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Author: The Forex Feed
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Markets Enter High-Risk Phase as Geopolitical and Trade Risks Collide
Global Financial markets have endured months of turmoil, with overlapping concerns over the US debt downgrade, recession fears, and an intensifying global trade war. The sharp escalation in Middle East conflict last week has only deepened the anxiety, as Israel and Iran exchanged strikes, raising the specter of prolonged regional instability.
With the 90-day reciprocal tariff truce also nearing its expiration, the weeks ahead look increasingly fraught. For investors, the challenge is no longer just about navigating volatility, but about reassessing whether the overstretch rebound in US equities since April has run its course.
In the currency markets, the week’s performance map clearly reflected a risk-off tone. Swiss Franc stood out as the top performer, benefiting from its traditional safe haven appeal.
Euro also gained significantly, supported not only by its status as the most liquid and stable Dollar alternative, but also by growing sentiment that ECB is near the end of its easing cycle. While a recalibration cut might still be delivered later in the year, markets increasingly believe that the bulk of rate reductions is behind us.
Canadian Dollar rounded out the top three, supported not by domestic strength but by a sharp rally in oil prices amid fears of supply disruption in the Middle East.
On the flip side, Aussie was the week’s worst performer, weighed by its sensitivity to global risk sentiment. Dollar fared little better, finishing second worst despite a bounce late in the week as traders tentatively reconsidered its geopolitical hedge appeal. Kiwi also landed among the bottom performers.
Sterling ended in the middle of the pack but underperformed its European peers, dragged down by weak UK jobs and GDP data that reinforced expectations for BoE rate cut in August (not the upcoming meeting.. Meanwhile, the Japanese Yen also finished mid-table, with markets becoming less convinced that BoJ will tighten policy again this year.
Middle East Escalation Overshadows Market Worries
The sharp escalation in the Middle East conflict has rapidly overtaken other key market concerns—including trade war, US fiscal uncertainty, and recession risks—and is now the dominant driver of global sentiment.
Israel’s largest-ever airstrike on Iranian ballistic missile infrastructure and senior military leaders, followed by Iran’s retaliatory attacks on Israeli cities, marks a dangerous turning point in the regional conflict. What was initially feared as a one-off strike now could quickly become the start of a drawn-out military campaign.
The geopolitical risk premium surged in tandem with crude oil prices, which on Friday posted their largest intraday gains since Russia’s invasion of Ukraine in 2022. Traders began pricing in the risks of serious supply disruptions. Markets are growing increasingly concerned that the conflict could evolve into a broader regional war, possibly threatening key energy infrastructure and shipping routes. The nuclear talks previously scheduled between the US and Iran in Oman now seem moot, with diplomacy giving way to open confrontation.
Oil markets are particularly sensitive to any disruption in Iranian supply. Iran currently produces around 3.3 million barrels per day and exports over 2 million bpd of crude and refined products. Any damage to this output would not only tighten global supply but also stretch the remaining spare capacity from other producers, capacity that might be insufficient to cushion further geopolitical or natural shocks.
A worst-case scenario would involve Iran targeting the Strait of Hormuz, neighboring oil-producing states, or even US military installations. The implications of such actions would be severe. While the US has publicly stated it is not involved in the current Israeli operation, any direct attack on American assets could force a shift in US posture.
Technically, for the near term, 74.65/78.08 resistance zone (161.8% projection of 55.63 to 64.60 from 60.14. at 74.65 and 200% projection at 78.08) is still likely to limit WTI oil price, with help from overbought condition in 4H MACD.
However, decisive break of 78.08 will add to the case that 55.20 was already a long term bottom. Rebound from there would target 38.2% retracement of 131.81 (2022 high) to 55.20 (2025 low) at 84.46, even still as a corrective move.
Oil Shock Threatens Fed Cut Bets as Inflation Risks Return and Tariff Clock Ticks
The surge in oil prices somewhat revived fears of energy-driven inflation—just as investors were gaining confidence that the Fed could begin cutting rates later this year.
Last week’s downside surprises in both US CPI and PPI reports had strengthened that belief, suggesting that new tariffs imposed earlier this year had yet to filter into upstream or downstream prices. Fed fund futures quickly priced in a more than 70% probability of a September rate cut.
However, the oil shock complicates this narrative, If headline inflation picks up again on energy. In this context, monetary policy may be forced to stay tighter for longer than markets currently anticipate.
Adding to the uncertainty is the looming expiration of the 90-day reciprocal tariff truce in early July. While Treasury Secretary Scott Bessent floated the idea of extending negotiations for “good faith” trading partners, President Donald Trump took a more aggressive stance. He dismissed the need for any delay and signaled that countries would soon receive formal notice of new tariff arrangements—implying a return to unilateral trade policy. The conflicting signals within the administration only amplify the sense of unpredictability for businesses and markets alike.
