I wrote on the 22^nd February that the best trades for the week would be:

1. Long of the S&P 500 Index following a daily (New York) close above 7,025. This did not set up.
2. Long of Gold following a daily (New York) close above $5,418.55. This did not set up.
3. Long with a small position in WTI Crude Oil on short-term bullish price action while New York is open but be quick to take profits once war breaks out or if an agreement is reached. This would have you already in a long trade, possibly taken intraday Friday near the 7-month high price.

A summary of last week’s most important data in the market:

1. US PPI – this is seen as an indicator for inflation, and this data released on Friday came in much hotter than expected, showing a month-on-month increase of 0.5% while an increase of only 0.3% was expected. This sent US stock markets lower and was a minor hawkish tilt for expectations of the path of rate cuts, but it had little effect on the US Dollar.
2. US President Trump State of the Union speech – this had little to no effect on the markets.
3. Australian CPI (inflation) – this also came in a bit hotter than expected, with a month-on-month increase of 0.4% when only 0.2% was expected, which prevented the annualized rate from falling from 3.8%. This helped keep the Aussie a little bit stronger than it would otherwise have been.
4. Canadian GDP – this was slightly higher than expected, showing a monthly increase of 0.2% while an increase of only 0.1% was expected, although this had no real effect on the market.
5. US Unemployment Claims – almost exactly as expected.

The only significant effects last week’s economic data had was minor dovish tilt on expected rate cuts by the Fed, and the stronger AUD after the higher inflation data.

The week brought little clarity on tariffs. In any case, markets seem to have calmed down a lot about that issue.

The week was really dominated by speculation over the possibility of an American attack on Iran, with the prediction market Polymarket seeing odds narrowing Friday as the US Ambassador told Americans to leave Israel “today” if they wanted too but still showing only an approximate 30% chance of an attack over the weekend.

Ambassador Huckabee’s warning was worth paying attention to, as a few hours after dawn on Saturday morning saw a joint Israeli / US strike, generating an element of surprise as the opening salvo was expected to be made during hours of darkness.

Ayatollah Khamenei has been the Supreme Leader of Iran since 1989 and has been arguably the leading global figurehead of hostility towards the USA and Israel.

It seems clear that this war is going to last for a few days at least, maybe even for a few weeks, and that a surrender by the regime remains unlikely, at least for time being.

Interestingly, there has been no military response yet from any of Iran’s proxies, notably Hezbollah which is positioned on Israel’s northern border and could still add to Israeli damage and logistical issues. It is telling that despite the confirmed death of the Ayatollah, the proxies have still not joined battle, that is a very bullish sign for the USA and Israel.

Yesterday the Iranian navy warned ships not to enter the Gulf of Hormuz, and traffic remains down by about 70%. More than 10% of the world’s Crude Oil passes through this narrow waterway, so if the US does not manage to undo this semi-blockade, Crude Oil markets will likely be under supply pressure unless OPEC agrees to increase production. There are signs OPEC already agreed this with President Trump. The price of WTI Crude Oil rose strongly on Friday and broke the 6-month high price, so many trend traders will already be long here. The price of Gasoline has also risen.

The coming week’s most important data points, in order of likely importance, are:

1. US Average Hourly Earnings
2. US Non-Farm Employment Change
3. US Retail Sales
4. US ISM Services PMI
5. US ISM Manufacturing PMI
6. Australian GDP
7. UK Annual Budget
8. US Unemployment Rate
9. US Unemployment Claims

Currency Price Changes and Interest Rates

For the month of February, I forecasted that the EUR/USD currency pair would rise in value.

February 2026 Monthly Forecast Final Performance

Last week saw no currency crosses with excessive volatility, so I am making no forecast for the coming week.

The Swiss Franc was the strongest major currency last week, while the Japanese Yen was the weakest. Directional volatility decreased last week, with only 11% of all major pairs and crosses changing in value by more than 1%.

Next week’s volatility is likely to be higher due to the outbreak of war in the Middle East, which might generate volatility in the US Dollar, the Japanese Yen, and the Canadian Dollar. There could also be unforeseen side effects which might affect other currencies.

You can trade these forecasts in a real or demo Forex brokerage account.

