Risk Premium Persists, Although at a Negligible Level

Eva Chen

Commodity

Political

Summary:

Oil falls to two-week low as Israel agrees to Trump's ceasefire offer.

SELL WTI

Close Time

CLOSED

64.932

Entry Price

60.420

67.950

59.971 +0.162 +0.27%

16.5

Pips

Profit

60.420

64.767

Exit Price

64.932

Entry Price

67.950

Fundamentals

The recent agreement by Israel to the Trump-brokered ceasefire proposal with Iran has alleviated concerns regarding potential disruptions to Middle Eastern crude oil supplies, causing oil prices to fall to a two-week low. Although a risk premium remained embedded in crude oil prices, it has largely dissipated. If the ceasefire agreement is observed as announced, investors may anticipate a normalization of oil prices.

Looking ahead, the evolving situation in the Middle East continues to drive volatility in crude oil prices, with investors likely to monitor geopolitical developments for cues. Signs of de-escalation could trigger further profit-taking on prior gains, while an escalation of tensions could prompt a fresh rally in oil prices due to global supply concerns.

Furthermore, inventory data may also induce short-term fluctuations, with the API report indicating another substantial draw in inventories, leading traders to position themselves for a similar outcome from the EIA report.

Risk Premium Persists, Although at a Negligible Level_1

Technical Analysis

Technically, the overnight sell-off in WTI crude oil prices reinforced the resistance zone between approximately US$78.45 and US$80.77 (year-to-date highs). It is evident that a breakout above this resistance zone will be challenging for crude oil.

WTI crude oil prices have retraced significantly from recent highs near US$76.71 and are currently trading around US$64.27. A death cross appears imminent as the 100-day SMA approaches the 200-day SMA from above.

This decline marks a notable reversal of the prior strong uptrend, indicating that profit-taking and bearish sentiment are weighing on prices. However, prices are testing a favorable area that could attract buyers and drive a resumption of the uptrend towards the next bullish target.

Based on Fibonacci extensions, WTI crude oil may retrace to the 38.2% level (US$70.93), but failed to provide sufficient support, subsequently rising to the 50% level (US$73.03). Sustained bullish momentum could drive it up to the 61.8% level (US$75.13), followed by the 76.4% level (US$77.73). The ultimate extension is at US$81.94 per barrel, assuming a favorable scenario.

However, technical indicators paint an increasingly bearish picture. The stochastic oscillator has plummeted from the overbought territory and is now approaching oversold conditions, suggesting potential continued selling pressure in the short term. Nevertheless, the rapid decline of the oscillator also indicates a possible rebound in the near term once extreme oversold levels are reached.

Similarly, the Relative Strength Index (RSI) has also declined significantly from its highs and is currently trending towards the oversold zone. The rapid weakening of momentum suggests that bears have firmly grasped control of the market, but the indicator's proximity to oversold conditions may signal an impending rebound.

Indeed, given that the 1D structure remains in a death cross, it is recommended to continue to go short at the highs.

Trading Recommendations

Trading Direction: Sell

Entry Price: 64.80

Target Price: 60.42

Stop Loss: 67.95

Valid Until: July 10, 2025 23:55:00

Support: 63.68, 62.70, 60.58

Resistance: 65.29, 66.90, 67.84

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Manuel

Central Bank

Commodity

Summary:

After dipping to 3295, the metal quickly rebounded, forming a local low without extending to new lows.

BUY XAUUSD

Close Time

CLOSED

3331.17

Entry Price

3395.00

3280.00

4217.40 +19.49 +0.46%

511.7

Pips

Loss

3280.00

3279.88

Exit Price

3331.17

Entry Price

3395.00

Fed Chair Jerome Powell reaffirmed on Tuesday that the Federal Reserve is in no hurry to cut interest rates, highlighting the uneven nature of recent inflation data. He also noted that price pressures tied to tariffs are likely to emerge in the inflation prints for June or July. His remarks echoed the tone of the June 18 FOMC meeting, where policymakers projected two rate cuts in the second half of the year.

