In This Issue 

• Iran — talks break down, back to baseline

• Crude — elevated, still headline-driven

• BTC at critical level (74,500 38.2% Fibonacci)

• EUR/USD - 61.8% Fibonacci the next key level

• USD/JPY - 160 resistance holding
  

Iran

Everything continues to trade off the failure of progress in Iran negotiations over the weekend. Talks broke down without a deal, removing the one outcome that could have eased pressure on energy markets.

The knee-jerk move was USD buying, but that faded as U.S. flows came in Monday morning. Since then, USD has come off, reflecting cleaner positioning after last week’s move.

This remains a binary setup. Any credible progress toward reopening the Strait would trigger a sharp reversal — lower crude, weaker USD, risk assets higher. Until then, the underlying regime remains intact, with markets trading the reality of ongoing tension and disruption risk.

Key Levels This Week

BTC - 74,500 — key pivot, must close above to change bias.
- 57,797 — 61.8% Fib (Nov 2022 low → ATH)
- 48,698 — 61.8% Fib of entire BTC move

EUR/USD trading at the upper Bollinger Band and closed the day over the 50 % Fibonacci at 1.1746. 1.1825 is the 61.8 % Fib and the next object if EUR continues higher.

USD/JPY 160.46 — only a close above negates bearish setup 159.47 — current price, bearish engulfing forming 157.90 — initial objective, lower Bollinger Band

Crude

Crude remains elevated, holding in the $110+ area and continuing to trade off headlines rather than structure.

The underlying dynamic hasn’t changed — price is being driven by developments around Iran, with moves quick and prone to reversal. Absent any real progress on negotiations, the bias remains higher.

BTC

Price is testing the key level at 74,500 (38.2% Fib). Last time at this level we saw a false break and a move back toward the mid-60k area. As I’ve been saying, a clean break of this pivot could easily trigger a $10k move.

If BTC reverses lower again the door stays open to 57,797 — the 61.8% Fib of the November 2022 low to the ATH. Below there, 48,698 — the 61.8% Fib of the entire BTC move. That's the larger level.

EUR/USD

Knee-jerk lower in Asia Sunday night following the failure of U.S.–Iran talks, but since then EUR has been bid, closing the NY session near its highs around 1.1765/70.

A clean break above this area would likely trigger further upside as positioning adjusts.

USD/JPY

Bearish reversal setup intact.

USDJPY had strong bearish confluence at the end of March. Bearish divergence and a reversal at the upper Bollinger Band with overbought momentum set the bias lower. A daily close above 160.46 would negate the setup.

Initial objective: 157.90 — the lower Bollinger Band.

The BOJ remains in a difficult spot. Intervening against a war-driven USD move is a different calculation than pushing back against pure speculation. But 160 is not a level they can ignore indefinitely.

EUR/GBP

The bearish daily reversal setup from last week remains in play. Price is sitting on the 200 day moving average at .8703.

Momentum has moved out of overbought. With momentum close to neutral a break of the 200 - day might have a more muted response. A close above last week’s pivot would negate the bearish structure.

Downside follow-through on a clean break below .8703 targets the double bottom zone at 0.8605-0.8610 — the February and March lows. That's a significant support area and the bigger objective if momentum continues lower.

Week Ahead

The macro picture hasn’t changed — Iran continues to dominate everything.

The breakdown in negotiations over the weekend keeps the market focused on escalation risk, with oil remaining the primary driver.

Data remains secondary in this environment. Markets will still parse releases for any shift in rate expectations, but the impact is limited while energy and geopolitical risk remain the primary drivers.

The Strait is still the market. Everything else remains secondary until that changes.

Market Notes

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Next Tuesday: Weekly market update. — Mark

Meridian Compass is brought to you by Mark Schaefer, a portfolio manager with over 30 years experience developing and trading systematic strategies in global futures and FX at major banks and hedge funds.

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