Market Outlook #78 - No More TACOs

This blog references an opinion and is for entertainment and informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

In this special 'No More TACOs' edition of the 78th Market Outlook here at Ostium Insights, we'll be taking a look at the week ahead in markets, looking at price-action, positioning and event risk for US Crude Oil, Gold, EUR/USD, Bitcoin and USD/JPY.

Following on from last week's incredibly stacked macro calendar, we do have a much lighter week ahead on the data front, but no doubt the bulk of the headline risk remains with geopolitics:

TUESDAY: US S&P GLOBAL MANUFACTURING PMI (MAR): (CONSENSUS N/A VS PREVIOUS 51.6)

TUESDAY: US S&P GLOBAL SERVICES PMI (MAR): (CONSENSUS N/A VS PREVIOUS 51.7)

TUESDAY: VARIOUS ECB AND FED SPEECHES

WEDNESDAY: ECB PRESIDENT LAGARDE SPEECH

WEDNESDAY: FED'S MIRAN SPEECH

THURSDAY: US INITIAL JOBLESS CLAIMS: (CONSENSUS 210K VS PREVIOUS 205K)

THURSDAY: VARIOUS FED SPEECHES

FRIDAY: US MICHIGAN CONSUMER SENTIMENT INDEX (MAR): (CONSENSUS 55.5 VS PREVIOUS 55.5)

FRIDAY: VARIOUS FED SPEECHES

Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Crude Oil:

US Oil:

Price: $100.31

Weekly:

If we begin by looking at the weekly for WTI Crude, we can see that price rejected $103 last week but managed to hold above $95 as prior resistance turned support. We closed with an inside week, as was inevitable given the range of the prior week, but we do now have a decent setup for taking either side of the trade: if we take out $103 early this week, break down and close the week below last week's low at $91.50, I think there's a very good chance the local top is in for Oil and we trade back towards that bottom quintile of the range nearer $80; conversely, if we take out last week's low early this week and then break and close back above $98, I'd be looking for longs through $103 towards the yearly highs and 2022 highs, at least into $114 to fill in much of that wick. My base case here is continuation of this ranging price-action as opposed to a breakout either side of $120 or $77 any time soon, to be honest - which itself should continue to give us lower timeframe setups to play either side.

Daily:

Turning to the daily, we can see that price is consolidating inside this $91-$101 range, with the bulk of that occurring right around $98 - the weekly open from the massive range a couple weeks prior. This, and the psychological $100 mark, is obviously pretty significant here, and as mentioned last week if we cannot break and hold below this area and flip it back into resistance, the allure of the wick fill draws into view and we want to be long through $103 towards that multi-year resistance (and then look to fade it if we see exhaustion up there). The short setup remains very straightforward: spike above $100 (now ideally taking out $103) and then get slapped down with some force through last week's low, then look to get filled on any intraday pullbacks towards $93ish and hold for $80 at least. Not much else to add here for now except that one thing to really pay attention to now is whether escalating headlines are leading to diverging price-action; whilst we do remain below that $120 high, what is quite important here is if price makes a lower-low (now ~$91.50) despite escalations, which would be suggestive of buyer exhaustion into news failure (you have a higher probability environment to fade rallies). In the same way, if we see price making higher-highs above last week's high and/or holding a higher-low above last week's low whilst headlines are supposedly de-escalating, this suggests the current lid on Oil around $100 is very unlikely to hold much longer and you wanna be a dip-buyer. Keep your eyes on both price-action and headline risk and note any major divergences this week.

Gold:

Price: $4218

‍Weekly:

Beginning with the weekly for Gold, we can see that price got obliterated last week with one of the worst weeks for Gold in many years, selling off from the open below the monthly VWAP above $5000 and losing over 10% to close the week at the lows around $4500. Early price-action this week has continued on from such weakness and price sold off from the open, tagging the 365d rolling VWAP and wicking below the anchored VWAP from the May 2025 range low, with $4100 holding firm and price bouncing off that cluster of support. I think it is unlikely we close below $4100 on the first attempt and instead expect - now that some major lows have been swept into higher timeframe demand - that buying Gold on dips is likely to be favourable into April, though I continue to expect consolidation within a broad range as opposed to continuation of the trend higher or the formation of a new trend lower. This is a good spot to expect the formation of that range low, in my view, though if we do bounce and then mark out a lower-high from which we then close below $4100, I would be looking at the anchored VWAP from the bear market bottom in 2022, now sat around $3500, as a high probability and durable low. Gun to my head, I don't think we get there and I think a lot of this next few months is spent chopping around between $4100 and $5000, with deviations either side of that broad range.

Daily:

Turning now to the daily, we can see that there is confluence here with the 200dMA for a swing-low and that daily momentum has been obliterated. If we can hold above today's low for the rest of this week, I would expect to see Gold retest the swing-low at $4640 as prior support turned resistance, above which is obviously that major resistance cluster into $5000, though I do not expect we get near that even if we mark out a low here for at least a couple of weeks. I think being short Gold again only makes sense if we see lower timeframe exhaustion into $4640 and then a breakdown, where I would then like to fade that back towards ~$4100. Below $4100, we undoubtedly take out $3880 as the Oct 2025 swing-low, with no support below that back into $3500. Regarding higher timeframe bullishness, I think you can only look towards new highs and trend continuation once we're back above $5000, flipping it into support. Otherwise, this is very much a range trader's market.