The intersection of a hawkish tariff stance and resurgent oil prices represents a twin risk scenario that could destabilize expectations across bonds, equities, and currencies. With Fed facing conflicting signals—cooling core inflation versus rising headline risks—the central bank’s room to maneuver may shrink in the months ahead. Investors hoping for a smooth transition to rate cuts may find the coming period more volatile than hoped.
Technically, warning signs are already flashing in equity markets. A bearish divergence is starting to emerge in the D MACD of DOW. Friday’s steep -769 point decline strongly suggests that a short-term top may have formed at 43115.69.
Firm break of 41352.09 will bring deeper fall to 38.2% retracement of 36611.78 to 43115.69 at 40631.20 at least, even still as a corrective move.
Looking ahead, if 40631.20 fails to hold, it would raise the likelihood that the broader medium-term corrective pattern from 45073.63 (2024 high) is still unfolding. In such a case, the index could be at risk of revisiting the bottom of that range near 36611.78.
Dollar Finds a Lifeline in Geopolitical Risk, But Downtrend Still in Play
Dollar Index saw a volatile week, initially plunging as softer-than-expected US CPI and PPI data solidified market expectations for a Fed rate cut in September. While the inflation-driven downside pressure dominated early in the week, risk aversion linked to escalating geopolitical tensions between Israel and Iran helped the greenback stage a late recovery. Even so, Dollar still ended as the second worst-performing major, only narrowly outperforming Aussie.
For months, Dollar struggled to find consistent support. Tariff developments, rising inflation, and even climbing Treasury yields failed to lift the greenback, as each came with offsetting factors. In particular, bond selloffs triggered concerns about global diversification away from US assets. Recession-driven risk aversion didn’t help either. But the current geopolitical flare-up in the Middle East, particularly the potential for a drawn-out Israel-Iran conflict, may finally offer Dollar a clearer haven bid—at least in the short term.
Technically, however, Dollar Index remains under pressure. As long 99.39 resistance holds, further decline is favored. That said, downside momentum might start to slow as it approaches 61.8% projection of 110.17 to 97.92 from 101.97 at 94.40. On the upside, break of 99.39 resistance will suggest short term bottoming, and bring stronger rebound back to 55 D EMA (now at 100.45), and possibly further to 101.97 resistance.
EUR/AUD Weekly Outlook
EUR/AUD’s rebound from 1.7245 resumed last week but lost some momentum after hitting 1.7880. Initial bias is turned neutral this week first. Overall development suggests that fall from 1.8554 has completed as a corrective move. Further rise is expected as long as 1.7459 support holds. Above 1.7880 will target 61.8% retracement of 1.8554 to 1.7245 at 1.8054. Firm break there will pave the way to 1.8554.
In the bigger picture, with 55 W MACD staying well below signal line, 1.8554 is likely a medium term top already. Price actions from there are seen as a corrective pattern only. While deeper pullback might be seen, downside should be contained by 38.2% retracement of 1.4281 (2022 low) to 1.8554 at 1.6922 to bring rebound. Up trend from 1.4281 is still expected to resume at a later stage.
In the longer term picture, rise from 1.4281 is seen as the second leg of the pattern from 1.9799 (2020 high), which is part of the pattern from 2.1127 (2008 high). As long as 55 M EMA (now at 1.6303) holds, this second leg could still extend higher.
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Posts weekly loss, despite Friday rebound to 0.8100
- USD/CHF closes Friday up 0.04%, but logs 1.37% weekly drop to 1-month low at 0.8054.
- Bearish structure persists: lower highs/lows and weak RSI signal continued downside momentum.
- Key support lies at 0.8054 and 0.8038; breach may expose psychological 0.8000 level.
- Bulls need a break above 0.8147 to challenge 0.8200 and the 50-day SMA near 0.8257.
The USD/CHF ended Friday’s session with gains of over 0.04%, but in the week fell over 1.37% to a one-month low of 0.8054. At the time of writing, the pair trades at 0.8104 due to increased demand for the Dollar amid risk aversion.
USD/CHF Price Forecast: Technical outlook
The USD/CHF is bearishly biased due to its price action pattern of successively lower highs and lower lows, indicating that sellers are in control. Additionally, the Relative Strength Index (RSI) registered a lower low, indicating bearish territory. That said, the path of least resistance is tilted to the downside.
If the USD/CHF drops below 0.8100, the next support level would be the June 13 low of 0.8054. On further weakness, the pair fall could extend to 0.8038, ahead of the 0.8000 figure.
On the upside, a decisive break of the June 13 high of 0.8147 can open the door to test 0.82, followed by the 50-day Simple Moving Average (SMA) at 0.8057.