Despite that outlook, market participants remain divided on the exact timing and certainty of the Fed’s next moves. Rate expectations continue to shift in response to incoming data, keeping assets like gold highly reactive.

“If inflationary pressures stay contained,” Powell said, “we’ll get to a point where rate cuts happen sooner rather than later, but I wouldn’t want to point to any specific meeting.” He added that a significant deterioration in labor market conditions would also weigh on the Fed’s decision-making. However, he emphasized that there is no need to rush, stating, “The economy is strong, and the labor market remains resilient.”

This reiterates the Fed’s data-dependent stance, reinforcing the importance of upcoming economic figures for both monetary policy direction and gold’s short-term trajectory.

Boston Fed President Susan Collins echoed Powell’s sentiment, repeating on Tuesday that current policy remains well-positioned, the U.S. economy is solid, and there is room for patience as inflation continues to evolve.

U.S. consumer confidence data released Tuesday added to market uncertainty. The Conference Board’s Consumer Confidence Index fell to 93.0 in June, down from 98.4 in May. A more cautious consumer outlook could imply softer spending ahead, potentially weighing on the Fed’s growth forecasts and influencing the timing of any rate adjustments.

In other economic data, U.S. new home sales dropped by 13.7% in May, falling from 722,000 to 623,000 units. Analysts had expected a smaller decline to 693,000. Elevated 30-year mortgage rates near 7% appear to be discouraging buyers from entering the housing market. Bullish Momentum Could Emerge From Oversold Conditions_1

Bullish Momentum Could Emerge From Oversold Conditions_1

Technical Analysis

Gold has found strong support near the 200-period moving average, currently around 3319. After dipping to 3295, the metal quickly rebounded, forming a local low without extending to new lows. This bounce suggests that bearish momentum may be weakening. If the price manages to close decisively above the 200-period MA, a fresh leg higher could target the 3400 area.

Additionally, the Relative Strength Index (RSI) has dropped to 29 — entering oversold territory. This suggests selling pressure may be fading, with buyers potentially stepping in. Oversold RSI levels often precede trend reversals or short-term rebounds.

If gold fails to print a new local low and closes above the 100-period moving average at 3361, it could confirm a bullish reversal, with a sustained move higher increasingly likely from current levels.

Trading Recommendations

Trading direction: Buy

Entry price: 3331

Target price: 3395

Stop loss: 3280

Validity: Jul 04, 2025 15:00:00

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

EUR/JPY rebounded to trade near 168.80 in early Wednesday trade, retracing prior losses amid resilient bullish sentiment.

BUY EURJPY

Close Time

CLOSED

169.202

Entry Price

172.000

167.800

180.994 +0.121 +0.07%

56.1

Pips

Profit

167.800

169.763

Exit Price

169.202

Entry Price

172.000

The Euro strengthened modestly against the Japanese Yen on Wednesday, with EUR/JPY climbing back toward 168.80 during the European session, as bullish momentum regained footing following a brief pullback. The pair’s ability to bounce back highlights its resilience within a well-defined ascending channel, supported by improving global risk sentiment and diverging central bank trajectories.

The latest price action reflects broader macroeconomic dynamics, where geopolitical de-escalation and central bank positioning continue to play central roles. Despite lingering uncertainties, market participants appear more comfortable rotating back into risk-sensitive trades such as EUR/JPY — with technical indicators reinforcing that the bullish trend remains intact.

The Japanese Yen has remained largely stable in the wake of the Bank of Japan’s (BoJ) Summary of Opinions released earlier this week, which revealed a cautious tone among policymakers. Several board members emphasized the need to maintain current interest rates due to growing concerns over the long-term impact of U.S. tariffs on Japan’s economy.

Although these tariffs have yet to exert material influence, the BoJ warned of a potential deterioration in corporate sentiment, particularly among export-reliant firms. The emphasis on uncertainty highlights the central bank’s preference for patience as it navigates an increasingly complex global landscape — a position that continues to limit upside potential for the Yen, especially against currencies like the Euro.

