Equity Analysis
Australia ASX 200 Index
Market Overview
The S&P/ASX 200 rose 171 points, or 2.0%, on Friday to close at 8,804, marking its largest one-day gain since 8 April and touching a one-week high. The rebound erased earlier weakness and left the index up 2.1% for the week, following the previous day's rally on Wall Street. Sentiment improved as tensions between the United States and Iran appeared to ease, with President Trump suggesting that a peace agreement could be signed over the weekend, although Tehran stressed that no final decision had been made. Domestically, softer employment and inflation data strengthened expectations that the central bank may pause rate hikes next week, after having raised rates three times earlier this year. Gold miners gained 5.6%, led by Evolution Mining (+6.7%) and Northern Star (+5.2%), while BHP and Rio Tinto rose 3.1% and 2.7%, respectively. The four major banks advanced between 1.0% and 1.7%. Energy stocks lagged, with Santos down 0.6%. Woodside fell 1.3% after exercising its pre-emptive right to acquire PetroChina's 10.67% stake in the Browse gas project in Western Australia, effectively blocking a transaction with Japan's INPEX.

Sector Performance
Leaders
1.    Materials (XMJ) - the core outperformer

The sector strengthened sharply over the week, with gold miners up 5.6% and base metals also moving higher.

·         Gold leaders: Genesis Minerals (GMD) +11.04% for the week, the strongest performer in the broader market; Liontown Resources (LTR) +10.33%; Evolution Mining (EVN) +6.7%; Northern Star (NST) +5.2%.

·         Diversified majors: BHP +3.1%; Rio Tinto (RIO) +2.7%.

Sector rationale: international gold prices stabilised and rebounded, broader commodity sentiment improved, and several miners posted fresh 52-week highs.

2.    Consumer staples

The sector was highly resilient as defensive capital continued to rotate into the space.

·         Coles (COL) rose more than 12% for the week, Woolworths (WOW) advanced steadily, and liquor-related names such as TWE and EDV also strengthened.

Rationale: expectations of lower rates lifted the valuation of defensive consumer names, while retail revenue remained steady.

3.    Healthcare (XHJ)

Healthcare rose for five consecutive sessions, recovering from earlier weakness.

·         CSL gained 4.2% during the week and rebounded 20% from its June low. Healius (HLS) rose 7.9%, while Pro Medicus (PME) also strengthened.

4.    Financials - banks and insurance

The four major banks rose 1.0%-1.7% for the week. Insurance names including QBE and Steadfast also rallied sharply.

·         Steadfast Group (SDF) received a takeover proposal and surged 36.2% in a single session, making it the week's biggest volatility standout.

5.    Information technology

Technology jumped 4.7% on Friday alone, catching up with gains in US technology shares.

·         Life360 (360) gained 13.3% for the week, WiseTech (WTC) rose 7.9%, and Xero (XRO) added 7.5%.

Laggards
6.    Energy - the weakest sector

Energy traded against the broader market trend and underperformed the index.

·         Woodside Energy (WDS) fell 1.3% after exercising its pre-emptive right over Browse gas assets, raising market concerns about higher capital expenditure.

·         Santos (STO) fell 0.6%.

·         Viva Energy (VEA) declined 3.86%.

Crude oil prices spiked and then retreated during the week, while capital-expenditure pressure weighed on oil and gas valuations.

7.    REITs

REITs were weak throughout the week. Nine constituents hit fresh 52-week lows, as lower-rate expectations have not yet fully translated into support for property rental assets.

8.    Media and selected consumer discretionary names

·         News Corp (NWS) fell 4.71% amid weak advertising conditions.

·         REA Group (REA) declined 3.07% as property-platform sentiment followed the broader real estate weakness.

Notable Stocks
Top weekly gainers:

·         SDF (Steadfast): +36.2%, driven by takeover-premium speculation.

·         GMD (Genesis, gold miner): +11.04%.

·         LTR (Liontown, lithium miner): +10.33%.

·         360 (Life360): +13.3%.

·         A2M (The a2 Milk Company): +9.82%.

Weakest stocks:

·         NWS (News Corp): -4.71%.

·         VEA (Viva Energy): -3.86%.

·         REA (property platform): -3.07%.

·         WDS (Woodside Energy): -1.3%.

