Crude Oil Faces Downside Risks Amid OPEC+ Hike and Weak Global Demand

Commodity

Summary:

WTI crude oil prices edge higher from recent lows but remain significantly below last week's peak, as market expectations for increased OPEC+ supply and slowing global demand weigh on sentiment.

SELL WTI

EXP

EXPIRED

64.000

Entry Price

57.000

66.000

57.233 -0.408 -0.71%

Pips

EXPIRED

57.000

67.535

Exit Price

64.000

Entry Price

66.000

West Texas Intermediate (WTI) crude oil prices showed modest signs of recovery on Monday, climbing slightly from two-week lows. However, any meaningful rebound remains elusive as futures hover near $65 per barrel—still roughly $12 below last Monday’s highs—amid a confluence of bearish macroeconomic and geopolitical developments. The subdued recovery is emblematic of broader market apprehension, as traders digest fresh data pointing to a softening global economy and rising expectations that OPEC+ will move ahead with another supply hike this week.

Prices have largely been range-bound in recent sessions, with the $66.00 level acting as a short-term ceiling. This technical resistance is proving difficult to breach, and with bearish structural forces gathering momentum, the outlook for crude remains cautious at best.

One of the key factors keeping oil bulls at bay is the anticipation of another production increase from the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+. Market sources indicate that the group is likely to proceed with a fourth consecutive monthly hike, adding another 411,000 barrels per day to global supply. While this strategy is part of a gradual unwinding of pandemic-era production cuts, the timing has raised eyebrows given the broader economic backdrop.

Indeed, demand-side indicators continue to flash warning signs. China’s National Bureau of Statistics reported that the country’s official manufacturing PMI contracted for a third straight month in June, reflecting deepening weakness in factory output and domestic demand. This contraction is particularly significant, given that China remains the world’s largest oil importer. The PMI data, coupled with a murky trade environment and lackluster export orders, suggests that Chinese crude demand may continue to underperform in the near term.

In the United States, the economy unexpectedly shrank in Q1, and although some indicators have since stabilized, uncertainty around consumer demand and industrial activity remains high. Meanwhile, the Eurozone continues to grapple with stagflationary pressures, with industrial output in key economies like Germany and France showing signs of fatigue. Together, these factors paint a picture of a sluggish global economy, ill-suited to absorb additional barrels coming onto the market.

Further limiting the upside for crude is the apparent de-escalation of tensions in the Middle East. U.S. President Donald Trump announced over the weekend that a ceasefire agreement between Israel and Iran had been reached, bringing a tentative end to a 12-day conflict that had briefly raised concerns over a broader regional war and potential supply disruptions.

While geopolitical risk premiums had spiked during the height of the conflict—especially given Iran’s strategic position near the Strait of Hormuz, a critical artery for global oil shipments—the easing of tensions has removed a key source of support for oil prices. That said, skepticism remains. A U.S. intelligence report cited by Reuters noted that recent American strikes on Iranian nuclear sites only marginally set back Tehran’s program. Iranian officials have also signaled that the country’s nuclear efforts remain intact, underscoring that the situation could re-escalate quickly.

Still, for now, the market appears to be pricing in a stable geopolitical environment, diminishing the need for risk hedging via oil futures.

In a separate development that underscores the fragile state of the broader energy sector, Prax Group’s holding company, State Oil, has reportedly entered administration. According to multiple market sources, the company—which owns oilfields in the Shetland Islands and operates hundreds of petrol stations across the United Kingdom—was forced to take the step after accumulating unsustainable losses. An official announcement is expected later on Monday.

This development, while isolated, highlights how high operational costs, narrowing margins, and shifting market dynamics are impacting even vertically integrated players in the oil value chain.

Technical Analysis

From a technical standpoint, WTI crude is currently locked in a narrow consolidation range. Despite attempts to stabilize around $65.00, the broader bias remains to the downside. Price action continues to occur below the 50-period Exponential Moving Average (EMA), signaling ongoing bearish pressure. Furthermore, the current pattern appears to be forming a distribution phase, with traders awaiting a breakout that could define the next directional move.

A key support level lies at $64.00, and a confirmed break below this threshold would likely trigger a retest of $62.00, followed by deeper targets at $60.00 and $57.00. These levels coincide with prior consolidation zones and Fibonacci retracement levels, offering potential checkpoints for bearish momentum.

Traders with a short bias are reportedly positioning around these technical levels. As of Monday, some are entering short positions at $64.00, targeting a move down toward $57.00 over the coming sessions, provided fundamental headwinds continue to outweigh geopolitical tailwinds.