USD/CHF Price Chart – Daily
Swiss Franc PRICE This week
The table below shows the percentage change of Swiss Franc (CHF) against listed major currencies this week. Swiss Franc was the strongest against the Australian Dollar.
USD EUR GBP JPY CAD AUD NZD CHF USD -1.33% -0.29% -0.52% -0.82% 0.15% 0.09% -1.29% EUR 1.33% 1.00% 0.82% 0.51% 1.53% 1.36% 0.04% GBP 0.29% -1.00% -0.10% -0.49% 0.53% 0.38% -0.91% JPY 0.52% -0.82% 0.10% -0.30% 0.63% 0.50% -0.84% CAD 0.82% -0.51% 0.49% 0.30% 0.86% 0.84% -0.46% AUD -0.15% -1.53% -0.53% -0.63% -0.86% -0.18% -1.43% NZD -0.09% -1.36% -0.38% -0.50% -0.84% 0.18% -1.24% CHF 1.29% -0.04% 0.91% 0.84% 0.46% 1.43% 1.24% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Swiss Franc from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CHF (base)/USD (quote).
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Forexlive Americas FX news wrap 13 Jun: Markets are in flux as Israel and Iran lob bombs
The U.S. dollar moved higher overnight (and coming into the US session), driven by classic flight-to-safety flows following Israel’s strike on Iran. However, U.S. yields did not follow the usual script—instead of falling amid geopolitical stress, they moved higher.
This divergence from the typical Pavlovian response raises questions. It may reflect rising oil prices and the renewed threat of inflation, which can put upward pressure on yields. Alternatively, it could be a technical retracement, with yields rebounding after recently dipping below key benchmarks—4% for the 2-year, 4.5% for the 10-year, and 5% for the 30-year—that had served as rough markers for the yield curve in recent weeks.
Or perhaps it’s something broader: investor fatigue with the constant swings in policy tone from the Trump administration and escalating global tensions. Whatever the reason, markets are behaving less predictably—adding another layer of complexity for traders and policymakers alike.
Regardless of the reason, today yields moved higher.
Looking at the near-closing levels in the US debt market:
- 2 year yield 3.952%, +4.6 basis points.
- 5-year yield 4.008%, +4.9 basis points
- 10 year yield 4.408%, +5.2 basis points.
- 30 year yield 4.901%, +5.9 basis points
The U.S. dollar initially rose on the back of flight-to-safety flows, but those gains began to fade as the day progressed. While the greenback is still closing higher against all major currency pairs, it has pulled back significantly from its intraday highs.
Despite the late-day retracement, a look at end-of-day levels shows the dollar posted gains across the board, finishing stronger versus each of the major currencies.
- EUR 0.38%
- GBP 0.39%
- JPY +0.39%
- CHF +0.15%
- CAD +0.06%
- AUD +0.72%
- NZD +0.96%
For the trading week, although the USD was higher for the day, it was lower for the week:
- EUR -1.79%
- GBP -0.26%
- JPY -0.53%
- CHF -1.26%
- CAD -0.70%
- AUD unchanged
- NZD -0.06%
US stocks fell in trading today and that helped to push the major indices negative for the week:
- Dow -1.79% for the day and -1.32% for the week
- S&P -1.13% for the day and -0.39% for the week.
- NASDAQ index -1.30% for the day and -0.63% of Week.
Looking ahead, geopolitical tensions between Israel and Iran are expected to keep markets on edge, fueling ongoing uncertainty. At the same time, a packed central bank calendar will shape the direction of global monetary policy, with the Federal Reserve taking center stage on Wednesday.
While the Fed is widely expected to keep rates unchanged, the market’s attention will be firmly on the policy statement, economic projections, and the dot plot outlining future rate expectations. This comes on the heels of cooler-than-expected inflation data, which has eased some pressure. However, the potential inflationary impact of tariffs remains a concern, as does the risk of softening labor markets.
Other key central banks will also be in the spotlight. The Bank of Japan will announce its decision on Tuesday—no change is expected as policymakers remain firmly dovish. On Thursday, the Bank of England is also expected to hold rates steady, while the Swiss National Bank is anticipated to deliver a 25 basis point rate cut, potentially lowering its policy rate to 0.00%.
Beyond central banks, the economic calendar is also active, featuring U.S. retail sales, Australian employment figures, and the latest reading on UK GDP—all of which could provide further insight into the global growth outlook.
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USD/JPY recovers as BoJ’s hawkish tone softens
- USD/JPY trades above 144.00 as safe-haven flows boost the US Dollar amid rising Middle East tensions.
- BoJ is expected to hold rates steady, limiting support for the Yen despite earlier hawkish signals from Governor Ueda.
- Japan and the US prepare to meet at the G7 summit in Canada, where the two nations are expected to discuss bilateral relations and negotiate over tariffs.
