13-03-2026

Rising Crude Oil and a Rebounding Dollar Could Decide the Market’s Next Move

Over the last few weeks, something interesting has been happening beneath the surface of the market.

At first glance, the Nifty correction may appear like just another routine pullback after a strong rally. But when we combine what the charts are signalling with the broader global macro environment, the picture becomes far more interesting — and possibly more important.

The market may be approaching a decision zone.

Not because of one single factor, but because several pieces of the puzzle are starting to align at the same time.

First, let`s look at the charts.

Over the past few months, Nifty continued to hold near its highs, but momentum indicators were quietly telling a different story. Indicators such as RSI and MACD were already showing bearish divergence, meaning that while prices attempted to stay elevated, the underlying momentum was gradually weakening.

This type of structure is something experienced traders watch very closely. Markets often show momentum fatigue before the actual price correction becomes visible.

And that correction has now started.

The recent decline appears consistent with a Wave-4 type correction within a broader bullish structure. Interestingly, the fall is now approaching a very important technical cluster near 23,000, which includes Fibonacci retracement levels as well as previous structural support.

This is not just another number on the chart. It is a zone where buyers historically tend to step in.

If this support holds, the current decline may simply turn out to be a healthy consolidation before the next leg of the uptrend.

But the charts are only one part of the story.

The macro environment is also beginning to shift.

Crude oil prices have started moving higher again. For a country like India — which imports a large portion of its energy requirements — rising oil prices tend to increase the import bill, put pressure on inflation and often weigh on the equity market sentiment.

At the same time, the US Dollar Index has rebounded sharply from around 97 to near 100.

When the dollar strengthens, global liquidity dynamics often change. Capital tends to move towards the United States, and emerging markets can temporarily face tighter liquidity conditions.

Individually, these factors may not always trigger market declines.

But historically, when crude oil and the dollar rise together, emerging markets tend to experience phases of volatility or correction.

We have seen similar setups before.

During the 2008 global crisis, crude oil surged towards $140 and the dollar strengthened as global risk aversion increased. The result was one of the sharpest corrections in Nifty’s history.

In 2018, crude oil climbed towards $80 while the dollar strengthened globally. The market did not collapse, but Nifty still went through a notable corrective phase.

Again in 2022 during the Russia–Ukraine conflict, oil crossed $120 and the dollar index surged significantly. Nifty corrected roughly 12–13% before eventually stabilizing.

This does not mean the same outcome must repeat.

Markets never repeat history exactly.

But they often rhyme.

That is why the current setup deserves attention.

The index is approaching a major support zone at the same time when macro variables are becoming less supportive.

So what could happen next?

If Nifty manages to hold above the 23,000 region, a technical rebound could emerge. Sharp declines often lead to short-covering rallies, and in that case the index could attempt a move back towards 24,500 or even 24,800.

However, such a bounce would still need confirmation before the market can confidently resume its broader uptrend.

On the other hand, if the 23,000 support breaks decisively, the correction could extend towards deeper support levels near 22,200 or even 21,500, particularly if crude oil continues rising and the dollar strengthens further.

At this stage, the market is not yet confirming either scenario.

Instead, it is simply approaching a point where the next major move will likely be decided.

For traders and investors, this is a time for observation rather than reaction.

The coming sessions may reveal whether this is merely a healthy pause in a continuing bull market, or the beginning of a broader consolidation phase.

Markets often whisper before they move loudly.

Right now, the charts and the macro environment both seem to be whispering something important.

The question is whether the market chooses to listen.

Disclaimer

The securities quoted are for illustration only and are not recommendatory.

Vikash Bagaria
SEBI Registered Research Analyst – INH300008155
BSE Enlistment No – 5426

Investments in securities markets are subject to market risks. Read all related documents carefully before investing.

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