Bearish Pressure Could Resume if Gold Fails to Break 3400

Manuel

Commodity

Economic

Summary:

The inability to form a new local high signals a possible loss of bullish momentum in the short term.

SELL XAUUSD

Close Time

CLOSED

3389.23

Entry Price

3345.00

3415.00

5099.90 -276.41 -5.14%

257.7

Pips

Loss

3345.00

3415.09

Exit Price

3389.23

Entry Price

3415.00

Thursday’s release of the U.S. Producer Price Index (PPI) added to mounting evidence that inflationary pressures may be easing at the wholesale level. Headline PPI rose by 2.6% year-over-year in May, in line with analysts’ forecasts and slightly above the 2.5% recorded in April. Meanwhile, the core PPI—which excludes food and energy—declined to 3.0% from April’s 3.2%, suggesting that underlying pricing pressures are gradually moderating.

Following Wednesday’s downside surprise in the Consumer Price Index (CPI), this additional confirmation of a cooling inflation trend has bolstered market speculation that the Federal Reserve may be on track to deliver a rate cut as early as September. The softer inflation backdrop is generally seen as supportive for gold, which tends to benefit from lower interest rate expectations due to its non-yielding nature.

Adding to gold’s bullish fundamentals are growing geopolitical risks. Reports suggesting that Israel may be weighing a potential military strike against Iran have stirred fears of an escalating conflict in the Middle East. At the same time, renewed tariff threats from former U.S. President Donald Trump are feeding safe-haven demand, further underpinning the precious metal’s appeal in uncertain times.

On the macroeconomic front, U.S. Non-Farm Payrolls (NFP) data for May showed a stronger-than-expected gain of 139,000 jobs, exceeding market consensus of 130,000. The unemployment rate held steady at 4.2%, while average hourly earnings remained at a firm 3.9% year-over-year—both figures reinforcing the view that the labor market, though cooling, continues to show underlying strength.

In addition, the NFIB Small Business Optimism Index surprised to the upside, posting its first monthly increase since December. The improvement hints at a potential shift in business sentiment after months of weakness and could signal a budding sense of economic stability among smaller enterprises.

Elsewhere, the New York Fed’s Survey of Consumer Expectations (SCE) indicated a broad decline in inflation expectations across one-, three-, and five-year horizons. While this decline is generally encouraging from a monetary policy perspective, it was accompanied by a noticeable deterioration in household sentiment. Respondents expressed weaker views of their present and future financial situations, highlighting the fragile nature of consumer confidence amid conflicting economic signals. Bearish Pressure Could Resume if Gold Fails to Break 3400_1

Bearish Pressure Could Resume if Gold Fails to Break 3400_1

Technical Analysis

Gold (XAU/USD) has once again encountered strong resistance near the 3400 level, marking the third time price has failed to break higher at this zone. This repeated rejection could trigger a wave of profit-taking among bullish traders, increasing the likelihood of a corrective move lower. The inability to form a new local high signals a possible loss of bullish momentum in the short term.

However, it’s worth noting that the broader trend remains upward, and gold continues to respect a rising trendline. So far, price action has not breached this structure with a lower low, suggesting the area around the trendline may serve as a key support level.

The 100- and 200-period moving averages, currently located at 3336 and 3348 respectively, converge near a previously tested support zone. This region could act as a gravitational pull for price, given its history as a pivot point for both rebounds and rejections. If bearish pressure intensifies, this area could become a primary target for sellers.

Meanwhile, the Relative Strength Index (RSI) currently sits at 61, indicating that there is still room before entering overbought territory. However, a developing bearish divergence on the RSI may hint at weakening momentum and open the door for a downside retracement.

Should gold manage to break decisively above the 3400 level with strong volume, the bullish trend could continue toward new highs. On the other hand, if resistance holds and selling pressure increases, a pullback toward 3345 becomes increasingly likely in the near term.

Trading Recommendations

Trading direction: Sell

Entry price: 3386

Target price: 3345

Stop loss: 3415

Validity: Jun 20, 2025 15:00:00

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The US Dollar plunges amid risk-off sentiment, disappointing US inflation data, and renewed skepticism over Trump’s trade agenda, pushing USD/CHF toward multi-year lows.

SELL USDCHF

Close Time

CLOSED

0.81400

Entry Price

0.80000

0.82500

0.76876 +0.00461 +0.60%

41.1

Pips

Profit

0.80000

0.80989

Exit Price

0.81400

Entry Price

0.82500

The US Dollar is under intense pressure across the board, as a combination of lackluster US economic data and growing disillusionment with President Donald Trump’s trade policy stokes risk aversion, prompting investors to seek refuge in safer assets like the Swiss Franc.

