The War-Petrodollar Trade Extends – Oil Jumps, Dollar to 2026 Highs

Author: Elior Manier

Date: March 3, 2026

Overview

The article discusses the current state of the US Dollar and oil prices amidst escalating conflicts in the Middle East. As tensions rise, the US Dollar is regaining its status as a safe-haven currency, while oil prices are surging due to fears of prolonged military interventions.

Market Reactions

Despite a smooth market opening, the article warns of significant volatility ahead. The potential for a longer conflict is increasing as Iranian forces shift their focus from military bases to civilian infrastructure, leading to ongoing strikes and retaliations. This has resulted in a broad risk aversion in global markets, with stock indices dropping between 2% and 7%.

Oil Prices

Brent crude oil has risen above $83, while WTI is nearing its June peak of $78.43. The article emphasizes that oil prices are a key indicator of market sentiment, with a potential spike to $100 a barrel if the conflict escalates further. A sustained high oil price could lead to increased demand for dollars, impacting global economies and inflation rates.

Dollar Index Analysis

The Dollar Index (DXY) has seen a significant increase, breaking out of a consolidation phase around 98.00 and reaching 2026 highs. The article provides a technical analysis of the DXY, highlighting key resistance and support levels. The current resistance zone is between 99.40 and 99.50, with a psychological support level at 99.00.

Technical Levels

Key levels to watch for the DXY include:

• Resistance Levels: 99.40-99.50, 99.68, 100.00-100.50, 100.376, 101.00
• Support Levels: 99.00, 98.00, 96.50-97.00, below 96.00

Conclusion

The article concludes that the ongoing geopolitical tensions are likely to keep oil prices elevated and the dollar in demand. Traders are advised to monitor key technical levels for potential trading opportunities as the situation develops.

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