Equities Break Higher as Oil Cools and Dollar Softens on Diplomatic Hopes – Comments from Century Financial

Technically, the S&P 500 index is trading at $6,900 and has decisively broken above the $6,800 resistance level. The index has shown strong momentum since yesterday. The 1-hour charts show the formation of a bull flag. The pole extends from $6765 to $6890. Price acceptance is observed at the current levels. A decisive break and close above $6,900 would suggest further bullish momentum for the index and it can test the highs of $7,000. Conversely, the index finds near-term support at the $6850 level, followed by the 9-day SMA at $6,732.

U.S. Dollar Index

The dollar slipped 0.33% yesterday and continues to edge lower, down 0.04% in early trading hours. The DXY was under pressure as geopolitical uncertainty remains the primary driver of dollar direction, with Trump signalling that a fresh round of US-Iran negotiations is set to take place this week.

On a fundamental level, the situation remains precarious. The US initiated a naval blockade of the Strait of Hormuz yesterday, which was then followed by headlines that Iran and the US would hold a fresh round of talks this week before the looming ceasefire deadline. Looking into the fine print, the naval blockade seemed aggressive in form, however, as it unfolded, investors understood that ships that passed through the strait were not blocked. Only ships bound for Iran were blocked. For investors, this looked like coercive leverage, proof that diplomacy is not off the table.

Peace talks are bearish for the dollar. The greenback’s resilience through this conflict has been partially sustained by a geopolitical risk premium. As the probability of de-escalation rises, the premium unwinds.

On a technical level, the DXY is trading below its 9, 21, 50, 100, and 200-day SMAs. The first support lies at $97.886, followed by the more critical $97.772 floor. The dollar had been consolidating within the $97.77 to $100.56 range since September 2025 before breaking down in January, and has since returned to trade within that same band following the onset of the conflict. The daily RSI is trading downwards at 36, indicating underlying bearish sentiment in the dollar as peace talks progress.

Crude Oil

WTI retreated 2.3% and Brent retreated 3.5% on Monday as Trump said that Iran had reached out seeking a deal, even as the US began enforcing a naval blockade in the Strait of Hormuz. Further, futures markets, which are more subject to volatile swings, also settled near lows as markets adopt a wait and watch approach. Today, WTI is down 1.5% and Brent is up 0.3%.

According to the head of the IEA however, current prices don’t reflect the severity of the supply crisis situation yet but they will soon begin to. He also stated that more than 80 facilities have been damaged in the region and a recovery could take around 2 years.

The current sell of that is seen in the markets assumes that the conflict will end soon and barrels will come back to the market really quickly. However, the reality of the situation is far from true as the timeline is much longer even if the barrels start moving tomorrow.

Oil futures are trading near $100 a barrel in London, which marks a rally of roughly 64% since the start of the year but is still considerably below the levels reached after Russia’s 2022 invasion of Ukraine, or the records set in 2008.

The US-Iran talks are taking a toll on risk sentiment and keeping volatility high. Even though the situation seems contained for now, a chance of prolonged conflict is still on the table.

WTI is trading in an upward channel on the 4-hour chart. On the 1-hour chart, immediate resistance is at the 100 SMA level of $99, followed by 200 SMA level of 103. Support is seen at 8th April low of 91, followed by the key level of 87. A break below $84 can make oil technically bearish.

For Brent, prices have taken support on the upward trendline joining 8th April, 11th April and 14th April lows on the 4-hour chart. On the 1-hour chart, immediate resistance is at $103 which coincides with the 50% fib level followed by the $106 level which coincides with the 61.8 fib level. Support is at $96, followed by the 8th April low of $92.

Gold & Silver

Gold is currently trading at $4,765, up 0.43%, after a two day decline, as improving sentiment around a potential diplomatic resolution to the ongoing US–Iran conflict has helped ease immediate inflation concerns. Meanwhile, Gold backed ETFs saw inflows of 146,437 troy ounces in the last session, equivalent to roughly $695.5 million, highlighting continued institutional interest despite recent price consolidation.

Market optimism picked up after Donald Trump indicated that Iranian officials have approached the US administration to work on a deal, while Iranian President Masoud Pezeshkian also signalled Tehran’s willingness to continue peace talks within the framework of international law. This dual signalling has supported broader risk sentiment and allowed gold to recover alongside equities.

However, price action suggests that gold is currently being driven more by interest rate expectations than by its traditional role as a geopolitical hedge. With US money markets pricing in less than a 20% probability of a rate cut by the Federal Reserve by December, the higher for longer rate narrative continues to influence the metal’s trajectory. At the same time, underlying geopolitical risks have not fully dissipated. The US naval blockade of the Strait of Hormuz continues to elevate concerns around potential energy supply disruptions and broader economic stress. While near term inflation fears have moderated slightly, any sustained rise in oil prices could eventually slow global growth, a backdrop that has historically been supportive for gold.

Technically, for intraday traders, as long as the gold price is above its 100-day SMA, which also falls near the previous session’s close, the near-term price action remains bullish for trading. The 100 Day SMA support falls at $4,676. The next support level is at $4,599. The immediate resistance is at $4,813, which lies on the ascending trendline, followed by the next resistance at $4,895, which falls at the 50 Day SMA.

Silver is trading higher by 1.85% at $76.98, with price action continuing to respect a well-defined ascending channel that has been in place since March 24. The metal has consistently taken support along its ascending trendline reinforcing the strength of the ongoing uptrend. Immediate support is seen near $73, which aligns closely with the lower boundary of the channel and remains a key level to watch for maintaining bullish momentum. On the upside, resistance is positioned at $79, where the upper boundary of the channel converges with the 50-day SMA.