Geopolitical Impact Dully Digested; Focus Shifts to Fed Rate Decision

Commodity

Middle East Situation

Summary:

Gold prices surged to $3,452 on Monday before retreating. The strength in gold prices reflects the heightened demand for safe-haven assets amid escalating geopolitical tensions and a broad-based US dollar weakness.

SELL XAUUSD

Close Time

CLOSED

3404.64

Entry Price

3287.00

3475.00

4211.39 +13.48 +0.32%

181.5

Pips

Profit

3287.00

3386.49

Exit Price

3404.64

Entry Price

3475.00

Fundamentals

During the Asian session on Monday, gold prices attracted some buying interest, breaking strongly through the $3,450 mark. The escalation of tensions in the Middle East and increasing expectations for a Fed rate cut propelled gold prices to their highest level in over a month.

Since the weekend, the ongoing conflict between Israel and Iran has intensified, sparking concerns over broader geopolitical ramifications in the region. In this environment of waning risk appetite, capital is flowing into defensive assets like gold. The market currently believes that if the conflict between Israel and Iran further escalates in the coming days, gold prices could reach new all-time highs.

Since the close on Friday, gold prices have recorded their best closing price since April 21 and have formed a bullish candlestick pattern. The Relative Strength Index (RSI) is currently trending upward, indicating that strong bullish momentum is building, and prices are expected to continue rising over the next few trading days. If gold prices break through $3,500, it will open up further upside potential, potentially reaching $3,600.

However, we believe that gold prices' failure to continue rising after Monday's gap-up opening and their subsequent retreat during the European session indicates that the market's heightened emotions have been digested. Meanwhile, investors' attention is shifting to this week's Federal Reserve meeting.

Although the Fed is expected to hold interest rates steady, investors will closely monitor any forward guidance on rate cuts, especially after the US released weaker-than-expected inflation data, which has further reinforced market expectations that the Fed could ease policy as early as September.

Additionally, market participants are awaiting the specific details of President Trump's next round of tariffs. Reports indicate that the White House is preparing to implement these trade measures in the coming weeks. These measures are key to assessing the overall economic outlook and also provide more trading opportunities for gold's trajectory.

Geopolitical Impact Dully Digested; Focus Shifts to Fed Rate Decision_1

Technical Analysis

Amid the escalation of weekend geopolitical conflicts, gold's safe-haven demand surged, causing prices to gap up on Monday and test the seven-week high of $3,452.

The strength in gold prices has buoyed market sentiment. Judging from the recent statements from both sides, we can assume that tensions may ease slightly but remain elevated, which will temporarily cap further upside in gold prices.

Although the technical picture on the daily chart remains firmly bullish, the upward momentum may slow due to some profit-taking and the stochastic indicator entering overbought territory. Meanwhile, gold prices' breakout above the May 7 high of $3,438 aligns with the structural transformation of a head-and-shoulders bottom pattern. Once this pattern is completed, the market may revert to a downward trend.

Trading Recommendations

Trading Direction: Sell

Entry Price: 3442

Target Price: 3287

Stop Loss: 3475

Deadline: July 01, 2025, 23:55:00

Support: 3408/3395/3378

Resistance: 3444/3447/3452

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The New Zealand Dollar rises sharply against the US Dollar to trade near 0.6040, gaining on a rebound in global risk sentiment despite heightened tensions between Israel and Iran.

BUY NZDUSD

Close Time

CLOSED

0.60499

Entry Price

0.61600

0.60000

0.57802 +0.00048 +0.08%

49.9

Pips

Loss

0.60000

0.59998

Exit Price

0.60499

Entry Price

0.61600

The New Zealand Dollar (NZD) surged on Monday, marking a significant intraday gain of 0.5% to hover near the 0.6040 mark against the US Dollar (USD), as traders warmed up to riskier assets even in the face of escalating geopolitical tensions in the Middle East. This renewed appetite for risk came despite Israel’s intensification of military operations targeting Iranian nuclear and defense infrastructure.