TRADE RECOMMENDATION

SELL WTI

ENTRY PRICE: 64.00

STOP LOSS: 66.00

TAKE PROFIT: 57.00

Risk Warnings and Disclaimers

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Eva Chen

Forex

Economic

Summary:

The dollar is under pressure amid concerns over Federal Reserve independence and ballooning U.S. fiscal deficits. While a technical rebound has emerged, resistance remains formidable, with analysts projecting further downside.

BUY USDX

Close Time

CLOSED

96.500

Entry Price

100.200

94.600

97.950 -0.370 -0.38%

67.0

Pips

Profit

94.600

97.170

Exit Price

96.500

Entry Price

100.200

Fundamentals

The U.S. Dollar Index (USDX) rebounded modestly from three-year lows on Monday but remains below the 97.50 threshold, reflecting persistent weakness. The index has shed nearly 12% from its 2025 peak, marking its lowest level since 2022. Morgan Stanley strategists forecast an additional 9% decline, citing eroding confidence in Fed autonomy and escalating sovereign debt risks.

Reports indicate former President Trump is evaluating candidates to replace Fed Chair Powell, whose term expires in 2026. Leading contenders include Scott Bessent, Kevin Hassett, and Kevin Warsh. In a Fox News interview, Trump advocated for interest rates to fall to 1–2%, signaling potential political pressure on monetary policy.

Market Observations: Analysts warn that diminished policy independence and record deficit spending will likely anchor the dollar in a protracted downtrend. Trump’s proposed “big, beautiful” tax-cut bill, advancing in the Senate, could add $3–4 trillion to U.S. debt over the next decade. This has reignited concerns about fiscal sustainability, further clouding the dollar’s outlook.

Policy Interventions and Surging Deficit Weigh on Dollar’s Medium-Term Outlook_1

Technical Analysis

From the daily chart perspective, the US Dollar Index (DXY) remains entrenched in a descending channel that has persisted since April 2024, with upside momentum capped and the broader bearish structure intact. The recent tepid rebound has been consistently constrained by structural resistance between 97.60–98.00, limiting further upside potential.

Momentum Analysis: The MACD indicator remains weak below the zero line, with the signal line flattening slightly, indicating that bearish momentum has yet to intensify but the overall structure remains tilted to the downside. The Relative Strength Index (RSI) hovers between 40-45, signaling neither oversold conditions nor sufficient rebound strength, reinforcing the bearish bias.

The USDX is consolidating near 97.19 in a fragile manner, with its broader downtrend still intact. Despite a modest short-term rebound, the greenback remains capped below multiple resistance levels from a technical perspective.

Market sentiment stays bearish, suggesting a continued preference for short positions. A decisive break below the critical support at 96.80 could trigger further downside, though a notable rebound is likely near the 96.20 zone.

Trading Recommendations

Trading Direction: Buy

Entry Price: 96.50

Target Price: 100.20

Stop Loss: 94.60

Valid Until: July 15, 2025, 23:55:00

Support: 96.97/96.52/96.26

Resistance: 97.54/98.20/99.01

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Gold prices fell sharply early Monday, dropping to a one-month low near $3,265 as risk appetite improved following a trade pact between the U.S. and China and a ceasefire between Israel and Iran.

SELL XAUUSD

Close Time

CLOSED

3280.00

Entry Price

3200.00

3340.00

4299.39 +20.10 +0.47%

600.0

Pips

Loss

3200.00

3340.00

Exit Price

3280.00

Entry Price

3340.00

The price of gold (XAU/USD) extended its downward slide on Monday, retreating to a one-month low around $3,265 per ounce in early Asian trading, as global risk sentiment improved sharply following a breakthrough in U.S.-China trade relations and a temporary geopolitical lull in the Middle East. The precious metal, long favored as a safe-haven during periods of uncertainty, has come under renewed pressure amid waning geopolitical tensions and a growing sense of calm in financial markets.

The latest catalyst came from last week’s announcement that the United States and China reached a long-anticipated agreement to streamline rare earth shipments. The deal is being interpreted by markets as a symbolic thawing in trade relations between the world’s two largest economies—an outcome that has soothed investor nerves and lessened the immediate appeal of traditional safe-haven assets like gold.