The Japanese Yen (JPY) is trading weaker against the US Dollar (USD) on Friday, as geopolitical tensions and central bank policy divergence drive market flows.
USD/JPY has staged a modest rebound, trading above 144.00 at the time of writing, as demand for the safe-haven US Dollar picks up.
Reports of Israeli strikes on Iranian nuclear facilities have lifted geopolitical risk, supporting the USD and weighing on the Yen.
Meanwhile, expectations that the Bank of Japan (BoJ) will leave interest rates unchanged at its upcoming meeting on Tuesday have further limited JPY gains.
While BoJ Governor Kazuo Ueda previously signaled the possibility of a rate hike in response to rising domestic inflation, recent economic data suggest Japan’s recovery remains fragile. Industrial production has slowed, and Japan’s export-sensitive manufacturing sector is struggling under the pressure of steep US tariffs on steel, aluminium, and automobiles, key contributors to Japan’s Gross Domestic Product (GDP).
The University of Michigan released its preliminary Consumer Sentiment survey for the United States on Friday, indicating a noticeable increase in confidence among US households.
Meanwhile, both the one-year and five-year Consumer Inflation Expectations indices edged lower, with the one-year outlook falling to 5.1% from 6.6% and the five-year outlook decreasing to 4.1% from 4.2%. This echoed the softer-than-expected readings of the Consumer Price Index (CPI) and Producer Price Index (PPI) reports earlier in the week, which have raised expectations of a rate cut by the Federal Reserve in September.
However, with the Fed widely expected to hold rates steady in both June and July, and the BoJ showing little urgency to tighten further, current interest rate differentials remain supportive of USD/JPY upside in the near term.
USD/JPY technical analysis – Daily chart
USD/JPY is trading near 144.14 on Friday, sitting just below the 23.6% Fibonacci retracement of the January–April decline at 144.37.
The pair continues to coil within a symmetrical triangle, defined by a descending trendline from the January high at 158.88 and rising support from the April 2025 low at 139.89.
Both the 20-day (143.96) and 50-day (144.14) Simple Moving Averages (SMA) are converging near current levels, highlighting indecision and the potential for a breakout. A daily close above the triangle resistance and 144.37 could expose the 147.14 level (38.2% Fibonacci retracement) and 149.38 (50% Fibonacci retracement).
On the downside, a break below 143.00 would increase pressure toward the 141.00 handle and the April low. The Relative Strength Index (RSI) is neutral at 49, indicating a lack of strong momentum in either direction; however, price compression suggests that a larger directional move may be building.
USD/JPY daily chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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Citadel Securities’ head of electronic FX departs
Kevin Kimmel, the global head of electronic foreign exchange at Citadel Securities, has left the firm, according to sources familiar with the matter.
Kimmel leaves after 11 years at Citadel. Most recently, he ran the firm’s currency trading business, which ranks as a top three market maker across major spot and futures venues. Kimmel was based in New York.
Risk.net understands Kimmel left for personal reasons. A successor is yet to be announced.
As head of Citadel’s electronic FX business, Kimmel
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Gold surges past $3,400 on Israel-Iran war risk, soft US inflation boosts safe-haven demand
- Bullion rallies to five-week high amid geopolitical tension and dovish Fed outlook
- Israel strikes Iran, fueling fears of broader war and driving flight to safety into Gold.
- XAU/USD hits $3,446 before easing on profit-taking; eyes next week’s Fed decision and US data slate.
Gold price rallied for the third consecutive day after the Israel-Iran conflict erupted on Friday, triggering a risk-off mood in financial markets as fears that it could escalate loom. At the time of writing, XAU/USD trades at $3,422, up more than 1%.
Several factors underpin bullion. On Friday, Israel’s attack on Iran’s military installations, nuclear facilities and senior officials augmented tension in the area. After the attack, XAU/USD reached a five-week high of $3,446 before retreating somewhat to its current levels as traders booked profits ahead of the weekend.
Softer US CPI and PPI strengthen bets on Fed rate cuts despite improving consumer sentiment
Another factor was that inflation in the United States (US) continued to ease following the release of the Consumer Price Index (CPI) and the Producer Price Index (PPI) figures for May. Recently, a University of Michigan (UoM) Consumer Sentiment survey revealed that households are becoming more optimistic about the economy, yet they remain worried about higher prices.
US President Donald Trump hinted that Iran brought the attack on itself, as Washington warned Iran to restrict its nuclear program.
Next week, traders will be watching the release of the Federal Reserve’s (Fed) monetary policy meeting, where officials will update their economic projections. Besides this, Retail Sales, Industrial Production, housing and jobs data could help dictate Gold’s direction.
Daily digest market movers: Gold price surges on risk aversion
- Recently, US President Trump said to Axios that Israel’s attack could help him reach an agreement with Iran. He urged Iran to make a deal, adding, “There has already been great death and destruction, but there is still time to make this slaughter, with the next already planned attacks being even more brutal, come to an end.”
