected a ceasefire proposal conveyed via Pakistan and submitted a 10-point response. The proposal reportedly includes demands such as an end to conflicts in the region and a framework for safe passage through the Strait of Hormuz.

No meaningful breakthrough has emerged, with attention now turning to the deadline set by US President Donald Trump, due on Tuesday at 8:00 p.m. Eastern Time. Trump has warned of strikes on Iran’s energy and civilian infrastructure if the Strait of Hormuz is not reopened.

From a technical perspective, XAG/USD maintains a bearish-to-neutral outlook, with repeated rejection near the 100-day Simple Moving Average (SMA) and price holding well below the 50-day SMA.

Initial resistance is seen at the 100-day SMA at $75.84 and a sustained move above this level could pave the way toward the 50-day SMA around $82.35. Beyond that, the February swing high near $96.62 stands as the next major upside barrier.

On the downside, immediate support lies in the $70-$68 zone, followed by the March low near $61.01, which aligns closely with the 200-day SMA at $59.24.

The Relative Strength Index (RSI) at 43 points to persistent but not extreme selling pressure. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator has turned slightly positive but remains near the zero line, suggesting that downside momentum is fading but not yet fully reversed.

XAU/USD Current price: $4,650

• Middle East crisis maintains financial markets in risk-averse mode.
• The March US ISM Services PMI painted a gloomy picture when reading between lines.
• XAU/USD under sellers' control despite holding within familiar levels.

Spot Gold consolidates at around $4,660 on Monday, little changed on a daily basis, yet lower compared to Friday’s close. Financial markets are all about sentiment at the beginning of the week, with the mood swinging at the rhythm of Iran war headlines.

The mood fluctuates, with headlines sometimes sparking hope and others sparking disbelief. A quick resolution to the Middle East crisis, however, seems unlikely as United States (US) President Donald Trump reiterated that the Tuesday deadline is final, adding that the latest Iran proposal is not “good enough.”

The US Dollar (USD) once again took advantage of a risk-averse environment, only temporarily falling after the release of American data. According to the Institute for Supply Management (ISM), the March Services Purchasing Managers’ Index (PMI) eased to 54, following 56.1 in February and missing expectations of 55.

The report also showed that the Prices Paid Index edged higher to 70.7 from 63 in the same period, reflecting mounting inflationary pressures. Also, the Employment Index fell to 45.2 from 51.8 previously, indicating a softening labor market.

The ISM Services PMI report painted a gloomy picture for the American economy in March. Still, US indexes retain modest intraday gains, preventing panic from taking over and pushing the Greenback sharply up across the FX board.

XAU/USD short-term technical outlook

From a technical perspective, the near-term picture for XAU/USD is mildly bearish. The 4-hour chart shows that price retreats further from the recent $4,780 area and now holds below the rising 20-period Simple Moving Average (SMA) around $4,686, signaling fading upside momentum within a still-elevated range. The longer-term 100- and 200-period SMAs are also clustered above the current level near $4,673 and $4,916, respectively, and continue to slope lower, reflecting sellers' control. Finally, the Momentum indicator has slipped into negative territory, while the Relative Strength Index (RSI) has eased back toward the 50 line, together indicating that buying pressure has cooled and that sellers are attempting to gain short-term control.

In the daily chart, XAU/USD posted a lower low and a lower high, a sign of mounting selling interest. The bias is mildly bearish as price extends its pullback below the 20-day SMA near $4,755 while hovering around a rising 100- day SMA. Meanwhile, the Momentum remains well below 0 and continues to weaken, in line with bears' control, while the RSI hovers just below 45 after recovering from oversold territory, suggesting downside momentum is fading but not yet reversing decisively in favor of buyers.

Immediate resistance emerges at the near-term 20-period SMA near $4,686, with a sustained break above that level needed to reopen the path toward the recent high at $4,787. A push through $4,787 would expose the $4,820 zone next, where previous supply could reassert. On the downside, initial support aligns with the recent reaction low at $4,610, followed by $4,580 as the next bearish target if weakness extends. A decisive drop below $4,580 would strengthen the bearish tone and could invite a deeper pullback toward $4,550.

, following 56.1 in February and missing expectations of(The technical analysis of this story was written with the help of an AI tool.)

• The US Dollar Index clawed back early session losses to settle just above 100, recovering from a dip below the round number.
• Iran rejected a 45-day ceasefire proposal from regional mediators, calling it "illogical" and demanding a permanent end to the war.
• Institute for Supply Management Services data missed expectations while the Prices Paid subindex surged, reinforcing the stagflation narrative.
• A packed inflation calendar later this week features Personal Consumption Expenditures data on Thursday and Consumer Price Index on Friday.