As of Thursday’s European trading session, the greenback has taken a heavy beating against most major currencies, with USD/CHF down sharply by 0.8%, dropping from Tuesday’s high near 0.8250 to intraday lows around 0.8120 — just a stone’s throw from multi-year support at 0.8040. The renewed selloff underscores deepening market doubts over the sustainability of the so-called "America First" economic narrative, especially as trade risks begin to collide with a weakening macroeconomic backdrop.

A shaky truce in the US-China trade war, which was supposed to lend stability, has instead done little to calm investor nerves. The agreement — which still awaits official ratification by China’s President Xi Jinping — mostly reiterates prior commitments reached in Geneva last month. Tariffs remain in place at punitive levels, and no concrete roadmap has been laid out to ease broader trade restrictions.

Markets were hoping for a breakthrough, something substantial enough to spur confidence. Instead, what they got was a recycled version of the previous deal, further diluted by uncertainty. In a move that only added fuel to the fire, President Trump announced he would be issuing formal letters to all major trading partners, outlining stricter tariff demands that could take effect as early as June 9. This aggressive posture has reignited fears of a renewed trade war escalation, sending a chill through global equity markets and strengthening the bid for traditional safe havens.

Compounding the pressure on the greenback are signs of faltering domestic inflation. Wednesday’s release of softer-than-expected consumer price index (CPI) data suggested that pricing pressures remain subdued, leading many investors to believe that the Federal Reserve may need to resume its rate-cutting cycle sooner rather than later.

The data have increased expectations of a rate cut as early as September, and traders are now eyeing Thursday’s US Producer Price Index (PPI) for further confirmation. If producer prices also show weakness, the narrative for additional monetary policy easing from the Fed will likely gain even more traction, accelerating the dollar’s slide.

In contrast to the embattled dollar, the Swiss Franc has been one of the primary beneficiaries of this renewed wave of global uncertainty. Traditionally considered a safe haven, the CHF tends to outperform in times of market stress, and current conditions have provided the perfect setup for such a move. With investor sentiment rapidly deteriorating, capital has rotated out of risk-sensitive assets and into currencies like the CHF and JPY, pushing USD/CHF toward its lowest levels since the early 2020s.

Technical Analysis

From a technical perspective, USD/CHF remains under considerable bearish pressure. The pair broke decisively below the 0.8185 support level, opening the path toward the next significant floor near the 0.8000 area — a level not seen in several years. The sustained move below the 50-period exponential moving average (EMA50) adds to the negative bias, with the moving average acting as a dynamic resistance barrier.

Moreover, the Relative Strength Index (RSI) shows persistent bearish momentum, even though it is now hovering in oversold territory. The fact that the RSI has not triggered any bullish divergence suggests that the downside still has room to extend, particularly if upcoming data and trade headlines continue to favor a risk-off posture.

The short-term trend is clearly tilted to the downside, and unless a significant shift in macro sentiment or monetary policy expectations occurs, the pair could continue to trend lower in the sessions ahead.

TRADE RECOMMENDATION

SELL USDCHF

ENTRY PRICE: 0.8140

STOP LOSS: 0.8250

TAKE PROFIT: 0.8000

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The euro climbs beyond 1.1600 against the dollar for the first time since November 2021, buoyed by dovish Fed expectations, hawkish ECB rhetoric, and rising trade war fears.

BUY EURUSD

Close Time

CLOSED

1.15693

Entry Price

1.19500

1.14000

1.19199 -0.00503 -0.42%

23.3

Pips

Profit

1.14000

1.15926

Exit Price

1.15693

Entry Price

1.19500

The euro extended its bullish streak on Thursday, breaking above the 1.1600 handle against the U.S. dollar for the first time in nearly three and a half years. This sharp move higher in EUR/USD comes on the heels of mounting market expectations for Federal Reserve rate cuts and a fresh flare-up in global trade tensions ignited by U.S. President Donald Trump.

By midday in Europe, the common currency was trading around 1.1615, its highest level since November 2021, marking a critical technical and psychological milestone for euro bulls. This rally is being driven by a confluence of bearish forces weighing heavily on the greenback, while the euro benefits from renewed monetary policy divergence and investor confidence in the European Central Bank’s (ECB) relatively hawkish tone.

The latest leg lower for the U.S. dollar followed Wednesday’s release of the U.S. Consumer Price Index (CPI), which showed headline inflation rising at a slower-than-expected pace in May. The softer data—particularly in core components—has rekindled bets that the Federal Reserve could pivot to easing as soon as September.