Adding to the pressure on bullion, reports over the weekend confirmed a ceasefire between Israel and Iran, offering further evidence that recent geopolitical flashpoints may be easing, at least temporarily. Although markets remain cautious about the durability of such agreements, the near-term decline in perceived geopolitical risk has prompted traders to unwind gold positions and rotate back into riskier assets.

“The slowdown in geopolitics has offered an opportunity for investors to start taking profit because of the forward-looking prospects of some kind of kinetic war with China and the developments in the Middle East,” said Daniel Pavilonis, senior market strategist at RJO Futures. “With some of those risks temporarily diffused, the safe-haven bid is evaporating—at least for now.”

Looking ahead, market participants are turning their attention to a fresh round of commentary from Federal Reserve officials scheduled for later Monday. With inflation showing signs of moderation and Friday’s consumer spending data surprising to the downside, expectations are growing that the Fed may have to ease monetary policy sooner—and more aggressively—than previously thought.

Several investors have increased bets on multiple rate cuts this year, a shift that could eventually provide a new tailwind for gold. Lower interest rates reduce the opportunity cost of holding non-yielding assets like bullion, often driving inflows into the precious metals complex during dovish policy cycles.

Yet despite this supportive macro backdrop, gold has failed to maintain upward momentum in the short term, reflecting a broader risk-on mood and technical weakness that is starting to creep into charts.

Technical Analysis

From a technical standpoint, the gold market has shifted into a short-term bearish correction phase after failing to decisively break through resistance near $3,300. Last week’s price action saw the metal climb toward this key threshold, but overbought signals on the Relative Strength Index (RSI) hinted at fading bullish momentum.

Currently, gold is trading alongside a downward-sloping bias line, reinforcing the view that the precious metal is in a corrective move. The price remains capped below its 50-day Exponential Moving Average (EMA50), adding to the negative pressure.

The RSI has pulled back from extreme levels, suggesting the potential for continued softness unless fundamental catalysts—such as dovish Fed remarks or a resurgence of geopolitical tension—rekindle safe-haven flows.

The immediate support zone lies near $3,250, with a decisive breach potentially opening the door toward $3,200. On the upside, gold bulls would need to see a reclaiming of $3,280–$3,300 resistance, along with improving momentum indicators, to shift sentiment back toward the bullish side.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 3280

STOP LOSS: 3340

TAKE PROFIT: 3200

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The US Dollar remains pressured near 14-year lows, capped below 0.8000 as revived US debt fears and cautious optimism over renewed trade talks weigh on sentiment.

SELL USDCHF

Close Time

CLOSED

0.79800

Entry Price

0.78000

0.80800

0.79582 +0.00060 +0.08%

96.0

Pips

Profit

0.78000

0.78840

Exit Price

0.79800

Entry Price

0.80800

The US Dollar (USD) remained trapped near multi-year lows on Monday, unable to build momentum above the psychologically significant 0.8000 mark against the Swiss Franc (CHF). As investor sentiment swung between cautious optimism over renewed trade negotiations and deepening concerns over the ballooning US fiscal deficit, the Greenback struggled to make a convincing recovery after last week's slump toward the 0.7960 area — levels not seen in nearly 14 years.

At the heart of the Dollar’s weakness is a growing narrative that markets can no longer ignore: while hopes for de-escalation in trade disputes have lifted risk appetite, the US fiscal story continues to deteriorate in the background, creating a dual drag on the currency.

Investor sentiment received a lift on Monday following reports that the United States and China reached a preliminary understanding on the strategic rare earths trade — a key sector in which China holds significant leverage. This tentative agreement helped alleviate fears of an escalating trade standoff, particularly as both sides signaled intent to keep communication channels open.

Adding to the cautiously upbeat tone, the US resumed trade negotiations with Canada after talks broke down late last week. Analysts see this as a constructive signal that major trading partners remain willing to hash out differences, even as political tensions simmer beneath the surface.

However, the modest optimism on trade has been tempered by deeper structural worries about the health of the US fiscal position. Treasury Secretary Scott Bessent floated the idea of extending the current July 9 budget deadline to September 1, giving Washington more room to reach consensus with its trading partners — but also highlighting the persistent gridlock in US policymaking.

Markets are also increasingly fixated on a sweeping tax bill currently advancing through the Senate, which is projected to add between $3 billion and $4 billion to the already bloated US national debt. With government borrowing at multi-decade highs and debt-servicing costs rising alongside interest rates, investors are beginning to question the sustainability of the US fiscal path. As a result, the Dollar’s upside potential appears capped — especially against traditionally safe-haven currencies like the Swiss Franc.