Key Support and Resistance Levels

Last week, the US Dollar printed a small doji candlestick, which is typically seen as indecision. I see it more as a consolidation as the area of the candlestick is located where the price has been comfortable in recent weeks.

Zooming out, we can see that although the price action of recent months suggests a bearish consolidation pattern, the most recent price action has been bullish over recent weeks. The long-term trend is mixed, with the price below its level of 3 months ago but just above its level of 6 months ago.

We saw the interest rate outlook remain more bullish last week on the greenback, with markets now pricing in only two rate cuts of 0.25% over the course of 2026 instead of the three that were expected in the previous week. This was reinforced by hot PPI data.

I take no bias here on the US Dollar, which is not of much concern to the market. I think it will be better to watch other assets on their own merits this week.

US Dollar Index Weekly Price Chart

WTI Crude Oil rose last week, especially on Friday when the odds of an American attack on Iran seemed to narrow, sending the price higher to make a new 6-month high and close at what was nearly a 7-month high.

The rumour of war was correct, and it appears both sides are playing for as high stakes as could be, with the USA and Israel openly calling for regime change after killing Ayatollah Khameini and many other very senior figures in the opening strike Saturday morning.

Although it seems that neither side is targeting crude oil facilities, yesterday Iran announced a blockade of the Straits of Hormuz, and it seems 70% of oil tankers are still afraid to pass through. Iran attacked one oil tanker Sunday in the Strait. If this situation persists, it will reduce the supply of crude oil to the market as over 10% of global crude oil passes through the Strait. Still, OPEC looks poised to increase production, which may save the Americans from having to reopen the Strait to get the prices of Crude Oil and Gasoline down.

No matter what damage control happens now, I think it is likely that we will see a higher open for WTI Crude Oil on Monday. I am already long of it as a trend trader, but I will be exiting my long position quickly, by close on Monday or Tuesday, as I expect that OPEC will oblige and open the crude oil tap.

I could be wrong and just the sentiment could see the price move higher for several days if the war continues. It does seem likely that the war will go on for several days or weeks.

WTI Crude Oil Daily Price Chart

The AUD/USD currency pair is very interesting right now, as the Australian Dollar is even stronger than the US Dollar, being one of the few currencies that has outpaced it over recent weeks, trading at long-term high prices two weeks ago.

The Australian Dollar is one of three major currencies whose central banks are on a path of rate hikes rather than cuts, and its path is the strongest and most convincing.

I think the Australian Dollar is an excellent long prospect.

Technically, last week’s candlestick looks bullish as a breakout from the previous week’s inside candlestick, so if the price can get established later above $0.7134, it will be trading in bullish blue sky and could easily go on to make further gains.

AUD/USD Weekly Price Chart

BTC/USD is starting to show a very textbook range consolidation between $61,229 and $71,762. This is an extension downwards of the lower border of the range, which is a bearish sign. The daily price chart below shows that a break of this range could be very significant technically. Although there has been lots of bearish pressure on Bitcoin, it may be that long-term investors see it as cheap in this range and are buying it. A convincing bullish breakout above $71,762 could trigger a fast rise to $81,203. This feels the less likely scenario.

A bearish breakdown below the very pivotal long-term low at $61,229 will be a dramatic even and likely trigger a further rapid fall in the price of Bitcoin.

Bitcoin Daily Price Chart

Gold has started to rise convincingly again, although it is still a meaningful way off its record high which it made a few weeks ago. The daily chart below shows that Friday’s rise was especially impressive, with the price closing right on the high of the day and the week.

It looks as if Gold will continue to go higher, and the rise seems to be changing from a grind higher into a firmer upwards move.

The price remains well above the 50% Fib retracement level of the recent sharp crash in value, which is another bullish sign.

Trend and momentum traders who do not want to wait for long-term breakouts will probably want to be long here already. I prefer to wait for long-term new high prices, so I will wait for a daily close above $5,418.55 before I enter a long trade.

Another bullish factor is the strong rise in Silver we saw last week, with the price closing above $93 per ounce. Both precious metals are at their highest prices since the huge crash one month ago.

Gold Daily Price Chart

I see the best trades this week as:

1. Long of Gold following a daily (New York) close above $5,418.55.
2. Short of Bitcoin following a daily (New York) close below $61,000 targeting $50,000.

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