At the same time, domestic data presents a nuanced picture. Japan’s core inflation surged in May to its highest level in over two years, remaining well above the BoJ’s 2% target and underscoring persistent price pressures. Furthermore, Japan’s latest PMI data surprised to the upside, suggesting robust business activity and leaving the door open for possible rate hikes later this year. Still, until there is clarity on external risks, the BoJ appears reluctant to pivot decisively toward normalization.

Risk sentiment received a notable boost after U.S. President Donald Trump announced a ceasefire between Iran and Israel, easing tensions after nearly two weeks of conflict. The de-escalation has improved investor confidence globally, helping carry risk-on flows back into high-beta assets, including EUR/JPY.

Nevertheless, traders remain cautious. A classified U.S. intelligence report, cited by Reuters, suggested that U.S. strikes on Iranian nuclear facilities have delayed Tehran’s progress by only a few months. Iran’s Foreign Minister Abbas Araghchi also confirmed the continuation of the country’s nuclear program, according to Al Arabiya. As such, the geopolitical risk premium has not been entirely erased, leaving room for renewed volatility.

Meanwhile, on the European front, ECB policymakers have maintained a tone of pragmatic dovishness. Governing Council member François Villeroy de Galhau said in an interview with the Financial Times that the central bank could still consider rate cuts despite volatility in oil markets. Chief Economist Philip Lane echoed the message, emphasizing the need to consider not only the baseline inflation trajectory but also surrounding risks to growth and price stability.

This measured tone from the ECB, while dovish, has not significantly dented the Euro, which remains supported by broadly stable macro fundamentals and a market expectation for only gradual easing — reinforcing EUR strength relative to the Yen.

Technical Analysis

From a technical perspective, EUR/JPY continues to exhibit a bullish bias, with price action unfolding comfortably within a rising channel pattern. After pulling back in the previous session, the pair has found support around the 167.60 level — a critical area that has helped to rebuild positive momentum.

As of the European session, the pair is oscillating near 168.80, showing signs of renewed buying interest as the stochastic oscillator works off overbought levels. The ability to hold above the 9-day EMA at 167.68 reinforces short-term stability, while upside targets remain in view.

The next key resistance zone lies at 169.20, followed by the 11-month high of 169.72 set on June 23. A decisive break above this area would reinforce the bullish momentum and could pave the way for a test of the psychologically significant 170.00 level — a zone that could attract further buying interest and potentially usher in fresh highs for the cross.

On the downside, failure to maintain support at 167.68 could see EUR/JPY drift lower toward the channel base near 166.00. Below that, the 50-day EMA at 164.57 provides a more medium-term floor, though a breach of this zone would likely signal a deeper corrective phase.

TRADE RECOMMENDATION

BUY EURJPY

ENTRY PRICE: 169.20

STOP LOSS: 167.80

TAKE PROFIT: 172.00

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Canadian Dollar weakens against the U.S. Dollar, with USD/CAD trading near 1.3750.

BUY USDCAD

Close Time

CLOSED

1.37400

Entry Price

1.38400

1.36400

1.38171 +0.00024 +0.02%

100.0

Pips

Loss

1.36400

1.36399

Exit Price

1.37400

Entry Price

1.38400

The Canadian Dollar (CAD) is under modest pressure against its U.S. counterpart on Wednesday, with USD/CAD attempting to break higher after a period of tight consolidation. The pair hovered near 1.3750 during early North American trade as investors braced for a dual dose of market-moving catalysts: U.S. New Home Sales data for May and the final day of Federal Reserve Chair Jerome Powell’s semiannual testimony on Capitol Hill.

This cautious upward drift in USD/CAD reflects a broader market tone marked by policy uncertainty and macroeconomic crosswinds. The pair, which had spent several sessions trapped within a narrow range, now appears poised for a potential breakout depending on incoming U.S. data and the Fed’s forward guidance.

One of the day’s key economic releases, U.S. New Home Sales, is due at 14:00 GMT and could offer valuable insight into the state of the American housing market — a sector highly sensitive to interest rate fluctuations and consumer sentiment. Economists expect that 690,000 new single-family homes were sold in May, a slight pullback from the unexpectedly strong 743,000 pace seen in April.