In contrast, Monday also brought soft economic news out of Switzerland, though its impact on the Franc remained limited. The KOF Swiss Economic Institute’s leading indicator — widely used to gauge the country's economic trajectory — fell to 96.1 in June, down from 98.6 in May and well below consensus expectations of 99.3. The decline reflects a broad-based deterioration in sentiment across multiple sectors, with the report noting a “particular downward tendency in the general business situation.”

Yet, despite the weaker data, the Swiss Franc held firm, reinforcing its traditional status as a defensive asset in times of global uncertainty. The muted reaction underscores the market’s broader risk-off tilt — where safe-haven demand can offset local economic weaknesses, particularly when global peers like the US are battling deeper structural challenges.

Technical Analysis

From a technical standpoint, the USD/CHF pair continues to show signs of downside risk. After repeatedly failing to clear resistance near the 0.8000 level, price action has turned increasingly bearish. The pair is now trading well below the 50-day exponential moving average (EMA), signaling a dominant downtrend on the short-term chart.

More telling is the behavior of the Relative Strength Index (RSI), which recently emerged from overbought territory and has now printed a negative overlap — often an early warning sign of a bearish divergence in price momentum. This setup suggests the pair may be poised for further declines in the sessions ahead.

Immediate support lies near the recent low around 0.7960. A decisive break below this level could open the door for a deeper correction toward 0.7900, and potentially even 0.7825 — levels not seen since the early 2010s. On the upside, only a sustained break above 0.8000 would neutralize the current bearish tone and signal potential for a recovery.

TRADE RECOMMENDATION

SELL USDCHF

ENTRY PRICE: 0.7980

STOP LOSS: 0.8080

TAKE PROFIT: 0.7800

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

With only 10 days remaining until the U.S. deadline for imposing tariffs on the EU, the transatlantic tariff impasse could escalate to a 50% increase. This development is likely to undermine European export confidence and subsequently exert downward pressure on the euro.

SELL EURUSD

Close Time

CLOSED

1.17243

Entry Price

1.14900

1.17900

1.17394 +0.00011 +0.01%

65.7

Pips

Loss

1.14900

1.17902

Exit Price

1.17243

Entry Price

1.17900

Fundamentals

The EURUSD exchange rate is currently under sustained pressure, with the primary bearish fundamental factor being the escalating risks from the U.S.-EU tariff negotiations. With just ten days left until the U.S. deadline for imposing tariffs on the EU (July 9), the Trump administration has threatened to raise tariffs on EU goods across the board to a 50% benchmark (currently 50% for steel and aluminum, 25% for automobiles). Meanwhile, the EU’s proposed countermeasures targeting 95 billion euros of U.S. goods have failed to bridge internal divisions. Germany, facing potential export contractions of 38.5% in its automotive and pharmaceutical sectors, is inclined to compromise, while France remains firmly committed to a “zero-tariff” stance. This policy stalemate is exacerbating market concerns over a potential Eurozone recession and significantly increasing capital outflow pressures.

In the meantime, the structural differences in economic data between the U.S. and Europe are reinforcing the dollar’s advantage. The U.S. core PCE inflation unexpectedly rose to 2.7% in May, dampening expectations for interest rate cuts. Despite signs of weakness in personal consumption expenditures, Federal Reserve Chairman Powell’s statement that he is “not in a hurry to cut rates” has led to continued liquidity tightening through September. In contrast, the Eurozone is experiencing a third consecutive month of industrial output contraction, compounded by supply chain disruptions from trade diversions. This has intensified market doubts over the sustainability of the ECB’s high-interest-rate policy. Although Goldman Sachs maintains a long-term bearish outlook on the dollar, short-term risk-averse capital is accelerating its flow into the U.S. Treasury market, creating a pincer effect on the euro.

Technical Analysis

From the weekly chart perspective, EURUSD has recently risen to just below the key resistance level of 1.1760, with increased short-term upward pressure. Multiple attempts to break through this resistance level on the 4-hour chart have been unsuccessful, indicating significant pressure and a gradual buildup of bearish momentum in the market. Therefore, the likelihood of a short-term decline is increased.

At present, if EURUSD fails to effectively break through the 1.1760 resistance level during the European trading session, this could be considered a technical sell signal, with the market likely to adjust downward to the psychological support level of 1.1600. If this level is breached, the pair may then test the first weekly support level at 1.1480.