The uptick in the NZD/USD pair highlights the currency market’s complex dynamics, where traditional risk-off triggers such as armed conflict are being momentarily outweighed by broader macroeconomic expectations — notably the Federal Reserve’s upcoming monetary policy decision.

In a move that would typically send shockwaves across global financial markets, Israel launched a strategic offensive on Iranian military and nuclear sites late last week. The operation was reportedly aimed at curbing Iran’s nuclear ambitions, stoking fears of a broader regional conflict. However, despite the severity of the situation, investor sentiment appeared more resilient than expected, with equities inching higher and commodity-linked currencies like the Kiwi posting gains.

The resilience in risky assets suggests that investors are positioning themselves ahead of key macroeconomic events rather than solely reacting to geopolitical developments. The US Dollar Index (DXY) slipped toward the 98.00 level after early session strength, reflecting a rotation out of the safe-haven Greenback and into higher-yielding currencies.

Looking ahead, attention turns sharply to the US Federal Reserve’s rate decision this Wednesday. While the central bank is widely expected to hold rates steady in the 4.25%–4.50% range, the focus will be on Fed Chair Jerome Powell’s tone during the post-decision press conference and the updated "dot plot" projection.

According to the CME FedWatch Tool, markets are currently pricing in a high probability of a pause in the Fed’s tightening campaign. However, Powell’s guidance and the dot plot will likely offer vital clues on whether rate cuts are still on the table later this year, or if the Fed will stay the course amid sticky inflation.

Another potential market mover arrives just a day prior, with the release of US retail sales data for May. Consensus expectations suggest a 0.7% decline in consumer spending, a critical metric for gauging the resilience of the US economy. Any material deviation from expectations could further shift sentiment and reshape positioning in FX markets, especially for pairs like NZD/USD.

Technical Analysis

From a technical standpoint, the NZD/USD pair has successfully bounced off a short-term bullish trendline, showing strong intraday momentum. After a period of bearish consolidation, signs of recovery emerged as the Relative Strength Index (RSI) rebounded from oversold territory, suggesting that the downside correction may be losing steam.

The 50-day Exponential Moving Average (EMA50), which had acted as dynamic resistance in recent weeks, is being tested once again. A decisive break above this level could pave the way for further gains toward the next key resistance zone near 0.6160 — a level that aligns with previous price action congestion and psychological resistance.

If momentum continues and broader market sentiment remains constructive, bulls may aim for this upside target in the short term. However, any dovish surprise from the Fed or an unexpected intensification in geopolitical risk could quickly shift the tide.

TRADE RECOMMENDATION

BUY NZDUSD

ENTRY PRICE: 0.6050

STOP LOSS: 0.6000

TAKE PROFIT: 0.6160

Risk Warnings and Disclaimers

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Alan

Commodity

Summary:

The recent intensification of the conflict between Israel and Iran has propelled oil prices upward. Iran has even hinted at the possibility of closing the Strait of Hormuz, which has further exacerbated market fears of supply chain disruptions.

BUY WTI

Close Time

CLOSED

70.934

Entry Price

77.900

68.400

59.190 -0.619 -1.03%

253.4

Pips

Loss

68.400

68.392

Exit Price

70.934

Entry Price

77.900

Fundamentals

The recent Israeli airstrikes on Iranian nuclear facilities and military targets have directly triggered a surge in safe-haven buying in the crude oil market, driving up prices significantly. The severity of this conflict far exceeds previous incidents—the casualties among Iran’s Revolutionary Guard Corps and nuclear scientists, as well as the shutdown of production platforms at the South Pars gas field following Israeli strikes, have all intensified market concerns over potential disruptions to the Middle East’s crude oil supply chain.

Meanwhile, Iranian officials have indicated that they are seriously considering closing the Strait of Hormuz. As a crucial conduit for global crude oil transportation, approximately one-third of the world’s seaborne crude oil trade passes through the Strait. JPMorgan and other institutions have priced the risk of a closure as a potential oil price shock to $120-$130 per barrel. Although the market currently assesses the probability of a complete closure at only 7%, safe-haven funds have been pouring into crude oil and other commodity markets to hedge against the risk of future supply disruptions.