According to CME Group’s FedWatch Tool, futures traders are now pricing in a nearly 60% probability of a 25-basis-point rate cut at the Fed’s September meeting, up from around 50% just a week ago. The shift reflects a broader market reassessment of U.S. monetary policy amid signs that disinflation is gaining traction.

Adding fuel to the dollar’s decline was a fresh wave of trade-related uncertainty. Bloomberg reported that former President Donald Trump, who is running for re-election, has vowed to reintroduce broad tariffs on U.S. trading partners unless new deals are signed by a self-imposed deadline of July 9. His comments have reignited fears of a repeat of the 2018–2019 trade war era, when global growth slowed under the weight of retaliatory tariffs and supply chain disruptions.

Although recent talks between the U.S. and China produced a temporary truce, markets appear skeptical that any lasting resolution is in sight. Instead, traders are increasingly bracing for a return to protectionist policies that could complicate the Fed’s outlook and further weaken the dollar.

While the dollar struggles, the euro is finding solid support from a more assertive stance by ECB policymakers. President Christine Lagarde last week signaled that while a rate cut was delivered in June, the central bank remains data-dependent and will proceed with caution. Since then, several ECB officials have echoed a similar message, warning that inflation risks remain tilted to the upside and further easing should not be assumed.

This contrasts sharply with the dovish shift unfolding in U.S. rate markets. The policy divergence has re-opened yield differentials that favor the euro, particularly against the backdrop of a fragile U.S. macro environment.

“The ECB’s cautious tone and the market’s aggressive pricing of Fed cuts have created the perfect storm for EUR/USD to break out,” said Clara Becker, a senior FX strategist at Saxo Bank. “Unless we see a sharp reversal in U.S. data or a coordinated effort to stabilize trade relations, the path of least resistance remains higher.”

Technical Analysis

From a technical perspective, EUR/USD remains firmly in bullish territory. Thursday’s breakout above the 1.1550 resistance zone reinforces the prevailing uptrend, with momentum indicators such as the Relative Strength Index (RSI) suggesting continued buying interest despite creeping into overbought territory.

The pair is also trading comfortably above the 50-period Exponential Moving Average (EMA50), while maintaining alignment with an ascending support trendline. The bullish bias remains intact as long as prices stay above the former resistance zone at 1.1550, which now acts as support.

A sustained move above 1.1600 could pave the way toward the next key resistance at 1.1650—levels last tested during the pre-2022 tightening cycle. However, traders should be alert to the risk of short-term pullbacks, particularly if the pair struggles to consolidate above the breakout level.

TRADE RECOMMENDATION

BUY EURUSD

ENTRY PRICE: 1.1570

STOP LOSS: 1.1400

TAKE PROFIT: 1.1950

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

EUR/JPY surged near 166.60 on Thursday, reclaiming early-session losses as the Euro gained broad strength.

BUY EURJPY

Close Time

CLOSED

166.297

Entry Price

168.500

164.000

183.738 +0.464 +0.25%

51.0

Pips

Profit

164.000

166.807

Exit Price

166.297

Entry Price

168.500

The Euro staged a decisive comeback against the Japanese Yen during European trading hours on Thursday, pushing the EUR/JPY pair to its highest level since November 2023. After dipping earlier in the session, the pair reversed course and advanced toward 166.60, fueled by both supportive central bank commentary and growing risk aversion in global markets.

At the heart of the Euro’s rally was a clear message from European Central Bank officials: the prolonged cycle of monetary easing appears to be drawing to a close. Isabel Schnabel, a prominent ECB board member, signaled that the current policy path is reaching its endpoint, citing evidence that eurozone inflation is stabilizing near the central bank’s target. Speaking in Brussels, Schnabel noted, “This monetary-policy cycle is coming to an end as medium-term inflation is stabilizing around target,” as reported by Bloomberg. She projected inflation to hover around 1.9% through 2026 and 2027—just shy of the ECB’s 2% objective—while also noting that the eurozone’s growth outlook remains stable despite rising global trade tensions.

Her remarks reinforced similar sentiments expressed last week by Madis Müller, Governor of the Bank of Estonia and an ECB policymaker, who said he was comfortable with ECB President Christine Lagarde’s assertion that the easing cycle is “almost finished.” That statement followed the ECB’s move to cut rates by 25 basis points for the seventh consecutive time, bringing the deposit rate to 2%. Collectively, the commentary is feeding speculation that the central bank will shift to a longer-term pause, marking a subtle but important pivot in eurozone monetary policy.