Technical Analysis
The ASX 200 closed last week at 8,804, up 2.1% for the week, completing a bottoming reversal after opening lower and trading choppily to a low of 8,604. Early in the week, concerns over the Middle East conflict and RBA rate-hike expectations weighed on the market, producing a small bearish candle and testing the 8,600 support zone. Before the weekend, however, the index surged 2.0% in a single session, adding 171 points to close at 8,804, its biggest daily gain since April. Easing US-Iran tensions and weaker Australian data, which lifted rate-cut expectations, triggered broad-based strength across resources and banks. Friday's close at 8,804 was a decisive move above the 200-day moving average at 8,783, ending nearly two weeks of pressure and shifting the medium-term trend from weak to stable.

Throughout the week, the pullback held above the 50-day moving average, the key medium-term strength line, at 8,742. This keeps the correction in a constructive framework, with the 5-day moving average becoming the first major support for the coming week. The 20-, 10-, and 5-day short-term averages have all turned higher, and Friday's bullish candle broke through short-term moving-average resistance in one move, forming a short-cycle bullish alignment. RSI (14) closed at 54.45, above the neutral 50 line, with no overbought condition, sufficient upward momentum, and no bearish-divergence risk. MACD shows the DIFF line holding above the zero line, with the red histogram expanding significantly, indicating stronger bullish momentum and no bearish crossover. Volume also confirmed the move: Friday's rally came on the highest volume of the week, while the previous four sessions pulled back on lighter turnover. The price-volume structure remains healthy, with no volume-divergence warning.

Trading Strategy: Two-Way Trading Framework
The following is a technical trading framework only and does not constitute investment advice. Leveraged trading can result in losses greater than the initial deposit.

Short-Term Strategy (1-5 Days)
Long setups:

·         Conservative entry: consider long positions if the index pulls back to 8,700-8,750, near the 200-day moving average, and stabilises. Place the stop below 8,650. Targets: 8,810-8,850.

·         Aggressive entry: if the index breaks above 8,850 on strong volume and holds above that level, consider breakout longs. Place the stop below 8,800. Target: 8,900.

·         Suggested watchlist: BHP, RIO, NCM, and NST.

Short setups:

·         Conservative entry: if the index stalls at 8,850 and turns lower on shrinking volume, consider shorts with a stop above 8,900. Target: 8,700.

·         Aggressive entry: if the index breaks below 8,600 on strong volume, consider shorts with a stop above 8,650. Target: 8,480-8,490.

·         Suggested watchlist: energy leaders such as WDS and OVL, which are more exposed to falling oil prices.

Key Risks
·         Technical pullback risk: the index has risen for several sessions, and RSI is approaching overbought territory, leaving room for a technical correction.

·         Elevated valuation: the ASX 200 forward P/E is around 16.7x, above the long-term average of 14.9x. Upside may remain limited while valuation risk is rising.

·         Liquidity risk: quarter-end institutional rebalancing could increase market volatility.

Dow Jones Industrial Average
Market Overview
US equities rose across the board, with the S&P 500 setting another record closing high. The market continued to digest optimism from SpaceX's strong first-day listing performance, while also pricing in the possibility that the United States and Iran could reach a peace agreement in the coming days, reducing geopolitical risk in the Middle East. These two tailwinds lifted risk appetite significantly. Technology shares remained broadly firm, while international oil prices dropped by more than 3%. Against the backdrop of easing geopolitical risk and continued strength in technology, all three major US indices closed higher. The Dow Jones Industrial Average rose 353.51 points, or 0.7%; the S&P 500 gained 0.5% to 7,431.46, marking a new record close; and the Nasdaq Composite added 0.31%.

Despite the strong tone, some institutions have begun urging caution. The US rally has become increasingly dependent on a small group of mega-cap technology companies. Data show that only about one-third of US stocks have outperformed the broader market over the past three months, one of the lowest readings in more than 30 years. At the same time, US inflation remains above target, and concerns that rates may stay high for longer have not disappeared. If a high-rate environment persists, technology valuations may face renewed repricing pressure.

Sector Performance
Leaders: Sector Logic and Key Names
Financials - banks, insurance, and payments - were the strongest area of the week.

Rationale: low valuations, high dividends, and resilient economic fundamentals encouraged defensive capital allocation.

Dow outperformers:

·         Goldman Sachs (GS) led the weekly gains, rising 2.62% on Friday and trending higher during the week.

·         JPMorgan (JPM) strengthened steadily, with its largest single-day gain exceeding 3%. It continued to act as a core banking heavyweight.