Additionally, the U.S. and European Strategic Petroleum Reserves (SPR) have been continuously released over the past few months, but the scale of releases has significantly diminished, and expectations for restocking or partial replenishment are beginning to emerge. Reports from Morgan Stanley and other investment banks suggest that if the Middle East conflict escalates further and affects maritime transportation, global inventories would need to allocate an additional 1 million barrels per day to cover the supply gap. This supply deficit is expected to push up oil prices in the short term. On the demand side, China’s “Warm Europe” policy and India’s early entry into the monsoon season, which increases transportation fuel demand, are also providing strong support.

Overall, concerns over supply chain security and the seasonal upturn in demand are giving crude oil bulls a clear advantage at this critical juncture.

Technical Analysis

From the daily chart, WTI crude oil surged by over 10% on June 13 (reaching a high of $74.68), breaking through the key psychological level of $70.00 and the previous resistance at $71.97. This has opened up further upside potential, with the next target likely to test the resistance at $79.35.

In terms of moving averages, the MA20 has crossed above the MA60 to form a bullish golden cross, indicating strong upward momentum and increasing the likelihood of further gains.

Traders are advised to adapt a strategy of buying on dips.

Trading Recommendations

Trading Direction: Long

Entry Price: 70.50

Target Price: 77.90

Stop Loss: 68.40

Valid Until: June 30, 2025, 23:00:00

Support: 69.42/67.77

Resistance: 73.44/74.68

Risk Warnings and Disclaimers

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Manuel

Forex

Economic

Summary:

The proximity of these moving averages, combined with a slight rebound from this support zone, suggests the potential for a bullish reversal in the short term.

BUY GBPUSD

Close Time

CLOSED

1.35500

Entry Price

1.35950

1.35100

1.33176 -0.00136 -0.10%

45.0

Pips

Profit

1.35100

1.35951

Exit Price

1.35500

Entry Price

1.35950

Tensions in the Middle East continue to escalate, with Iran reportedly informing mediators from Qatar and Oman that it “will not negotiate under attack,” according to a source familiar with the ongoing dialogue. This comes amid intensified military exchanges between Iran and Israel. The same source denied recent reports suggesting that Tehran had reached out to Qatar and Oman with a proposal to involve the U.S. in brokering a ceasefire or resuming nuclear talks, stating such claims are “inaccurate.”

Meanwhile, U.S. President Donald Trump affirmed Washington’s unwavering support for Israel, stating on Sunday that although he hopes for a resolution between Iran and Israel, “they’ll have to fight it out.” Trump also reportedly rejected a proposed Israeli plan to target Iran’s Supreme Leader Ayatollah Ali Khamenei, emphasizing his preference to keep the U.S. from being drawn directly into the conflict—for now.

On the economic front, Thursday’s release of the U.S. Producer Price Index (PPI) for May added to signs of cooling inflation. Headline PPI rose 2.6% year-over-year, matching analysts’ expectations and slightly surpassing April’s 2.5%. More notably, core PPI—which excludes volatile food and energy prices—eased to 3.0% from the previous month’s 3.2%, reinforcing the narrative that inflationary pressures are beginning to moderate.

Following a weaker-than-expected Consumer Price Index (CPI) reading earlier in the week, the PPI data has fueled market expectations that the Federal Reserve may be positioning for a potential rate cut as soon as September. A softer inflation outlook typically benefits gold, as the precious metal becomes more attractive in a low-rate environment due to its non-yielding nature.

Across the Atlantic, the latest figures from the UK’s Office for National Statistics (ONS) revealed a sharper-than-expected contraction in economic activity. The British economy shrank by 0.3% in April, missing the consensus forecast of a 0.1% decline. This downturn follows a 0.2% GDP expansion in March. According to the ONS, the contraction was largely driven by a significant drop in exports to the United States, linked to the recent implementation of U.S. trade tariffs. "Following four consecutive monthly increases, April saw the largest recorded monthly fall in goods exports to the U.S., with broad-based declines across most categories of goods," the agency reported.