- The University of Michigan (UoM) Consumer Sentiment report in June showed that households are becoming more optimistic about the economy. The Sentiment Index rose from 52.2 to 60.5, while inflation expectations decreased for both one-year and five-year periods, from 6.6% to 5.1% and from 4.2% to 4.1%, respectively.
- Although the data is positive and clears the path for the Federal Reserve to ease policy, the escalation of the Middle East conflict pushed Oil prices up by more than 6%. This suggests that Gasoline prices could increase, and that a reacceleration of inflation looms.
- US Treasury yields are recovering, with the US 10-year Treasury yield climbing over seven basis points (bps) to 4.436%. US real yields followed suit, rising seven basis points to 2.186%, capping Bullion’s advance.
- The Greenback rises after hitting three-year lows, according to the US Dollar Index (DXY). The DXY, which tracks the value of the Dollar against a basket of peers, is up 0.30% at 98.15 after hitting a multi-year low of 97.60.
- Goldman Sachs reiterated that the price of Bullion would rise to $3,700 by the end of 2025 and $4,000 by mid-2026. Bank of America (BofA) sees Gold at $4,000 over the next 12 months.
- Money markets suggest that traders are pricing in 47 basis points of easing toward the end of the year, according to Prime Market Terminal data.
Source: Prime Market Terminal
XAU/USD technical outlook: Gold price consolidates near $3,400
Gold price is set to extend its gains past the $3,450 figure, clearing the path to challenge the record high of $3,500 in the near term. The Relative Strength Index (RSI) shows that momentum remains bullishly biased, and with that in mind, the path of least resistance is tilted to the upside.
Conversely, if XAU/USD tumbles below $3,450, the first support would be the $3,400 mark. If it surpasses, the next stop would be the 50-day Simple Moving Average (SMA) at $3,281, ahead of the April 3 high-turned-support at $3,167.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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Dow Jones Recovers 400 Points from Lows, Downside Risks Remain
- Dow Jones recovers 400 points from daily low.
- Middle East tensions impacting market sentiment.
- Defense stocks rise, airlines stocks fall.
- Markets could face gaps over the weekend.
Read More: Oil Surges 10%, Gold Above $3400/oz as Israel Strikes Iran
The Dow Jones Index has recovered around 400 points from its daily low as markets shrug of initial fears of a wider Middle East conflict. There are a lot of conflicting reports circulating online about the attack on Iran overnight as Israel appears to have easy access to Iranian airspace. These developments as well as bullish comments from US President Trump about Israels rights to defend itself and that the US would provide aid in the case of an Iranian response appear to have led to a slight improvement in sentiment.
Markets appear to be of the belief that a significant Iranian response may not be forthcoming given the scope of the Israeli offensive which has led to the death of many Commanders of the IRGC as well damage to ballistic missile launchers and the Iranian air defense system.
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The recent recovery is widespread with the Nasdaq leading the way. The Nasdaq 100 is now trading down around 0.3% on the day also up nearly 400 points from its daily low.
Airline stocks fell as rising fuel costs could spike if supply issues arise. Delta Air Lines dropped 3.7%, United Airlines fell 4.4%, and American Airlines slid 4.7%.
Meanwhile, defense stocks rose, with Lockheed Martin, RTX Corporation, and Northrop Grumman gaining between 2.2% and 3.2%.
The recovery in the Dow has been held back somewhat by card issuers Visa and American Express which have come under pressure after a report by the WSJ that Walmart WMT.N, Amazon AMZN.O and Expedia Group EXPE.O are among companies exploring their own stablecoins.
Supporters argue these systems could remove the need for middlemen like Visa and Mastercard, which collect billions in fees annually. Visa did not respond to a request for comment when asked.
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President Trump Tells Axios "Israel's attack could help me make a deal with Iran"
US President Donald Trump has been vocal over the last few hours on Israels attack on Iran. This comes after the White House issued a statement by Secretary of State Marco Rubio last night denying US involvement.
However, over the course off the day various reports have comes out quoting Israeli officials stating that the US knew about the attacks, while the initial Iranian response which consisted of mainly drones was neutralized with the help of the US and Gulf allies who shot down drones over their territory.
Navigating Markets Ahead of the Weekend and Beyond
As things stand, the situation remains fluid with Iran at the moment seemingly against the ropes. There are huge questions about whether Iran has been incapacitated by the Israeli strikes which continue. The most recent reports of the IDF bombing the Fordow nuclear plant and other parts of Tehran with no real Iranian resistance thus far.
There has also been growing murmurs that the strikes may lead to a potential regime change, something Israel and the US have been touting for years.