·         American Express (AXP) and Visa (V) advanced alongside the broader payment and consumer-finance group, supported by their defensive characteristics.

Healthcare:

Rationale: more predictable earnings and defensive characteristics helped offset technology-sector volatility.

·         UnitedHealth (UNH), after a near-6% gain in the previous week, remained resilient. Johnson & Johnson (JNJ) and Merck (MRK) also staged corrective rebounds.

Consumer staples - defensive consumption:

·         Procter & Gamble (PG), Coca-Cola (KO), and Walmart (WMT) were supported by stable essential-demand cash flows, making the group a safe haven in a choppy market.

Industrials, retail, and building materials:

·         Home Depot (HD) rose 3.75% in one session during the week, while industrial-equipment name Caterpillar (CAT) recovered from earlier weakness.

Laggards
Underperforming sectors and weak Dow components:

AI hardware and semiconductor technology were the biggest drag of the week.

Trigger: Broadcom's results were slightly below expectations, prompting profit-taking across the entire theme. Investors also became concerned that AI hardware valuations may have run ahead of fundamentals and that capital-expenditure growth could slow.

Sector performance: the Philadelphia Semiconductor Index dropped sharply during the week before staging a modest rebound on Thursday, while technology-heavy Dow constituents remained under pressure.

Selected software and communications technology names also weakened as cloud-software and legacy communications-equipment earnings growth slowed and capital flowed out of the group.

Weakest Dow 30 components:

·         Cisco (CSCO): among the week's weaker names, pressured by soft demand for legacy communications equipment and slower AI transition progress compared with hardware peers.

·         IBM: traditional IT services remained under pressure, and AI-related business has not yet contributed meaningfully to profits. The stock underperformed through the week.

·         Apple (AAPL): traded with a weak bias as consumer-electronics demand remained muted and expectations for AI-enabled smartphone growth stayed limited. The stock edged lower on Friday.

Technical Analysis
The Dow experienced sharp volatility through the week, closing at 51,202.26 after a deep pullback and a strong V-shaped rebound. The weekly candle closed slightly higher, with the overall structure showing high-level consolidation and capital rotation from high-valuation technology into value and defensive sectors. Last week's candle formed a long-lower-shadow bullish structure, with resistance near the previous high around 51,800 and strong support around 49,900. The trading rhythm was: mild decline on Monday, range-bound tug-of-war on Tuesday, a 953-point plunge on Wednesday (-1.87%), a 930-point rally on Thursday (+1.86%), and a modest 0.70% gain on Friday to finish the recovery.

RSI (14) fell below the neutral 50 line to 48 on Wednesday, then rebounded to the 55 area on Thursday, without reaching either extreme overbought or oversold territory. A potential bearish divergence has emerged, with price making a new high while RSI posted a lower high, suggesting that upside momentum is weakening at the margin. This implies the index is more likely to consolidate than to trend sharply higher in a straight line. On the daily chart, the MACD red histogram has shortened and the DIFF line has turned slightly lower, indicating fading bullish momentum, although no valid bearish crossover has formed. The weekly MACD remains in bullish histogram territory. ADX trend strength is around 29, indicating that trend force has weakened and confirming a high-level range-trading phase rather than trend acceleration.

Trading Strategy - Short-Term Focus
·         Bullish view: as long as the index holds above 50,780, favour buying dips within the range. Place the stop below 49,900. First target: 51,400; a breakout would open 51,750.

·         Bearish view: if the index fails to break above 51,750, consider a small short position with a stop above 51,850. Downside target: the 50,800 support area.

·         Major-trend view: as long as the weekly close does not fall below 50,000, the medium- to long-term bull-market structure remains intact. The bearish divergence suggests the next one to two weeks may be dominated by wide-range consolidation to digest valuations.

Risk Warning
The market faces uncertainties from geopolitical conflict affecting oil prices, volatility in US Treasury yields, potential surprises in June non-farm payrolls, and possible downward revisions to AI-company earnings guidance. Index volatility may increase, and leveraged trading carries extremely high risk.