The US Dollar Index (DXY) struggled to crimp downside momentum near the 100.00 handle on Monday after a volatile day that saw the index slide from overnight highs near 100.30 down to a session low near 99.75 before staging a late recovery. The 200-period moving average on the intraday chart capped the bounce, with price settling around 100.00. The Greenback's intraday weakness coincided with a broader risk-on tone across equities as traders initially weighed the prospect of a US-Iran ceasefire, though the optimism proved short-lived.

Iran rejection fails to lift the Dollar

A draft ceasefire proposal assembled by Egyptian, Pakistani, and Turkish mediators was rejected outright by Tehran on Monday. Iranian foreign ministry spokesperson Esmail Baghaei called the 45-day ceasefire framework "illogical," insisting Iran would only accept a permanent end to the war with guarantees against future attacks. Despite the hawkish tone from Tehran, the Dollar failed to catch a meaningful safe-haven bid. Markets appear increasingly desensitized to the diplomatic cycle, with equities closing comfortably in the green even as Oil prices remained elevated above $112 per barrel on West Texas Intermediate (WTI). President Trump's Tuesday deadline for Iran to reopen the Strait of Hormuz adds another layer of uncertainty heading into mid-week.

ISM Services flags employment weakness and price pressures

Monday's Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) came in at 54, missing the 55 consensus and down from 56.1 in February. The subcomponents were more telling for the Dollar outlook. The Employment Index collapsed to 45.2 from 51.8, its lowest since December 2023, which complicates the otherwise strong 178K Nonfarm Payrolls (NFP) print from Friday. Meanwhile, the Prices Paid Index surged to 70.7 from 63, with ISM respondents citing higher fuel costs and Iran-related supply disruptions as the dominant theme. The New Orders Index rose to 60.6 from 58.6, its best reading since February 2023. The combination of weakening employment, resilient demand, and surging input costs is a textbook stagflationary signal, one that makes the Federal Reserve's (Fed) job considerably harder and leaves rate expectations in limbo.

Inflation data to dominate the back half of the week

Wednesday's release of the Federal Open Market Committee (FOMC) Minutes from the March meeting will offer insight into how policymakers were framing the inflation-growth tradeoff before the latest surge in energy prices. Thursday brings the February Personal Consumption Expenditures Price Index (PCE), the Fed's preferred inflation measure, with Core PCE expected at 0.4% MoM and 3% YoY, alongside Q4 Gross Domestic Product (GDP) and Initial Jobless Claims. Friday is the main event. March Consumer Price Index (CPI) consensus sits at a striking 0.9% MoM, a sharp acceleration from February's 0.3%, which would push the YoY rate to 3.3% from 2.4%. Core CPI is forecast at 0.3% MoM and 2.7% YoY. The scale of the expected headline jump reflects the first full-month impact of elevated Oil prices flowing through to consumer energy costs. The University of Michigan (UoM) preliminary April consumer sentiment survey rounds out Friday's calendar, with the headline index expected to slip to 52 from 53.3, while the one-year and five-year inflation expectations readings will be closely watched for any signs that price pressures are becoming entrenched in household expectations. A hot CPI print could reinforce the case for rates staying higher for longer and provide the Dollar with a firmer bid heading into the following week.

DXY 5-minute chart

Technical Analysis

In the 5-minute chart, Dollar Index Spot trades at 100.03. The near-term bias is neutral with a slight bullish tilt as price stabilizes just above the 200-period exponential moving average near 100.00, signalling respect for medium-term intraday trend support. The Stochastic RSI has rebounded from oversold territory toward mid-range readings, indicating fading downside momentum after the earlier pullback from the 100.01–100.03 area. Holding above the moving average keeps intraday buyers engaged, but the lack of a strong momentum extension tempers directional conviction.

Immediate support emerges at 100.00, aligned with the 200-period EMA, with a break exposing the prior intraday lows near 99.96 as the next downside level. Below that, deeper support is located around 99.90, where a failure would flip the short-term picture decisively bearish. On the upside, initial resistance is set by the recent 100.03 high, with a sustained move above it opening the way toward 100.10 as the next objective. A clear consolidation above 100.03 would confirm that buyers have regained control of the 5-minute structure.

(The technical analysis of this story was written with the help of an AI tool.)

• GBP/USD rises as ceasefire speculation weighs on the US Dollar.
• Softer US services data added pressure on the Greenback.
• Traders now await US inflation, jobless claims and Fed minutes.