If Iran are unable to retaliate significantly market risk could continue to subside, however if there are signs that a prolonged battle is just getting started, wild swings and gaps over the weekend could materialize.
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Technical Analysis – Dow Jones Index
From a technical standpoint, the Dow Index is printing lower highs and lower lows since the high on June 11, around 43132.
Markets were already cautious ahead of last nights developments in the Middle East which sent sentiment tumbling.
The recovery could be down to a host of factors which include the idea that the worst may be behind markets in regard to the strikes on Iran as well as potential profit taking before the weekend.
Either way, the probability of gaps when the market opens on Sunday remains high and could lead to some volatile price action ahead of the market close today.
Immediate support rests at 42336, 42160 and 42000.
Immediate resistance rests at 42512, 42653 and 42764.
Dow Jones H4 Chart, June 13, 2025
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x-init=”$watch(‘imgModal’, value => initPanzoom())”
class=”flex justify-center “>Source: TradingView (click to enlarge)
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Geopolitical Escalation Fuels Risk Aversion; Dollar Still Lags Despite Bounce
Risk aversion dominates global markets today as geopolitical tensions in the Middle East intensify, though the broader equity selloff has remained contained so far. The trigger came early Friday when Israel launched a series of airstrikes deep into Iranian territory, targeting key military and nuclear infrastructure. In response, Iran retaliated with a wave of drone attacks aimed at Israel—estimated at around 100 drones. The development marked a sharp escalation in hostilities that took markets by surprise. While the US has so far distanced itself from the conflict, analysts have warned that any Iranian attack on American bases could pull Washington into the war, an outcome that would significantly raise the stakes for global markets.
In currency markets, risk-sensitive assets are bearing the brunt of the shift in sentiment. Aussie and Kiwi have fallen to the bottom of the weekly performance board, weighed down by geopolitical fear and, in the Kiwi’s case, a sharp deterioration in domestic manufacturing activity too. Dollar has managed to rebound modestly today, but remains the third worst-performing major for the week. Earlier inflation data, both CPI and PPI, came in softer than expected, reinforcing expectations for a Fed rate cut in September and limiting the Dollar’s momentum.
Swiss Franc stands out as the strongest performer for the week, benefiting from traditional safe-haven demand amid heightened geopolitical uncertainty. Euro has also held firm, underpinned by a steady flow of ECB commentary indicating that the easing cycle is nearing its end. Loonie ranks third, supported by surging oil prices. Yen and Sterling are trading in the middle of the pack. The Yen, despite an early jump, has given back gains as safe-haven flows rotate toward the Franc.
In Europe, at the time of writing, FTSE is down -0.02%. DAX is down -1.08%. CAC is down -0.78%. UK 10-year yield is up 0.042 at 4.524. Germany 10-year yield is up 0.016 at 2.500. Earlier in Asia, Nikkei fell -0.89%. Hong Kong HSI fell -0.59%. China Shanghai SSE fell -0.75%. Singapore Strait Times fell -0.27%. Japan 10-year JGB yield fell -0.058 to 1.402.
Eurozone industrial production down -2.4% mom in April, broad-based weakness
Eurozone industrial production dropped sharply by -2.4% mom in April, significantly below expectations of a -1.6% decline. Output fell in all major categories, with non-durable consumer goods posting the steepest drop at -3.0%. Capital goods, energy (-1.1%), and intermediate goods (-0.7%) also contracted. Durable consumer goods saw a modest -0.2% fall, offering little relief in an otherwise dismal report.
At the EU level, industrial output slipped -1.8% mom, driven by steep declines in Ireland (-15.2%), Malta (-6.2%), and Lithuania (-3.0%). While a few economies such as Denmark (+3.5%) and Luxembourg (+3.2%) managed modest gains, the regional picture remains weak.
EU exports drop -1.9% yoy in April as shipments to China plunge -15.9% yoy
Eurozone trade data for April showed signs of weakening external demand, with goods exports falling -1.4% yoy to EUR 243.0B, while imports edged up 0.1% yoy to EUR 233.1B. Despite the drop in exports, the region maintained a trade surplus of EUR 9.9B, helped by subdued import growth. Intra-Eurozone trade also declined, down -2.0% yoy to EUR 217.3B.
Across the broader European Union, the trade picture reflected similar pressures. EU exports dropped -1.9% yoy to EUR 218.2B, while imports increased 0.5% yoy to EUR 210.7B, yielding a surplus of EUR 7.4B. Intra-EU trade fell -1.7% yoy to EUR 341.9B.
While exports to the US remained a bright spot, rising 3.8% yoy, exports to China plunged -15.9% yoy. On the import side, EU purchases from China rose 8.4% yoy. Imports from the U.S. rose modestly by 2.4% yoy.