Currency Analysis
US Dollar Index
Late last week, the US dollar gave back gains as market sentiment improved. The Dollar Index, which measures the dollar against a basket of major currencies, slipped to just above a one-week low at 99.60, down roughly 0.27% for the week, as hopes for a US-Iran peace agreement reduced speculative demand for the safe-haven dollar. Investors welcomed President Trump's statement that he had cancelled a third day of planned attacks on Iran after a breakthrough in negotiations. The agreement still requires approval from Tehran. It would prevent Iran from developing nuclear weapons and allow the Strait of Hormuz to reopen, a waterway through which roughly 20% of global oil supply passes. Iranian authorities said no final decision had been made, although foreign ministry spokesman Esmail Baghaei confirmed in local media that the government was reviewing the document and was "closer than ever" to approval.

After US and Israeli strikes on Iran, the Dollar Index had risen by about 3% and became the market's preferred safe-haven asset as regional tensions escalated. From this perspective, a durable peace agreement, especially one that normalises maritime traffic through the Strait of Hormuz, would likely revive risk appetite and pull the Dollar Index back toward its pre-war level near 97.50 or lower. Meanwhile, data released on Thursday showed that US producer prices rose 6.5% year on year in May, the fastest pace since November 2022 and slightly above expectations of 6.4%, highlighting the growing impact of the Middle East energy shock. Together with earlier data showing consumer inflation accelerating to a three-year high, the latest PPI reading may strengthen expectations that the Federal Reserve could raise rates later this year.

Last week, the Dollar Index first spiked, then pulled back into high-level consolidation and a narrow range. Early in the week, it was supported by a much stronger-than-expected May non-farm payrolls report and rising Middle East safe-haven demand, pushing to a swing high of 100.31. It held above the 100 psychological level intraday and reached a two-month high. In the second half of the week, news of US-Iran talks cooled safe-haven demand, while short-term profit-taking dragged the index back from above 100 to repeatedly test 99.60. The index is currently holding firmly above the daily 200-day moving average at 98.67, while the Bollinger upper band at 100.16 and last week's high at 100.31 form strong medium-term resistance. Since the February low of 95.58, both highs and lows have been rising, confirming a medium-term reversal structure. From a pattern perspective, last week's rejection at 100.31 produced a long-upper-shadow doji or small bullish weekly candle, a normal pullback after a bullish breakout that has not damaged the uptrend.

Technically, MACD remains above the zero line. The red histogram has narrowed slightly, but no bearish crossover has formed, so momentum is only fading temporarily rather than turning bearish. RSI (14) is around 58, within the strong zone and still below the 70+ overbought area, leaving no clear trigger for a sharp correction. The broader structure remains a healthy pullback after a break above 100. The medium-term uptrend is intact, layered moving averages are providing support, and there is no clear technical topping signal. Near term, however, the 100 level is capping the index.

The first bull-bear line is 99.50. If the index holds above 99.50, it may rebound toward the psychological 100.00 level. A decisive breakout would target the previous high at 100.64 and then the 101.00 round-number area. If the Dollar Index breaks below 99.50, the first downside target is 99.00, followed by the 98.75 area, the 29 May low. A break of those levels would signal the end of the current rebound and a return toward the 98.00 area.

Today's idea: consider shorting the Dollar Index at 99.90, with a stop at 100.00 and targets at 99.40 and 99.30.

AUD/USD
Last week, the key issue for AUD/USD was not whether the exchange rate could stabilise, but whether the 0.7000 round number would shift from short-term support into a medium-term dividing line. AUD/USD is currently trading slightly above 0.7000, close to flat, after touching a midweek low near 0.6987. On the daily chart, price is near the Bollinger lower band at 0.7003, while MACD remains in negative expansion territory, suggesting that the rebound is more of a technical pause than a genuine easing of trend pressure. The Federal Reserve's 16-17 June meeting will include updated economic projections, and forward guidance will be more important than the rate decision itself. If the policy tone shifts from its earlier easing bias toward greater emphasis on inflation risks, the Dollar Index could retain strong rate support even amid short-term volatility. For AUD/USD, pressure from the dollar side is not merely safe-haven buying; it reflects short-end rate pricing, energy inflation, and policy expectations combined.

The RBA raised the cash rate by 25 basis points to 4.35% in May, but the minutes showed that one of nine members supported holding rates unchanged, while most members believed financial conditions were likely already restrictive after the hike and that the central bank needed to observe the impact of the Middle East conflict as well as household and business responses. This wording implies that while the policy rate is high, the hurdle for further hikes is also rising. More importantly, domestic data are beginning to weaken the Australian dollar's relative-yield narrative. Seasonally adjusted employment fell by 18,600 in April to 14.7374 million, the unemployment rate rose to 4.5%, and the number of unemployed increased by 33,000 to 692,500. This does not point to a labour-market collapse, but it does mean that the RBA's trade-off between inflation and growth is becoming more complicated, and the Australian dollar's response to yield differentials may become increasingly asymmetric.