The April surge raised eyebrows, particularly as it coincided with the preemptive acceleration of home purchases ahead of incoming tariff risks. As such, May’s report will be scrutinized not only for headline sales numbers but also for any signs of a potential hangover in activity following April’s spike. A weaker-than-expected print could suggest fading housing momentum and complicate the Fed’s inflation management strategy, while a strong number might reinforce the case for patience on rate cuts.

Even more closely watched will be Fed Chair Jerome Powell’s remarks during his second day of testimony before the Senate Banking Committee. The semiannual Monetary Policy Report hearing concludes Wednesday, with investors keenly focused on Powell’s tone and any deviations from his prior statements to the House Financial Services Committee.

Markets interpreted Tuesday’s appearance as largely balanced, with Powell acknowledging that inflation had moderated but not enough to warrant immediate rate cuts. He reiterated that the Fed would need “greater confidence” that inflation was sustainably moving toward the 2% target before loosening monetary policy. However, the Fed chief also noted that overly restrictive policy could eventually weigh on economic activity and the labor market, leaving the central bank walking a narrow policy tightrope.

For FX markets, Powell’s testimony holds significant implications. Any dovish tilt could reignite risk appetite and weaken the greenback, while a more cautious or hawkish stance could boost the U.S. Dollar and extend the upward bias in USD/CAD.

Technical Analysis

From a technical perspective, USD/CAD is showing signs of a bullish correction after bouncing off key support at 1.3685 — a level that had previously acted as a short-term floor. The pair has since climbed higher, bolstered by positive momentum on the Relative Strength Index (RSI), which emerged from oversold territory and now supports further gains.

The RSI signal — combined with the sustained bounce off horizontal support — reinforces the view that USD/CAD could continue to recover in the near term, especially if upcoming U.S. data surprises to the upside or if Powell leans hawkish in his remarks.

Still, the overall picture remains nuanced. USD/CAD has been trading in a relatively confined range, with resistance levels near 1.3780 and 1.3840 acting as key barriers. A decisive break above these thresholds would likely trigger a new wave of bullish momentum, while failure to sustain gains above 1.3750 could bring sellers back into the fold.

TRADE RECOMMENDATION

BUY USDCAD

ENTRY PRICE: 1.3740

STOP LOSS: 1.3640

TAKE PROFIT: 1.3840

Risk Warnings and Disclaimers

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Eva Chen

Economic

Stocks

Summary:

Following President Trump's declaration of a ceasefire, the conflict between Iran and Israel has ceased, which has driven the U.S. stock market upward on Tuesday. Investors are betting on an end to the war, and the market may continue its bullish trend.

BUY US30

Close Time

CLOSED

43055.97

Entry Price

44149.00

42500.00

48019.44 +19.54 +0.04%

10930.3

Pips

Profit

42500.00

44149.44

Exit Price

43055.97

Entry Price

44149.00

Fundamentals

U.S. stocks experienced a substantial rally on Tuesday, building upon the robust gains observed in the preceding trading session. As the market continued its upward trajectory, major indices reached their highest closing levels in four months.

At the close of trading, key indices retreated from their intraday peaks but maintained significant gains. The Nasdaq Composite surged by 281 points, representing a 1.4% increase, to close at 19,912. The Dow Jones Industrial Average rose by 507 points, a 1.2% gain, closing at 43,089. The S&P 500 advanced by 67.01 points, or 1.1%, to settle at 6,092.

Wall Street's positive performance followed President Trump's announcement of a ceasefire between Israel and Iran.

Trump stated on Truth Social, "Assuming all goes as planned, I would like to congratulate both Israel and Iran for having the tenacity, courage, and intelligence to end this so-called '12-day war.'"

Despite mutual accusations of ceasefire violations, investors appear optimistic about the easing of tensions in the Middle East. Concurrently, investors largely shrugged off comments by Federal Reserve Chairman Powell, who stated that the Federal Reserve would maintain interest rates, notwithstanding pressure from Trump to lower them.