This unexpected weakness may pressure the Bank of England (BoE) to reconsider its cautious approach to monetary policy. In May, the central bank cut interest rates by 25 basis points to 4.25%, signaling a "gradual and measured" stance on further easing. However, the recent data could prompt a more flexible shift if economic weakness persists. Bullish Momentum May Build from Key Moving Averages_1

Bullish Momentum May Build from Key Moving Averages_1

Technical analysis

The GBP/USD pair is currently finding support near the 1.3536 level, where both the 100-period and 200-period moving averages on the one-hour chart are closely aligned—at 1.3543 and 1.3546, respectively. The proximity of these moving averages, combined with a slight rebound from this support zone, suggests the potential for a bullish reversal in the short term. A sustained move higher could open the door to retest the next resistance zone near 1.3595.

The Relative Strength Index (RSI) stands at 43.61, a level that remains within neutral territory. However, if the pair continues to hold above the current support, the RSI may begin to trend higher, possibly confirming a new upward leg. Conversely, if GBP/USD breaks decisively below 1.3536, bearish momentum could gain traction, particularly if renewed demand for safe-haven assets like the U.S. dollar strengthens amid geopolitical uncertainty.

Trading Recommendations

Trading direction: Buy

Entry price: 1.3550

Target price: 1.3595

Stop loss: 1.3510

Validity: Jun 20, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Forex

Economic

Summary:

As Europe embraces a stronger euro and fiscal support, the era of monetary easing is drawing to a close. Meanwhile, New Zealand's BNZ Manufacturing Index has plunged to 47.5, re-entering contraction territory.

BUY EURNZD

Close Time

CLOSED

1.91149

Entry Price

1.96200

1.89000

2.01553 +0.00002 +0.00%

337.3

Pips

Profit

1.89000

1.94522

Exit Price

1.91149

Entry Price

1.96200

Fundamentals

Isabel Schnabel, a member of the European Central Bank's Executive Board, indicated on Thursday that the ECB's monetary easing cycle is "nearing its end," given the stable medium-term inflation outlook and improved macroeconomic conditions. She confidently projected an inflation rate of just 1.6% for 2026, attributing the temporary decline in inflation to base effects in energy prices and the euro's strength.

Schnabel painted a relatively optimistic picture of the eurozone's economic prospects, noting that despite heightened global trade tensions, eurozone economic growth remains "broadly stable." Private consumption continues to be a key pillar of support for the economy, while the manufacturing and construction sectors are also showing signs of recovery. She emphasized that "additional defense and infrastructure spending has offset the impact of tariffs on economic growth."

These structural shifts, combined with the euro's resilience and the strong performance of equity markets, reflect a "new European growth narrative," which could enhance the region's economic standing.

In contrast, New Zealand's BNZ Manufacturing Index has fallen to 47.5, re-entering contraction territory.

The latest data released on Friday showed that New Zealand's Manufacturing PMI for May plummeted to 47.5 from 53.3 in April, highlighting the pressures faced by the manufacturing sector, including declining orders, rising costs, and waning confidence.

The New Orders Index also dropped from 50.8 to 45.3, supporting the view that the economy's return to a growth trajectory is at risk of being disrupted.

The sharp decline in business confidence is also evident, with 64.5% of respondents providing negative assessments, up from 58% in April. This reflects the growing pessimism among manufacturers as they grapple with falling demand, weak forward orders, and subdued consumer spending. Rising input costs, ongoing economic uncertainty, and stalled investment plans have further exacerbated the pressure on businesses.

Previously, the market had anticipated steady progress for New Zealand's economy in 2025, but the latest PMI data suggests an increased risk that the GDP rebound seen in Q4 2024 and Q1 2025 could stall (bearish for the NZD).

Mixed Indicators Signal High Volatility with Expanding Trading Range_1

Technical Analysis

The EURNZD pair formed a head-and-shoulders top pattern between April 2 and 15 but failed to fully materialize the pattern's downside target below 1.8798. Instead, it recently broke above the consolidation range at 1.9163, signaling a potential shift in market sentiment.