NZ BNZ manufacturing fall to 47.5, slumps back into contraction
New Zealand’s manufacturing sector slipped sharply back into contraction in May, with the BusinessNZ Performance of Manufacturing Index plunging from 53.3 to 47.5. The reading not only marks a decisive reversal from April’s expansion but also sits well below the historical average of 52.5.
Key components of the index showed broad-based weakness: production dropped from 53.0 to 48.7, employment tumbled from 54.6 to 45.7, and new orders fell sharply from 50.8 to 45.3—all signaling deteriorating activity across the sector.
The sharp decline was echoed in business sentiment, with 64.5% of survey respondents offering negative comments—up from 58% in April. The commentary reflects a growing sense of pessimism as manufacturers grapple with falling demand, weak forward orders, and subdued consumer spending. Rising input costs, ongoing economic uncertainty, and stalled investment plans are compounding pressures.
BNZ’s Senior Economist Doug Steel said that “the New Zealand economy can claw its way forward over the course of 2025, but the PMI is yet another indicator that suggests an increased risk that the bounce in GDP reported for Q4, 2024 and Q1, 2025 could come to a grinding halt”.
EUR/USD Mid-Day Outlook
Daily Pivots: (S1) 1.1503; (P) 1.1567; (R1) 1.1649; More…
Intraday bias in EUR/USD remains neutral and more consolidations could be seen below 1.1630 temporary top. . Further rally is expected as long as 1.1372 support holds. Above 1.1630 will resume the rally from 1.0176 to 61.8% projection of 1.0176 to 1.1572 from 1.1064 at 1.1927. However, break of 1.1372 support will indicate short term topping, and turn bias to the downside for deeper pullback.
In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 1.1604 support holds.
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US stocks are set to open lower on the Middle East tension
The major US indices are set to open lower after Israelis strikes against Iran’s nuclear facilities and nuclear scientists and military leaders. Iran in a letter to the UN. Counsel said that they will respond decisively and proportionally to the attacks.
In premarket trading, the futures are employing lower levels for the major indices. Currently,
- Dow industrial average -472 points
- S&P index -61 points
- NASDAQ index -292 point
So far the US has not been involved, but stands by Israel.
Pres. Trump on Truth Social said:
He also posted:
US yields remain higher with a two year up 3.5 basis points at 3.941% while the 10 year yield is trading up 3.0 basis points to 4.386%. There is no flight to safety flows into US debt instruments.
Crude oil is sharply higher with the price up $4.09 at $72.91. Gold is now up $55 or 1.62% at $3440. Bank of America sees path for goal to rally to $4000. Flow funds is heading into commodities.
Later this year,
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investingLive.com, a new destination for intelligent market updates and smarter
decision-making for investors and traders alike. -
XAU/USD: Elliott wave analysis and forecast for 13.06.25 – 20.06.25
The article covers the following subjects:
Major Takeaways
- Main scenario: Consider long positions from corrections above the level of 3291.20 with a target of 3600.00 – 3800.00. A buy signal: the price holds above 3291.20. Stop Loss: below 3255.00, Take Profit: 3600.00 – 3800.00.
- Alternative scenario: breakout and consolidation below the level of 3291.20 will allow the pair to continue declining to the levels of 3114.27 – 2950.00. A sell signal: the level of 3291.20 is broken to the downside. Stop Loss: above 3325, Take Profit: 3114.27 – 2950.00.
Main scenario
Consider long positions from corrections above the level of 3291.20 with a target of 3600.00 – 3800.00.
Alternative scenario
Breakout and consolidation below the level of 3291.20 will allow the pair to continue declining to the levels of 3114.27 – 2950.00.
Analysis
The fifth ascending wave of larger degree 5 is presumably developing on the weekly chart, with wave (3) of 5 forming as its part. The third wave of smaller degree 3 of (3) appears to continue forming on the daily chart, with wave iii of 3 completed as its part. On the H4 chart, a correction finished developing as wave iv of 3 and wave v of 3 is in progress. Within it, wave (iii) of v started unfolding. If the presumption is correct, XAU/USD will continue to rise to the levels of 3600.00 – 3800.00. The level of 3291.20 is critical in this scenario as a breakout will enable the pair to continue falling to the levels of 3114.27 – 2950.00.
This forecast is based on the Elliott Wave Theory. When developing trading strategies, it is essential to consider fundamental factors, as the market situation can change at any time.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance broker. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2014/65/EU.
According to copyright law, this article is considered intellectual property, which includes a prohibition on copying and distributing it without consent. -
Berkeley Group Results Preview: Navigating Recovery Amid Policy Shifts
Berkeley Group maintains guidance amid market uncertainty
As Berkeley Group prepares to release its full-year results on 20 June 2025, investors and analysts are closely monitoring the broader UK housebuilding sector. The industry is experiencing a cautious recovery, influenced by government initiatives, evolving market conditions, and company-specific strategies.