MARKET WATCH: Judging by the volatility of the three major U.S. stock indices, the Dow Jones Industrial Average's continued rise at current levels is sustainable, as the index remains below its two major indices; however, investors lack greater confidence on the "from here" question. Optimistic expectations for corporate earnings in the second half of the year may be excessive, and coupled with multiples near cyclical highs, this will require earnings to exceed expectations.

U.S. Stock Market Achieves a Four-Month New High Following the Conclusion of the "12-day War"_1

Technical Analysis

The Dow Jones Industrial Average is currently trading at 43120, consolidating within a recent sideways range. Technical indicators in the 1D timeframe are mixed, with no clear overbought or oversold signals, suggesting market resilience. Momentum indicators show price testing key SMAs, while volume remains moderate.

From a structural perspective, on the other hand, the index exhibits a head and shoulders bottom pattern, implying a potential continuation of the uptrend.

Overall, the short-term outlook is mixed, while the medium-term favors a bullish bias. A range-bound trading strategy is recommended, utilizing trendlines and SMAs for support and resistance levels to guide position management.

Trading Recommendations

Trading Direction: Buy

Entry Price: 43000

Target Price: 44149

Stop Loss: 42500

Valid Until: July 10, 2025 23:55:00

Support: 42961, 42790, 42708

Resistance: 43202, 43690, 44055

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Euro hovers near its strongest level against the US Dollar since late 2021, supported by falling oil prices and growing Fed rate cut bets.

BUY EURUSD

Close Time

CLOSED

1.16000

Entry Price

1.18000

1.15000

1.16636 +0.00210 +0.18%

107.2

Pips

Profit

1.15000

1.17072

Exit Price

1.16000

Entry Price

1.18000

The Euro is showing remarkable resilience against the US Dollar, holding steady near a more than three-year high as markets digest a shifting global macroeconomic landscape. On Wednesday, the EUR/USD pair traded with marginal losses but remained anchored near the 1.1640 level—territory not seen since November 2021. The pair had surged nearly 1.4% in the previous two sessions, underpinned by a combination of weak US economic data, dovish market expectations for Federal Reserve policy, and easing inflationary pressures in the Eurozone driven by lower energy costs.

While geopolitical tensions between Israel and Iran persist, the current truce appears to be holding for now. This relative calm has fueled a moderate risk-on tone across financial markets, curbing demand for traditional safe havens like the US Dollar and instead propping up risk-sensitive currencies like the Euro.

A significant driver of Euro strength has been the retreat in global oil prices. After spiking on Middle East war risk, crude futures have retreated from last week’s highs and now trade well below recent peaks. Markets seem increasingly convinced that Iranian oil infrastructure—crucial for global supply—remains mostly intact after the recent strikes, and there has been no substantial disruption to shipping through the vital Strait of Hormuz.

This decline in oil prices acts as a tailwind for the Eurozone economy, where imported energy costs are a major inflation driver. Softer oil prices help ease inflationary pressures, which in turn boosts household spending power and improves overall growth prospects in the region. The Euro, often highly sensitive to energy prices due to the bloc's dependence on imports, has responded positively.

Meanwhile, across the Atlantic, sentiment toward the US Dollar remains under pressure. Despite Federal Reserve Chair Jerome Powell’s attempt to project patience in monetary policy during Tuesday’s semiannual testimony to Congress, markets appear increasingly convinced that interest rate cuts are on the horizon—likely as early as September.

Powell reiterated the Fed’s need for “greater confidence” before easing policy, emphasizing that the central bank is not currently rushing toward rate cuts. However, markets have taken a more dovish view, especially following Tuesday’s soft US Consumer Confidence data. The Conference Board’s index fell more than expected in June, with notable declines in the labor market sentiment subcomponents. Growing consumer concern about job security is amplifying expectations that tighter monetary policy is weighing on the real economy.

Further compounding the Dollar’s challenges is the lack of significant upside surprises in recent US economic releases. With inflation slowly cooling and labor market data losing momentum, investors are questioning how long the Fed can maintain its restrictive stance without risking a harder-than-necessary landing.