Trading Recommendations

Trading Direction: Sell

Entry Price: 1.1720

Target Price: 1.1490

Stop Loss: 1.1790

Valid Until: July 15, 2025, 23:00:00

Support: 1.1630/1.1480

Resistance: 1.1760/1.1909

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

This shift from support to resistance suggests that a more extended downtrend could be developing. If selling pressure resumes, a retest of the 143.74 low remains likely.

SELL USDJPY

Close Time

CLOSED

144.700

Entry Price

143.700

145.500

155.814 +0.255 +0.16%

83.2

Pips

Profit

143.700

143.868

Exit Price

144.700

Entry Price

145.500

The Core PCE data released on Friday by the U.S. Bureau of Economic Analysis served as a fresh catalyst for the U.S. Dollar Index (DXY). As the Federal Reserve’s preferred measure of inflation, the Core PCE offers critical insights into underlying price pressures and has a direct influence on interest rate expectations.

The headline PCE numbers were broadly in line with forecasts. On a monthly basis, prices rose by 0.1% in May, matching April’s pace. Year-over-year, the index increased by 2.3%, slightly above April’s 2.2%, yet still within the range expected by analysts.

However, the core figure, which excludes food and energy, showed a slightly stronger increase. It climbed 0.2% month-over-month—above the forecast of 0.1%—while the annual rate ticked up to 2.7%, beating the expected 2.6%. These figures suggest that underlying inflationary pressures remain persistent, which could complicate the Fed’s timing for any future rate cuts.

Meanwhile, the U.S. economy contracted by 0.5% in the first quarter of 2025, marking its first decline in three years. Consumer spending and personal income also showed signs of weakness. This combination of slowing growth and increasing political pressure on the Fed has heightened the likelihood of policy easing in the coming months.

In Japan, the Bank of Japan (BoJ) appears inclined to raise interest rates in response to inflation. However, concerns over financial stability continue to weigh on policymakers, prompting the BoJ to prefer determining the timing of additional hikes independently, rather than reacting solely to mounting inflationary pressures.

Food prices in Japan continue to rise sharply, with annual food inflation reaching 6.4% in June, up from 5.8% in May. However, most other components of the index showed subdued growth, leading to a slight decline in overall inflation. On a monthly basis, seasonally adjusted prices remained flat. Core inflation, excluding food and energy, declined to 1.8% year-over-year—below the BoJ’s 2% target. Nonetheless, the BoJ’s preferred gauge, which strips out only fresh food, showed a core inflation rate of 3.1%, identical to the headline figure.

Market expectations surrounding central bank policy have been somewhat less favorable for the yen. Investors continue to reassess the BoJ’s policy stance and remain skeptical about its commitment to further tightening—especially given how rate hikes appear tied to the outcome of U.S.–Japan trade discussions. A Deeper USDJPY Decline May Be Brewing_1

A Deeper USDJPY Decline May Be Brewing_1

Technical Analysis

USD/JPY extended its bearish move after breaking below the 200-period moving average and falling to a local low of 143.74. The pair has since bounced back, retracing to the 200-period MA, now acting as potential resistance around 144.77. This shift from support to resistance suggests that a more extended downtrend could be developing. If selling pressure resumes, a retest of the 143.74 low remains likely.

The 144.93 level is also a notable zone where the price previously reversed after its bullish rally. This level coincides with the 0.50–0.618 Fibonacci retracement zone, reinforcing its significance as a potential resistance area. With the RSI still hovering around neutral territory, bears may regain control from this region. Adding to the confluence, the 100-period moving average sits just above, at 146.26, acting as another layer of potential resistance to the upside.

Trading Recommendations

Trading direction: Sell

Entry price: 144.70

Target price: 143.75

Stop loss: 145.50

Validity: Jul 04, 2025 15:00:00

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The New Zealand Dollar extended gains for a fifth straight session on Friday, rallying to 0.6071 against the US Dollar amid broad USD weakness, political interference concerns at the Fed, and improving consumer sentiment in New Zealand.

BUY NZDUSD

Close Time

CLOSED

0.60600

Entry Price

0.62500

0.59800

0.58040 -0.00044 -0.08%

53.3

Pips

Profit

0.59800

0.61133

Exit Price

0.60600

Entry Price

0.62500

The New Zealand Dollar (NZD) continued its impressive rebound on Friday, extending its winning streak against the US Dollar (USD) to a fifth consecutive session as investors increasingly favored risk-sensitive assets amid mounting uncertainty over Federal Reserve policy and signs of resilience in New Zealand’s domestic economy.