On the daily chart, AUD/USD has maintained a lower centre of gravity since its previous high at 0.7270. The recent rebound high was only around 0.7200, after which the pair broke below the Bollinger midline at 0.7117 and moved close to the lower band at 0.7003. Price is now running just above the edge of the lower Bollinger band, indicating not a volatility squeeze before an upside attack, but rather a defensive test of the lower side of the trend. AUD/USD remains below the Bollinger midline at 0.7117, and the 0.7117-0.7139 area, the latter being the 50-day simple moving average, forms a dense resistance zone. Major resistance is at 0.7188, this month's high. Together with the negative expansion in MACD, the current structure looks more like low-level consolidation after a decline than a valid reversal.

Brent crude was at USD 92 per barrel on 11 June, down 3% from the previous day but still 32.67% higher than a year earlier. High oil prices are not a one-way positive for the Australian dollar. On one hand, the AUD has resource-currency characteristics. On the other, higher energy prices squeeze household purchasing power, raise business costs, and weigh on global risk appetite. In the current phase, the latter effect is more dominant in FX markets. The core contradiction for AUD/USD has therefore shifted from "whose interest rate is higher" to "whose policy path is more credible." US inflation remains above the Fed's target, limiting room for policy easing. Although the RBA has already raised rates, employment and activity data have called into question the sustainability of further tightening. As long as this divergence persists, the battle around 0.7000 is not only a technical-level contest but also an important macro-pricing support level for the Australian dollar's risk premium. A break would expose 0.6898, the 7 April low, with key support near the 200-day simple moving average at 0.6841.

Today's idea: consider buying AUD at 0.7032, with a stop at 0.7020 and targets at 0.7090 and 0.7080.

GBP/USD
Sterling attracted modest buying against its major peers after the release of UK monthly GDP data for April. GBP/USD recovered most of its early losses and rebounded toward 1.3410. The Office for National Statistics reported that the economy contracted by 0.1%, in line with expectations, as consumers and businesses had brought purchases forward in March, when the economy grew 0.3%, in response to potential future price increases linked to the Middle East conflict. Next week, sterling is expected to see heightened volatility as the UK releases employment data for the three months to April and May CPI. The key trigger will be the Bank of England's monetary policy announcement. Meanwhile, the US dollar rebounded after Thursday's decline, as traders questioned whether the US and Iran would reach an agreement soon, despite President Donald Trump saying that the discussions and final points had been approved by all parties in both concept and detail, and that the time and location for signing would be announced soon.

At this stage, sterling is trading slightly above USD 1.34, supported by escalating Middle East tensions and rising expectations that the Bank of England may tighten monetary policy. The United States and Iran have exchanged airstrikes, and President Trump has threatened further action unless Tehran immediately agrees to a peace deal. Money markets are currently pricing at least a 25-basis-point BoE rate hike in September, with the possibility of a second hike before year-end. At the same time, delayed effects from the Iran conflict on businesses and consumers mean the UK economy may have contracted 0.1% in April, while uncertainty around Labour leadership has added to downside pressure.

GBP/USD has been consolidating for an extended period. Markets do not remain in consolidation forever. The most reasonable trading approach now is to define the current range, identify the technical and fundamental triggers that could end the sideways structure, and recognise the breakout signal accurately. The Dollar Index is holding a firm consolidation pattern below its monthly high and is approaching a directional decision. Whether the dollar breaks higher or reverses lower will directly drive GBP/USD volatility. From the chart, the most important technical pattern is a converging triangle. This pattern is typical of consolidation and suggests that once the exchange rate breaks above or below the triangle trend lines, a new directional move may begin. If the trend line aligns with key horizontal support or resistance, it will become a central signal for judging the next move.