Looking ahead, Wednesday’s calendar is relatively light, with only US new home sales data for May due. Powell is scheduled to testify again, but traders expect little deviation from his prior remarks. As such, further headlines out of the Middle East may serve as a bigger intraday catalyst for both safe-haven flows and broader risk sentiment.

However, unless the truce between Israel and Iran breaks decisively, the Euro seems poised to benefit from the current market mood and macro positioning. A benign energy price backdrop and diminishing Fed hawkishness form a powerful support base for the common currency, particularly as the ECB has already taken a step toward normalizing monetary policy with a rate cut in June.

Technical Analysis

From a technical standpoint, EUR/USD remains in firmly bullish territory across major timeframes. Price action continues to respect the internal structure of an ascending channel that has guided the pair higher since mid-May. On the daily chart, the pair trades comfortably above the psychologically and technically significant 1.1600 level—a key area that has transitioned from resistance to support.

The pair also remains aligned with both the red trendline and the broader bullish channel (marked in purple), with no significant signs of a trend reversal at this stage. The recent intraday pullbacks have helped alleviate overbought conditions on the Relative Strength Index (RSI), allowing bulls to potentially reload for another leg higher.

Despite the brief correction, the Euro’s ability to stay above 1.1600 reinforces the dominance of the bullish trend. As long as EUR/USD continues to trade within its ascending structure and macro fundamentals favor Euro strength, traders may look for opportunities to build long positions on dips.

TRADE RECOMMENDATION

BUY EURUSD

ENTRY PRICE: 1.1600

STOP LOSS: 1.1500

TAKE PROFIT: 1.1800

Risk Warnings and Disclaimers

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Alan

Commodity

Summary:

Recently, Israel and Iran reached a ceasefire agreement, causing the market’s risk-aversion sentiment to ebb and consequently pushing down gold prices. However, the conflict between the two countries may not have come to a complete end, and there is still potential for gold prices to rise.

SELL XAUUSD

Close Time

CLOSED

3323.73

Entry Price

3250.00

3370.00

4217.40 +19.49 +0.46%

493.9

Pips

Profit

3250.00

3274.34

Exit Price

3323.73

Entry Price

3370.00

Fundamentals

The recent phased easing of the Middle East situation has directly triggered the decline in gold prices. Israel and Iran, with Trump’s mediation, reached a ceasefire agreement, and both sides have resumed the opening of their airspace. Iran’s foreign minister explicitly stated a “willingness to resolve differences through negotiations,” and the risk of the Strait of Hormuz being blockaded has significantly diminished. The risk premium on gold, which had been inflated by geopolitical conflicts, was quickly reversed, with gold prices plummeting by 46.06 dollars in a single day yesterday. As a result, funds have accelerated their exit from gold, shifting towards risk assets such as the stock market.

Meanwhile, the Federal Reserve’s wait-and-see stance on monetary policy has further suppressed gold prices. Powell emphasized at the congressional hearing the need for more time to assess the impact of tariffs on inflation and hinted at a reduced likelihood of interest rate cuts before September. The market’s expectation for a rate cut in July has plummeted from 35% to 12%, and the US dollar index has stabilized above 98.00, diminishing the appeal of gold, a non-interest-bearing asset.

It is important to note that, despite the ceasefire agreement between Iran and Israel, there is still the possibility of renewed conflict between the two countries. Should the conflict flare up again, gold prices could once again find support and rise.

Technical Analysis

From the 4-hour chart perspective, the short-term upward trend line of gold has already been breached. The likelihood of a short-term trend reversal to the downside is gradually increasing. Moreover, the MA20 crossing below the MA60 and MA144 to form a “death cross” has further heightened the probability of a short-term decline in gold prices.

Currently, gold prices rebounded after falling to the support level near 3292.00 yesterday. Today, the rebound has continued, but in the short term, there is a resistance level at 3350.00 above. If gold prices weaken under this resistance level, they may once again test the support level at 3292.00. Should this support level be breached, the downside space for gold prices will be opened up, with the next target potentially falling to around 3245.00.