The moving averages (MA 5, 10, 20, 50, 100, and 200) have all turned positive, generating a consistent "buy signal."

The Relative Strength Index (RSI 14) stands at 57.8, within the neutral-to-bullish range but not yet overbought, indicating ample upside potential.

The Moving Average Convergence Divergence (MACD) has slightly turned positive, supporting the continuation of upward momentum.

The Average Directional Index (ADX) is at 5, signaling a strong trend with a clear upward bias and potential for continuation.

The Average True Range (ATR) reflects high volatility and an expanding trading range.

The technical outlook for the asset is currently bullish. Traders are advised to wait for a suitable pullback to enter long positions, employing a trend-following strategy with stop-loss levels set based on support levels. If the pair breaks above the resistance level at 1.9238, it could open the door for the next round of bullish targets.

Trading Recommendations

Trading Direction: Long

Entry Price: 1.9115/1.9080

Target Price: 1.9620

Stop Loss: 1.8900

Deadline: June 28, 2025, 23:55:00

Support: 1.9115/1.9080/1.8983

Resistance: 1.9237/1.9266/1.9296

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

Gold (XAU/USD) is extending gains above $3,430 amid intensifying Israel-Iran conflict and rising geopolitical risks, while investors eye key US consumer sentiment and inflation expectations data.

BUY XAUUSD

Close Time

CLOSED

3420.00

Entry Price

3500.00

3380.00

4211.39 +13.48 +0.32%

400.0

Pips

Loss

3380.00

Exit Price

3420.00

Entry Price

3500.00

Gold prices have continued their steep climb into Friday’s session, buoyed by an escalating geopolitical crisis in the Middle East as Israel ramps up military strikes on Iran. The ongoing conflict has stirred broad-based risk aversion, sending investors flocking to traditional safe havens such as gold, which now trades above $3,430 per ounce—a fresh multi-month high.

The precious metal’s latest rally is underscored by mounting global anxiety after Israel launched what it described as a “coordinated and targeted” series of airstrikes deep into Iranian territory. According to reports from Bloomberg and Reuters, Israeli forces targeted over 100 strategic locations using roughly 200 air force planes. Among the casualties are senior Iranian military figures, including Hossein Salami, head of the Islamic Revolutionary Guard Corps, and Mohammad Bagheri, Iran’s military chief of staff.

Israeli Prime Minister Benjamin Netanyahu confirmed the strikes, stating that they were aimed at crippling the heart of Iran’s nuclear enrichment program. The military offensive followed a damning resolution by the UN nuclear watchdog, accusing Tehran of breaching the Nuclear Non-Proliferation Treaty. In defiance, Iran declared its intention to accelerate its nuclear activities, claiming the action was in response to a “flagrant violation” of its sovereignty.

The United States has expressed support for Israel’s military campaign, further compounding the geopolitical risks. In a striking interview with ABC News, former US President Donald Trump remarked, “They got hit hard. Very hard. And there’s more to come. A lot more.” On social media, Trump doubled down, saying he had given Iran multiple chances to negotiate but that “they just couldn’t get it done.”

As fears of a broader regional conflict mount, risk-off sentiment is dominating financial markets, propelling gold higher. The exodus to safety is also being fueled by concerns that the US may be drawn deeper into the conflict, following reports that American personnel are being repositioned across the Middle East. Plans for a sixth round of US-Iran nuclear talks, originally scheduled for this weekend, have been scrapped amid the chaos.

The geopolitical landscape is further complicated by international condemnation of the attacks. Chinese foreign ministry spokesperson Lin Jian urged all parties to “avoid further escalation” and reiterated Beijing’s willingness to mediate in the interest of regional peace. Saudi Arabia also denounced the strikes, calling for restraint and dialogue.

Against this tense backdrop, markets are preparing for key US economic data that could shape near-term monetary policy expectations. Of particular importance is the University of Michigan Consumer Sentiment Index, due for release later today. The report, which includes both headline sentiment and closely watched inflation expectations, is regarded as a leading barometer of consumer confidence and price outlook.