At the time of writing, NZD/USD is trading around 0.6071 — its highest level in nearly six weeks — and hovering just below year-to-date highs. The move marks a sharp reversal from the pair’s recent lows, as broad-based weakness in the Greenback continues to drive momentum in favor of the Kiwi. The latest rally has been supported by a combination of geopolitical calm, hawkish repricing in New Zealand interest rate markets, and growing investor discomfort over political interference in U.S. monetary policy.

A key driver behind the Greenback’s underperformance has been rising speculation over Federal Reserve independence. U.S. President Donald Trump ramped up criticism of Fed Chair Jerome Powell this week, prompting renewed concerns over central bank autonomy just as the monetary authority tries to navigate a complex economic landscape.

Adding to investor unease, a report from The Wall Street Journal on Friday suggested Trump could name a preferred successor to Powell as early as September, with talk of a “shadow chair” — an informal advisor who would influence monetary policy in advance of Powell’s term expiration in May 2026. That prospect has unsettled markets, especially as it coincides with a noticeable shift in rate cut expectations. Traders are now pricing in three interest rate cuts for 2025, up from two earlier this week, according to the CME FedWatch Tool.

Reinforcing dovish bets, the latest U.S. inflation data showed that the Fed’s preferred price gauge — the core Personal Consumption Expenditures (PCE) Index — rose 0.2% month-on-month in May, slightly above consensus forecasts of 0.1%. On a yearly basis, core PCE climbed to 2.7% from 2.6%, modestly exceeding expectations but still pointing to sticky price pressures that are slowing the path toward the Fed’s 2% target.

Meanwhile, the U.S. Dollar Index (DXY) remained pinned near a three-year low, trading around 97.10 and showing little sign of recovery amid increased political noise and a risk-on backdrop driven by easing tensions in the Middle East.

In stark contrast to the U.S., domestic data in New Zealand painted a more encouraging picture. The ANZ-Roy Morgan Consumer Confidence Index jumped by nearly 6 points to 98.8 in June — its highest reading in half a year. Confidence improved across all subcomponents, including a notable uptick in households saying now is a good time to purchase big-ticket items, suggesting an easing in financial pessimism as inflation begins to moderate.

This rebound in sentiment comes as the Reserve Bank of New Zealand (RBNZ) appears to be nearing the end of its aggressive easing cycle. Having cut the Official Cash Rate (OCR) six consecutive times since August 2024 — from 5.5% to the current 3.25% — the central bank is now adopting a more cautious, data-dependent posture.

Governor Christian Hawkesby recently stated that a further cut in July is “not a done deal,” according to commentary from BHH Marketview. The swaps market is echoing that caution, pricing in just a 20% chance of a July cut and anticipating a shallow path of easing from here — with the OCR expected to bottom between 2.75% and 3.00% in the coming year.

This shift in tone has added to the Kiwi’s allure, particularly against the backdrop of a weakening U.S. Dollar and solid local economic underpinnings.

The broader backdrop also supports NZD strength. Market sentiment was buoyed this week by news that a ceasefire agreement had been reached between Iran and Israel after nearly two weeks of heightened hostilities. U.S. President Donald Trump confirmed on Tuesday that the truce was in effect, lifting global equities and risk-linked currencies like the NZD.

While the durability of the ceasefire remains in question — with Reuters reporting that U.S. strikes only temporarily set back Iran’s nuclear program — the short-term easing in geopolitical tension has prompted investors to rotate out of safe-haven assets like the USD and into higher-yielding currencies and equities.

Technical Analysis

Technically, NZD/USD continues to trade within a bullish structure after recovering sharply from its six-week low earlier in the month. The pair is now preparing to test a key resistance level at 0.6075. A clear break above this zone would likely accelerate the bullish momentum and put the year-to-date highs well within reach.

Despite the strong rally, short-term momentum indicators such as the Relative Strength Index (RSI) are beginning to flash overbought signals. However, the dominant trend remains upward, underpinned by the formation of a strong minor bullish wave on the lower timeframes. A brief period of consolidation may be required to absorb overbought pressures, but dips are likely to remain shallow unless the macro backdrop shifts significantly.

Initial support sits near the 0.6020 level, followed by the more critical 0.5960 zone, which coincides with the 50-day moving average. As long as NZD/USD holds above these levels, the technical bias favors continued upside.

TRADE RECOMMENDATION

BUY NZDUSD

ENTRY PRICE: 0.6060

STOP LOSS: 0.6980

TAKE PROFIT: 0.6250

Risk Warnings and Disclaimers

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