EURUSD:

Price: $1.153

Weekly:

Beginning with the weekly for EURUSD, we can see that price did catch a bid off that support last week and rallied into and marginally above the monthly VWAP, finding resistance at prior support below 1.159 and printing an inside week. I did not take any shorts above 1.157 and am not yet planning too, as I want to see how this week plays out: if we take out last week's high and then close the week back below 1.155, I would be looking for shorts towards 1.138; conversely, if we can close back above last week's high, I think this looks more like a fakeout below the prior 2026 low into a range reclaim, which has implications for dollar strength more broadly (and with DXY struggling at that all-important 101 level, it is a pivotal area for FX markets). If we do flip last week's high into support, I think the case for a retest of range resistance at 1.1844 is very strong.

Daily:

Turning now to the daily, we cab see that price is struggling at that March VWAP, as it has on every small push higher, with price rejecting below 1.159 last week and turning lower this morning. With regards to long opportunities from lower, if we continue to break down here and take out the 1.138 support into that anchored VWAP from the 2025 lows, I would be looking for momentum exhaustion into that area to play the bounce; alternatively, as mentioned above, you want longs from higher, when price accepts above the March VWAP and breaks through trendline resistance, flipping this area into support, beyond which I think we at least tag that 2026 open and anchored VWAP from the yearly high at 1.1738 but more likely than not trade through that towards range resistance at 1.1844, where the reaction will dictate whether this is then another higher timeframe lower-high from which the EUR is to cycle much, much lower. I think shorts are only favourable at present from a rejection above 1.16 and back below 1.155 into that 1.124-1.138 range - if that move comes, I don't like short EUR unless we accept below 1.1238 and DXY is comfortably above 101, in which case we have a durable trend shift that will likely take the Euro back towards 1.06 over subsequent months.

Bitcoin:

Price: $68,314

Weekly:

Beginning with the weekly for Bitcoin, we can see that it continues to show some resilience in the face of persistent headline risk. We did reject on that first attempt at the 90d rolling VWAP, as expected, and that was where I perceived the highest risk of another lower-high from which we could return to range lows at $60k, or even marginally below them. Following the rejection, we trade into $67kish and price is holding for now, but we are back below the monthly VWAP at $69.3k with bearish momentum and structure. Below, we have the anchored VWAP from the 2022 bear market bottom and the 200wMA at ~$57k-$59k, and it remains my view that if we reject here below $70k and continue to move lower that price does not accept below that $57k area and that marks out the cyclical bottom. What we need to see for upside here in the near-term, however, is the formation of another higher-low above $62.6k, which leads to acceptance above last week's high through $76.4k - this would flip the 90d rolling VWAP back into support and reclaim the April 2025 range lows, which in turn would make it much more probable we trade back towards $87k - the anchored VWAP from all-time highs.

Daily:

Turning to the daily, we can see that price has turned daily structure and momentum bullish but remains below that 90d rolling VWAP, having rejected last week below $76.4k. For now, the structure, momentum and price-action is quite resemblant of the prior range into that January high from which we got another leg lower, but unlike then price gas traded 2.5 std devs below the 365d rolling VWAP and is now marking out a higher-low (for now) above the swing-low at $65.7k that preceded the push into last week's high. If we lose that low, I think we take out $60k and buying that flush is going to be very favourable over subsequent months. If, however, this 30d rolling VWAP holds as a higher-low and price accepts back above $70k, I think we retest last week's high, where the reaction will be telling: if we can close above last week's high, flipping the 90d rolling VWAP into support, then this is very much unlike the prior range and I think the case for a cyclical low being in is very strong indeed. This does not mean immediate all-time highs, of course, but simply that above $77k I think the probabilities of $60k being offered again for buyers becomes quite low. Let's see how this next week or two into early April plays out.

USDJPY:

Price: 159.61

Weekly:

If we begin by looking at the weekly for USDJPY, we can see that price bounced off that confluence of the 2025 and 2026 open on the retracement last week and closed back above the monthly VWAP, pressing right up again multi-year resistance and failing to break down. We would want to see acceptance above 160 here, flipping that level into support, before looking for intraweek longs towards the 2024 highs into 162; conversely, wicking above last week's high and then rejecting again and closing back below the March VWAP at 158.3 = another attempt at a breakdown on the cards. Only back below 157.3 would I be looking for higher timeframe shorts, however, so the pair remains in a sort of no man's land here where you don't really want to be jumping into any positions beyond intraday, in my opinion... perhaps in a week or two the setups will be much clearer.

Daily:

Finally, dropping into the daily for the pair, we can see how choppy price has been, rejecting at the highs and then retracing the entire sell-off, much like a miniature fractal of other recent swings, but the 30d rolling VWAP held firm as support as price bounced above the 2025 open and we are now flipping prior resistance at 159 into support. A push above 160 with some bearish divergence and then a breakdown back below 159 would begin to look toppy for the pair, but if instead we just flip 160 into support I do think it's going to take out 162 and keep going, with the yen remaining weak - and in this environment perhaps also the dollar remaining broadly range-bound and other FX markets continuing to do well. This is not somewhere where I have a particularly clean read on the price-action and I would like to see that break higher and acceptance or rejection to have a bit more conviction in the yen.

I hope you've found some value in the read this week - please RT, share, engage etc. if so!

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