Markets Stabilize After Sharp Rally; Oil Volatility Persists, Dollar Firms, Gold Holds Key Support

Vijay Valecha, April 11, BusinessToday.ME

Global markets witnessed a volatile but broadly constructive session as equities rebounded sharply, geopolitical tensions continued to influence commodities, and the US dollar regained footing amid shifting interest-rate expectations and safe-haven demand.

US Markets: Relief Rally Driven by Positioning, Not Conviction

US equities staged a strong rebound, with the S&P 500 rising 2.51% and the Nasdaq 100 advancing 2.8% during the session. However, gains faded partially as geopolitical uncertainty resurfaced after reports of renewed tensions between the US and Iran regarding a ceasefire agreement.

According to Vijay Valecha of Century Financial, the rally was largely technical in nature—driven by short covering and under-positioned investors rather than strong fundamental conviction. He cautioned that underlying macro risks remain elevated, including:

• Increasing debt dependency in AI-related capital expenditure

• Stress signals in private credit markets, including a negative outlook revision by Moody’s on Blue Owl’s flagship fund

• Rising bank exposure to private market intermediaries, estimated at around $348 billion

The index held above its 50-day SMA near 6,752, forming a potential bull flag on the 4-hour chart. Key levels include:

• Resistance: 6,772 → 6,806 → 6,850

• Support: 6,752 → 6,710 → 6,673 (200-day SMA)

The broader structure suggests a range-bound market between 6,670–6,850, where flows and positioning may dominate near-term direction.

The US Dollar Index (DXY) ended near the 99 level after briefly touching a one-month low near 98.52, before recovering on renewed safe-haven demand.

The dollar strengthened as geopolitical tensions resurfaced and investors reassessed expectations around US monetary policy following the latest Federal Reserve communications. The FOMC minutes reinforced a “wait-and-watch” stance, with most policymakers favoring unchanged rates.

Market pricing, reflected in the CME FedWatch Tool, showed a rebound in expectations that rates will remain unchanged through year-end.

• Immediate support: ~98.50–98.80 zone

• Key resistance: 99.16 → 99.48 (21-day EMA)

• Momentum bias: constructive if above 99.16

Oil markets experienced extreme volatility:

The WTI Crude Oil plunged over 13% intraday before rebounding sharply to settle near $97, with further gains in Asian trading pushing prices higher.

• Escalating geopolitical uncertainty between the US and Iran

• Disruptions and restrictions in shipping through the Strait of Hormuz

• Reports of reduced vessel movement and congestion involving hundreds of tankers

Iran’s reported restrictions on vessel movement and disputed ceasefire conditions have intensified concerns over global supply chains.

• Key support: $91.73 (critical floor)

• Intermediate support: $93.48

• Resistance: $104 → $109.74

Bias remains bullish as long as prices stay above $91.73.

Brent crude also remains elevated, with resistance near $109.55 and support around $92.

Gold retreated from recent highs near $4,840 after failing to sustain levels above $4,800, but remains structurally supported.

The metal continues to trade within an ascending channel, with $4,700 emerging as a crucial support zone.

Valecha highlighted that macro drivers remain mixed:

• Ongoing geopolitical uncertainty, though slightly eased

• Fluctuating oil prices and a firmer US dollar as key pressure variables

• Market focus on upcoming diplomatic discussions in Islamabad involving US leadership

• Support: $4,700

• Resistance: $4,800 → $4,900+

• Trend bias: bullish while above $4,700

Silver also pulled back after a recent rally but remains constructive:

• Key support: $73

• Upside targets: $77.5 → $80

• Breakdown risk: below $73 may trigger range-bound movement ($73–$69)

Markets are currently being shaped less by macro conviction and more by positioning shifts, geopolitical developments, and technical levels.

While equities are stabilizing after a strong rebound, oil remains highly sensitive to supply disruptions, the dollar is regaining strength on safe-haven flows, and precious metals continue to hold key structural supports despite volatility.

The near-term outlook across asset classes remains range-bound but event-driven, with geopolitical headlines likely to dominate price action.

BusinessToday.ME