Beyond rate speculation, the Euro’s gains are being amplified by its role as a safer alternative to the U.S. Dollar. Traditionally seen as a risk-off hedge, the Euro is increasingly benefitting from capital flows seeking refuge from the uncertainty swirling around Washington’s trade policy direction. With new tariff threats hanging over both China and the European Union, investors are finding fewer reasons to hold the Dollar, especially as political and fiscal risks in the U.S. grow more pronounced ahead of the November election. In this context, the Euro’s liquidity and relative stability make it a compelling hedge.

Meanwhile, the Japanese Yen, although weaker in this particular cross, continues to demonstrate resilience across other major pairs. Expectations remain firm that the Bank of Japan is gradually preparing to tighten policy further. BoJ Governor Kazuo Ueda reaffirmed this week that another interest rate hike could be on the table if the central bank gains confidence that underlying inflation will sustainably hover around 2%. That said, most analysts expect the BoJ to hold interest rates steady at 0.5% in its upcoming policy meeting on Tuesday. Investors will be watching closely for any shift in forward guidance that might point to rate normalization later in the year.

Technical Analysis

From a technical standpoint, EUR/JPY’s rally is being supported by a strong bullish structure. The pair recently confirmed its upward momentum after reaching the overbought zone on the stochastic oscillator, breaking above the 166.45 resistance level before briefly retreating to 165.75. The correction was short-lived, as the pair found firm support within its ascending channel, anchored by the 164.80 level. With this structure intact, traders are keeping their eyes on the next upside targets.

If EUR/JPY manages to decisively break and hold above the 166.45 mark, it could initiate a fresh leg higher toward 167.25. A continued bullish push might ultimately take the pair to the upper boundary of its channel near 168.50. Despite temporary fluctuations, the technical setup remains favorable for the bulls, so long as price action remains above the key support zones.

TRADE RECOMMENDATION

BUY EURJPY

ENTRY PRICE: 166.30

STOP LOSS: 164.00

TAKE PROFIT: 168.50

Risk Warnings and Disclaimers

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Eva Chen

Economic

Forex

Summary:

The US dollar has been negatively impacted by soft US inflation data and rising expectations for a Federal Reserve rate cut in September. As USDCAD continues to decline within a descending channel, persistent bearish sentiment has taken the lead.

SELL USDCAD

Close Time

CLOSED

1.36226

Entry Price

1.34700

1.36950

1.35366 +0.00485 +0.36%

72.4

Pips

Loss

1.34700

1.36953

Exit Price

1.36226

Entry Price

1.36950

Fundamentals

During the European session on Thursday, USDCAD resumed its downward trajectory within the descending channel. Soft US inflation data and increasing expectations for a Federal Reserve rate cut in September have weakened USDCAD.

The US Consumer Price Index rose by 0.1% in May, falling short of the expected 0.2% and marking the fourth consecutive month below the market's average forecast. The overall index grew by 2.4% YoY, while the core index (excluding food and energy) increased by 2.8%. The current price growth rate of the core index remained unchanged for the third consecutive month, at the lowest level in nearly four years.

Tariff disputes have not yet led to a significant spike in inflation, as new-priced goods have not yet reached consumers. However, it is also worth noting that sellers are not as eager to pass on costs in advance as in many other countries. During the first trade war in 2018, we also observed a slowdown in price increases with a minimal impact on overall inflation.

In response to this news, the US Dollar Index initially fell by 0.5% in the first few minutes but subsequently rebounded by more than half. After overnight digestion, the market returned to a downward trend. Overall, this is negative news for the US dollar, reinforcing the Federal Reserve's dovish stance.

Additionally, a trade agreement between the US and Canada is likely to be finalized during the G7 summit on June 15, which appears to be strengthening the Canadian dollar.

Persistent Bearish Sentiment Dominates_1

Technical Analysis

During the European session on Thursday, USDCAD completely relinquished the previous trading day's gains, trading around 1.3630. Technical analysis on the daily chart shows that as the asset continues to decline within the descending channel, persistent bearish sentiment has taken the lead.

A decisive break below 1.3603 would pave the way for a 100% Fibonacci retracement to 1.3349. Moreover, the current decline remains part of the head-and-shoulders top pattern that began in February. According to this pattern, a drop to 1.3470 by the bears would provide a decent adjustment.

Trading Recommendations

Trading Direction: Sell

Entry Price: 1.3676

Target Price: 1.3470

Stop Loss: 1.3695

Deadline: June 27, 2025, 23:55:00

Support: 1.3593/1.3540/1.3495

Resistance: 1.3675/1.3691/1.3702

Risk Warnings and Disclaimers

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Eva Chen

Commodity

Economic

Summary:

After closing in the positive territory on Wednesday, gold prices continued to rise on Thursday, currently trading around $3,380. Following the release of the US May inflation data, US Treasury yields plummeted significantly, and the ongoing weakness of the US dollar has helped to maintain the upward momentum of gold prices.