The British Pound (GBP) advances by over 0.40% on Monday as US President Donald Trump said the Tuesday deadline he has set for Iran to make a deal is final, while rumors of a possible de-escalation weighed on the US Dollar (USD). GBP/USD trades around the 1.3240 figure at the time of writing.

Sterling gains as ceasefire rumors lift mood, soften Greenback

Risk appetite improved on Monday after Axios reported that US and Israeli officials, along with regional mediators, are discussing a 45-day ceasefire that could be extended if needed. Investors cheered the news, as depicted by US equities posting gains of 0.15% to 0.52%.

Data from the US showed that business activity deteriorated, according to the Institute for Supply Management (ISM), as the Services PMI in March slipped from 56.1 to 54, below economists' forecasts of 55. The Prices Paid sub-component of the PMI rose to its highest level since October 2022, coming at 70.7, sparked by the rise of oil and fuel costs, commented Steve Miller, the Chair of the ISM’s Services Business Survey Committee.

Last week, strong US jobs data posted the largest job gains in 15 months and a dip in the Unemployment Rate. Nonfarm Payrolls rose by 178K in March, exceeding estimates of 60K. Meanwhile, the Unemployment Rate fell to 4.3% from 4.4% in February.

Consequently, expectations that the Federal Reserve (Fed) will cut rates are none, according to data from Prime Market Terminal, which reflects that the Fed funds rate will remain in the 3.50%-3.75% range, steady in 2026.

Fed interest rate probabilities

Traders' eyes will be on the release of US inflation figures, jobless claims, and the Federal Reserve's last meeting minutes.

GBP/USD Price Forecast: Technical Outlook

In the daily chart, GBP/USD trades at 1.3239. The near-term bias is mildly bearish as spot holds below the downward-sloping resistance trend line from 1.3869 and trades under the clustered simple moving averages near 1.3500, which now cap the upside. The persistent rejection along that descending line, combined with price pressure below the 50–100–200-day group, signals sellers retaining control, even as the longer-term rising support trend line from 1.3035 still prevents a steeper breakdown.

Initial resistance is now at 1.3320, where recent rebounds have stalled beneath the descending trend line, followed by 1.3435 and the moving-average zone around 1.35. A daily close above that 1.35 area would be needed to dilute the current bearish tone and reopen 1.3600. On the downside, immediate support is seen at 1.3187, with 1.3130 and the rising trend line from 1.3035 below; a clean break under that trend support would confirm a deeper bearish extension toward 1.3050.

(The technical analysis of this story was written with the help of an AI tool.)

• USD/CAD softens as the US Dollar weakens, allowing the Canadian Dollar to snap a two-day losing streak.
• Shifting geopolitical headlines around the US-Iran war keep sentiment fragile, limiting downside in the US Dollar.
• Focus also on upcoming US inflation data and Canada employment figures later this week.

The Canadian Dollar (CAD) gains traction against the US Dollar (USD) on Monday as traders react to evolving geopolitical developments in the US-Iran war. At the time of writing, USD/CAD is trading around 1.3921, hovering near four-month highs.

Risk appetite improved earlier in the Asian session following reports of a potential 45-day ceasefire between the US and Iran, which is weighing modestly on the Greenback. However, the US Dollar pared some of its losses as conflicting headlines kept uncertainty elevated and limited expectations of a near-term resolution.

The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading around 99.98 after rebounding from an intraday low near 99.76.

Iran has called for a permanent end to the war in response to the US proposal, according to IRNA, while also rejecting a ceasefire framework conveyed via Pakistan. Meanwhile, a US official cited by Axios said Iran submitted a 10-point response to the proposal, describing it as “maximalist” and noting that it remains unclear whether it would allow progress toward a diplomatic solution.

This suggests the conflict could escalate further, with a deal appearing unlikely ahead of the deadline set by US President Donald Trump, who has warned of potential strikes on power plants and other civilian infrastructure if the Strait of Hormuz is not reopened by Tuesday, 8:00 p.m. Eastern Time.

Beyond immediate geopolitical risks, the broader economic fallout from the war is also coming into focus. Rising Oil prices are adding to inflation pressure while raising concerns about global economic growth, a combination that is complicating the outlook for both the Federal Reserve (Fed) and the Bank of Canada (BoC).

On the data front, the ISM Services Purchasing Managers Index (PMI) for March came in at 54, down from 56.1 in February and below expectations of 55.

Looking ahead this week, market attention will turn to inflation data in the US, including the Consumer Price Index (CPI) for March and the Personal Consumption Expenditures (PCE) Price Index for February. In Canada, the March employment data will also be in focus.

(This story was corrected on April 6 at 17:15 GMT to say USD/CAD was trading around 1.3921, not 1.1315.)