Berkeley has reaffirmed its guidance, projecting a pre-tax profit of at least £525 million for fiscal year 2025 (FY25) and £450 million for fiscal year 2026 (FY26). The company has secured a significant portion of its FY25 earnings through exchanged sales contracts, demonstrating resilience amid market fluctuations.
This guidance maintenance provides stability for investors concerned about the broader challenges facing the housebuilding sector, with Berkeley’s focus on high-value London and South East developments providing some insulation from wider market volatility.
The decline in projected profits from £525 million to £450 million between FY25 and FY26 reflects the challenging market conditions and regulatory pressures expected to continue affecting the sector over the medium term.
”Berkeley 2035″ strategy focuses on long-term value creation
The group’s “Berkeley 2035” strategy emphasises long-term value creation, focusing on high-quality developments in London and the South East. Berkeley has expressed optimism regarding the UK government’s planning reforms, which aim to streamline the approval process for new housing projects.
However, the company has also highlighted challenges, including the impact of new regulatory measures such as the building safety levy, which could affect project delivery timelines and costs.
The London and South East focus remains central to Berkeley’s competitive positioning, with these markets typically offering higher margins and more resilient demand compared to other regions, though they also face greater regulatory scrutiny and affordability challenges.
Planning reform optimism suggests that Berkeley sees potential for improved project delivery timelines and reduced development costs if government initiatives successfully streamline the approval process for new housing developments.
Government initiatives support sector recovery
The UK housebuilding sector is showing signs of recovery, supported by government policies and market trends. Chancellor Rachel Reeves announced a £39 billion investment in affordable housing over the next decade, aiming to address the housing shortage and stimulate construction activity.
House prices have seen a modest increase, with annual growth at 3.5% as of April 2025, indicating a stabilising market after the volatility of recent years. This price stability provides a more predictable environment for housebuilders to plan development programmes and pricing strategies.
The substantial government investment in affordable housing creates opportunities for housebuilders to participate in social housing delivery, though this typically involves lower margins compared to private developments.
Market stabilisation at moderate price growth levels suggests that the sector may have found a sustainable equilibrium after the dramatic swings experienced during the pandemic and subsequent interest rate changes.
Mixed sector performance highlights competitive dynamics
Company performances across the sector have been mixed, with Bellway raising its annual homebuilding forecast, citing strong spring sales and increased customer demand. Conversely, MJ Gleeson issued a profit warning due to the increased use of sales incentives, highlighting the challenges of maintaining margins in a competitive market.
Despite these positive indicators, the sector faces ongoing challenges, including labour shortages, material costs, and the need for further planning reforms to meet ambitious housing targets.
The divergent performances between companies like Bellway and MJ Gleeson demonstrate the importance of market positioning, with premium-focused builders like Berkeley potentially better positioned than those competing primarily on price.
Labour shortages remain a structural challenge for the housebuilding sector, with skilled tradespeople in high demand and wage inflation continuing to pressure construction costs across all market segments.
Regulatory environment creates challenges and opportunities
The building safety levy and other regulatory measures introduced following the Grenfell Tower tragedy continue to impact development costs and timelines, particularly for high-rise and complex developments typical of Berkeley’s portfolio.
While these measures increase immediate costs and complexity, they may also create barriers to entry for smaller competitors, potentially benefiting established players like Berkeley with the resources and expertise to navigate complex regulatory requirements.
Planning reforms promised by the government could significantly impact Berkeley’s development pipeline, with streamlined approvals potentially accelerating project delivery and reducing holding costs for development sites.
The effectiveness of government initiatives in accelerating housing development and addressing regulatory hurdles will be crucial for the sector’s medium-term prospects and Berkeley’s ability to achieve its ambitious development targets.
Market demand factors and consumer sentiment
Market demand dynamics continue to be influenced by consumer confidence and affordability, with interest rates and economic stability playing crucial roles in purchasing decisions. The modest house price growth suggests that affordability concerns may be stabilising.
Berkeley’s focus on the London and South East markets provides exposure to areas with structural demand drivers including population growth, employment opportunities, and international investment, though these markets also face greater affordability challenges.
The company’s high-end positioning means it serves customers who are typically less sensitive to mortgage rate changes but more exposed to broader economic sentiment and confidence in property as an investment.
Consumer behaviour in the premium segment has shown resilience, with buyers often having greater financial flexibility and viewing property purchases as long-term investments rather than purely housing decisions.
Berkeley analyst ratings and technical analysis
Berkeley has a TipRanks Smart Score of ‘8 Outperform’ and is rated as a ‘buy’ with 2 ’buy’, 2 ‘hold’ and 0 ‘sell’ recommendations (as of 13/06/2025).
Berkeley TipRanks Smart Score chart