BUY XAUUSD

Close Time

CLOSED

3364.98

Entry Price

3450.00

3329.00

5099.90 -276.41 -5.14%

10.5

Pips

Profit

3329.00

3366.03

Exit Price

3364.98

Entry Price

3450.00

Fundamentals

On Thursday, gold prices once again reversed the early morning decline in the European session and carried the bulls to challenge the previous week's high. After breaking through the minimum starting level of $3,360, gold is now in a neutral upward range, slightly below last week's high of $3,403.

US President Trump issued another tariff threat on Wednesday, indicating that the initial market reaction to the positive Sino-US trade situation was fleeting. Additionally, the so-called escalation of geopolitical tensions in the Middle East has dampened investors' interest in high-risk assets, which is a boon for safe-haven gold.

Meanwhile, after data released on Wednesday showed that the US consumer price index in May rose less than expected, investors increased their bets that the Federal Reserve would restart the interest rate cut cycle in September. This is seen as another factor supporting the price of non-yielding gold and helping to prevent further pullbacks yesterday.

Geopolitical Tensions as Catalysts, Algorithmic Trading as Key Drivers for Price Reversal_1

Technical Analysis

Gold prices touched a one-week high in the Asian session on Thursday, extending Wednesday's nearly 1% gain. Weaker-than-expected US inflation data boosted bets on a Federal Reserve rate cut and a weaker US dollar, driving gold prices higher.

However, with the significant pullback in the New York session yesterday, it seemed that gold prices were "once again" on track to decline when. In the final 4-hour close before yesterday's close, prices surged by $26 in just 20 minutes. This move was algorithmically driven, not from geopolitical tensions (which had been reported two hours before the price rise). After breaking through the minimum requirement of $3,360 for the bulls to turn, the technical dynamics have turned bullish. This means that the head-and-shoulders top pattern will continue to play out. Therefore, investors are preparing for a new round of gains.

The bulls' immediate target is now $3,391, with the next target at $3,403, and the final target at $3,415.

Trading Recommendations

Trading Direction: Long

Entry Price: 3365

Target Price: 3450

Stop Loss: 3329

Deadline: June 27, 2025, 23:55:00

Support: 3371/3360/3339

Resistance: 3391/3403/3415

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

Released today, the UK April GDP data shows an unexpected decline, far below market expectations, which has caused the British pound to come under pressure and weaken. Technical analysis suggests a potential head and shoulders top formation.

SELL GBPUSD

Close Time

CLOSED

1.35692

Entry Price

1.32400

1.36200

1.37477 -0.00616 -0.45%

50.8

Pips

Loss

1.32400

1.36201

Exit Price

1.35692

Entry Price

1.36200

Fundamentals

During today's Asian trading session, the UK's latest April GDP data plunged 0.3%, marking the largest monthly decline since October 2023 and falling well short of the market's expectation of a small 0.1% decline. Although the UK economy grew 0.7% year-on-year in Q1, the weakness in April signals a weak start to Q2, with both the service sector and manufacturing sector slowing. Meanwhile, retail sales and PMI both dropped below the boom-bust line, indicating persistent weakness in domestic demand.

Meanwhile, UK exports to the US have been significantly impacted by the Trump administration's new tariff policies. In April, UK goods exports to the US fell by £2 billion (US$2.71 billion), the largest monthly decline since records began in 1997, exacerbating pressure on export-oriented industries.

Following the GDP data, the market increased bets on the Bank of England (BoE) cutting interest rates, with expectations of a total 52 basis point reduction this year. According to a recent Reuters survey, economists expect the BoE to cut rates by 25 basis points in August and again in the fourth quarter of 2025, bringing the interest rate down to 3.75%.

Technical Analysis

0.3% GDP Plunge Triggers Head and Shoulders Top, Sterling's 1.3420 Defense Line Under Pressure_1

As of the European trading session today, the GBP/USD has dropped sharply due to the impact of the April GDP decline, currently trading at 1.3570.

Based on the 4-hour chart, the candlestick structure of GBP/USD shows signs of forming the right shoulder of a head and shoulders top pattern. If the right shoulder is confirmed, the likelihood of a decline in GBP/USD in the near term will increase significantly. If the price subsequently breaks below the neckline at 1.3420, further downside potential will open up.