Ceasefire relief: Key technical levels to watch for oil, FTSE 100 and DAX 40    

Ceasefire relief: US-Iran truce triggers market rally but uncertainty remains

​A fragile ceasefire between the US and Iran has triggered a sharp relief rally across global markets, but after six weeks of conflict, the path to full recovery remains uncertain. The agreement came at the last minute, with Pakistan brokering talks just hours before President Trump's deadline expired.

Fragile truce pauses hostilities

​The US has paused its bombing campaign for two weeks, contingent on Iran reopening the Strait of Hormuz - a critical artery for roughly 20% of global oil supply. Tehran quickly signalled compliance, indicating that safe passage would resume under military coordination.

​However, this is far from a comprehensive peace deal. Iran's proposed framework - reportedly including US troop withdrawals, sanctions relief and continued control over the strait - still diverges significantly from Washington's position.

​Formal negotiations are set to begin in Islamabad, but conflicting signals on regional tensions and continued security alerts highlight how fragile the situation remains. The next two weeks will be pivotal in determining whether this truce evolves into something more durable or simply delays further escalation.

Six weeks of disruption across global markets – impact on oil price

​The conflict has left a deep imprint on financial markets since late February creating substantial volatility. Energy markets saw the most dramatic moves, with WTI crude surging nearly 70% and European gas prices rising over 60% as supply routes were disrupted. 

​Even after today’s 10%-to-15% sell-off in the price of crude oil, the oil price continues to trade at elevated levels between $90-to-$95 per barrel, around 25% higher than at the start of the war for Brent crude and 40% higher for WTI.

​The price of Brent crude oil dipped to a near one-month low, so far to $90.61 per barrel, leaving a huge gap with Tuesday's $101.93 low, part of which may be closed in the coming days. 

​Brent crude daily candlestick chart

​Resistance above the 25 March low at $93.57 may be found around the 1 April $97.08 low.

​A fall through Wednesday's $90.61 low may lead to the $85-to-$84 region being revisited.

​The short-term outlook is now bearish while Brent crude trades below the 16 March $103.14 high and medium-term toppish while remaining below the 31 March $108.88 high.

​The technical picture is similar for West Texan Intermediate (WTI) which slipped through its February-to-April uptrend line at $97.62 per barrel and is expected to close below it on Wednesday. If so, the odds would favour a decline towards the 23 March low at $84.37 taking place over the coming weeks.

​WTI daily candlestick chart

​Resistance above the 1 April low at $96.50 sits between the mid-March highs at $100.48-to-$102.44 and at the late March $106.86 peak. While remaining below this level on a daily chart closing basis, the short- and medium-term outlook for WTI will be toppish.

​A fall through and daily chart close below the 23 March low at $84.37 trough would confirm a top with the 10 March low at $76.73 then being in sight.

US/Iran war impact on stock markets, currencies, yields and commodities

​Equity markets declined broadly, particularly in Asia where economies are heavily dependent on imported energy. South Korea's KOSPI suffered a near-20% drawdown at its worst point, while US markets proved relatively more resilient.

​Currency and bond markets also reflected the shift in risk sentiment. The US dollar and Swiss franc strengthened on safe-haven demand, while several Asian currencies hit record lows.

​At the same time, government bond yields climbed as investors priced in sustained inflation from higher energy costs. This rise in real yields contributed to a notable decline in precious metals, with gold and silver falling sharply despite the geopolitical backdrop.

Relief rally underway but only partially

​Markets reacted quickly to the ceasefire announcement demonstrating pent-up demand. Asian equities led gains, with Japan's Nikkei rebounding around 5%, while US futures and European markets also moved significantly higher.

​Oil prices dropped sharply as the immediate supply shock premium eased, and broader risk appetite improved. Despite this, the recovery remains incomplete, with many markets only regaining about half of their losses since the conflict began.

​Not all assets have bounced equally. Silver, for example, has lagged the broader recovery due to the unwinding of leveraged positions built during its earlier rally. 

​The FTSE 100 participated in relief rally and rose by over 3%, though gains remained measured when compared to some of its European peers such as the DAX 40 with its over 5% rally.

​FTSE 100 daily candlestick chart

​The FTSE 100 is up over 7% year-to-date, though, and trades less than 2.5% from it late February 10,936 record high which is now expected to be overcome in the weeks and months to come, provided that no negative reversal takes the index to below its 9 March low at 10,079.

​Whereas the UK blue chip index rallied from its 200-day simple moving average (SMA) at 9,712, the German DAX 40 index only just reached its 200-day SMA at 24,101, despite its sharp rally.

​DAX 40 daily candlestick chart

​For it to reach a new record high, it would need to rise by an additional 5% from current levels around 24,144. Having said that, while the index remains above its November-to-early March lows at 22,943-to-22,928, it will be deemed to have turned a corner and be seen as medium-term bullish.

​A rise above the July-to-October 2025 peaks at 24,639-to-24,771 would probably lead to a new record high being made as well.

What comes next for markets

​In the near term, the strongest rebounds are likely to come from assets that suffered the most during the sell-off. 

​Sectors such as technology and materials - both highly sensitive to growth expectations and interest rates - may outperform as risk appetite returns.

​Conversely, energy markets could give back some gains as the immediate geopolitical premium fades, although prices are likely to remain elevated.

​That said, several constraints will limit how far the recovery can extend. The ceasefire is temporary, negotiations remain uncertain, and physical supply disruptions will take time to unwind.

​Even if the Strait of Hormuz fully reopens, shipping backlogs and logistical bottlenecks mean normalisation could take weeks or months. In addition, damage to key infrastructure - such as LNG export capacity - will weigh on supply for years, keeping a floor under energy prices.

​Central banks face continued challenges

​For central banks, the ceasefire offers some short-term relief but does not resolve the underlying tension between inflation and growth. 

​Elevated energy prices continue to pose upside risks to inflation, while the economic impact of the conflict - particularly in energy-importing regions - could weigh on growth.

​Expectations for aggressive rate hikes may ease slightly, but policymakers are likely to remain cautious with the US Federal Reserve (Fed) not expected to cut rates until 2027. The Bank of England and other central banks must balance multiple considerations as oil-driven inflation complicates monetary policy even with a ceasefire since energy costs have already fed into broader prices and affect growth trajectories with lost output and disrupted trade creating headwinds.

​Market outlook remains cautious

​Ultimately, markets are entering a phase of tentative recovery rather than a full reset – for now at least. The next fourteen days will be critical: if negotiations progress, the relief rally could extend further; if tensions re-escalate, recent gains may quickly reverse.

​For now, investors are likely to remain cautious, treating the current rebound as a reprieve rather than a resolution. 

​How to navigate market recovery

​Investors and traders managing positions during tentative recovery have several options. Here's how to approach current environment:

​Research ceasefire terms, negotiation prospects and market dynamics thoroughly. Understanding geopolitical situation helps inform decisions. Trading for beginners provides background.

​Choose whether you want to trade recovery or maintain cautious positioning. Spread betting and CFD trading allow flexibility.

​Open an account with broker offering diverse instruments across asset classes.

​Review positions on your chosen trading platform. Consider whether to add exposure or maintain protection.

​Implement strategy based on analysis and risk tolerance. Maintain stop-loss discipline given fragile ceasefire.

​Remember ceasefires can collapse rapidly. Only increase positions sized appropriately for potential reversals, maintaining diversification and risk management given substantial remaining uncertainty during fragile peace negotiations.​​