The Federal Reserve will be paying especially close attention to the one-year and five-year inflation expectations components, as policymakers weigh their next moves. The sentiment data comes on the heels of this week’s inflation prints, which have offered mixed signals about the pace of price pressures.

On Thursday, the US Producer Price Index (PPI) showed a modest cooling in wholesale inflation. Headline PPI rose 2.6% year-on-year in May, matching analyst expectations and slightly up from April’s 2.5%. Core PPI, which strips out volatile food and energy components, eased to 3.0% from 3.2%. These figures followed Wednesday’s Consumer Price Index (CPI) release, which also signaled a softening of inflationary pressures at the consumer level.

Still, with Middle East tensions threatening to disrupt oil flows and global supply chains, there’s a renewed risk that geopolitical instability could reverse recent disinflationary trends and reignite cost pressures.

Technical Analysis

From a technical standpoint, gold remains in a robust short-term uptrend. The metal’s price action is currently testing resistance near $3,435, with attempts to consolidate above this level suggesting ongoing bullish momentum. While overbought conditions on the Relative Strength Index (RSI) are emerging, price action remains underpinned by a bullish corrective trend on the four-hour chart.

Intraday analysis reveals that gold continues to trade above the $3,400 threshold, with immediate support located in the $3,400–$3,410 range. Deeper support sits around $3,375–$3,385, coinciding with a former top/bottom flip zone. A break below this region may prompt a short-term pullback, though the broader bias remains bullish.

The key psychological level to watch is $3,500, which serves as the next upside target should momentum continue. A daily close above this resistance would reinforce the bullish case and open the door for further gains. Traders are advised to exercise caution with short positions, given the strength of the upward trend and persistent geopolitical tailwinds.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 3420

STOP LOSS: 3380

TAKE PROFIT: 3500

Risk Warnings and Disclaimers

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Alan

Commodity

Summary:

Gold surged to a high of $2,444.34 as Israeli airstrikes on Iran ignited geopolitical risks, while weaker-than-expected U.S. jobless claims and PPI data fueled market bets for early Fed rate cuts in the second half. This dual catalyst propelled gold past multiple technical resistance levels to hit a two-month peak. Strong short-term buying momentum suggests the bullish trend remains intact.

BUY XAUUSD

Close Time

CLOSED

3421.91

Entry Price

3530.00

3375.00

4211.39 +13.48 +0.32%

469.1

Pips

Loss

3375.00

Exit Price

3421.91

Entry Price

3530.00

Fundamentals

Spot gold (XAU/USD) climbed to near two-month highs on Friday (June 13th), driven by both geopolitical tensions and shifting macroeconomic expectations. Overnight (UK time), Israel launched airstrikes against multiple Iranian nuclear facilities and military targets, dramatically escalating Middle East tensions and triggering market risk-aversion. Investors dumped risk assets in favor of gold, pushing prices to an intraday high of $3,444.34/oz during the Asian session, a peak gain of approximately 1.7%.

Meanwhile, U.S. economic data further bolstered gold. Initial jobless claims remained at an eight-month high, while May PPI growth fell short of expectations, signaling a potential easing of inflation and a cooling labor market. This reignited expectations for earlier Fed rate cuts in the second half of 2025, weakening both the U.S. dollar and real yields to provide a dual tailwind for gold. The USDX faced additional pressure from U.S.-China trade talks and U.S. debt ceiling gridlock, failing to stage a meaningful rebound and offering gold further upside support.

Technical Analysis

Geopolitical Flares Up! Safe-Haven Bulls Charge Back_1

Gold ascends straight up from May's low of 3250.00, testing the high between 3400.00 and 3430.00. After crosses above the short-term resistance of 3403.46, gold once touched 3444.34, breaking through the high of May 7th (3437.93). With the upper space opening, gold bears are retreating under a heatwave of buying.

Regarding indicators, MACD shows a golden cross with the signal line accelerating above zero and expanding red momentum bars. RSI is moving between 60 and 70 without entering the overbought zone, suggesting a strong uptrend at the moment.

Buying at lows is recommended.