Another key feature is that the exchange rate has drifted lower over the past several weeks, mainly due to dollar strength rather than any clear sterling-specific bullish or bearish driver. The fundamentals have been relatively flat. The lower triangle trend line overlaps with the key 1.3351 support level and sits close to the 1.3350 round number, creating a strong confluence zone and the core bull-bear dividing line. Given the risk-off tone created by the escalation in Iran, the probability of a downside break is higher, leaving the overall bias tactically bearish. In addition, price has repeatedly been rejected at the 200-day moving average resistance at 1.3419, further confirming the short-side advantage. Key resistance lies at 1.3499, the Bollinger upper band, and 1.3500, the psychological level. Therefore, the path of least resistance currently remains to the downside. RSI is at 48, close to neutral, suggesting consolidation rather than aggressive selling. On the downside, the next major support is near the Bollinger lower band around 1.3343. A break below this level would open a deeper pullback into the 1.3300 round number to 1.3302, the 18 May low.

Today's idea: consider buying GBP at 1.3395, with a stop at 1.3383 and targets at 1.3450 and 1.3460.

USD/JPY
USD/JPY regained upward momentum after an overnight pullback from a one-month high. Middle East tensions weakened the yen, while renewed demand for the US dollar supported spot USD/JPY. The technical picture is mixed. Recently, USD/JPY has been volatile, driven by multiple domestic and external factors. The pair ended its short-term correction and rebounded again ahead of the Bank of Japan's key policy meeting, with the market remaining cautious and two-sided. Fresh long-side capital entered the market, allowing USD/JPY to move away from the previous session's one-week low and stabilise. Overall, geopolitics, US-Japan monetary policy expectations, and intervention risk expectations are jointly driving this move. The short-term uptrend has not ended, but upside momentum is already showing signs of fatigue.

New bullish capital has entered USD/JPY, pushing the pair clear of the previous day's one-week low and starting a modest rebound. During the week, price held around 160.25-160.30. In terms of the broader swing structure, the pair remains only slightly below the late-April swing high and still trades within the core strong-uptrend zone. The foundation of the short-term uptrend has not been broken. Ongoing Middle East turbulence has continued to weigh on the yen's safe-haven appeal, leaving the yen under pressure. At the same time, persistent global geopolitical risk and strong expectations that the Fed will maintain a hawkish policy stance have revived demand for the dollar, providing firm support for USD/JPY and further widening the divergence between the two currencies.

In summary, the short-term core support for USD/JPY is firm near the 20-day simple moving average around 159.62. As long as this key support is not decisively broken, each pullback is likely to attract dip-buying, allowing the bullish trend to continue. Conversely, a sharp decline and decisive break below the 20-day SMA would end the uptrend that has lasted nearly a month. Late last week, the pullback found strong support near the 20-day SMA and did not produce a deep downside break. The subsequent rebound confirmed that bulls still dominate the market, meaning the broader uptrend has not reversed and further upside remains possible.

Downside targets are 159.00, the round-number level, and 158.62, the Bollinger lower band. Before the BoJ policy decision, USD/JPY is likely to maintain a structurally choppy but upward-leaning pattern. At the same time, several momentum indicators are already showing signs of fatigue, leaving the technical picture divided. RSI (14) is hovering above the neutral threshold at 60, keeping the upside signal intact. MACD is running slightly in negative territory, suggesting that upward momentum is gradually fading rather than confirming a strong continuation signal. Still, as long as buyers defend the 159.00-159.62 support zone, the bias remains tilted higher. A renewed push toward 160.72, the Bollinger upper band, and 160.73, the 30 April high, remains the main upside scenario. A break above that would point USD/JPY toward 161.00 and then challenge 161.75, the July 2024 high.

Today's idea: consider shorting USD at 160.40, with a stop at 160.60 and targets at 159.50 and 159.40.

EUR/USD
The euro approached USD 1.15, hovering near its lowest level since early April, after the European Central Bank delivered the expected 25-basis-point rate hike, its first since 2023. Policymakers cited surging energy costs and persistent inflation risks, both of which have been intensified by the Iran conflict and disruptions to oil transportation through the Strait of Hormuz. The ECB also raised its inflation forecasts, now expecting headline inflation at 3.0% in 2026, up from 2.6%, and 2.3% in 2027, up from 2.0%. Core inflation is projected at 2.5% in both years, revised up from 2.3% and 2.2%. The growth outlook was trimmed slightly, with eurozone GDP expected at 0.8% in 2026, down from 0.9%, and 1.2% in 2027, down from 1.3%. Meanwhile, the dollar remained firm amid ongoing Middle East tensions, as repeated military strikes and diplomatic setbacks dimmed hopes of US-Iran reconciliation.

With the ECB's June rate hike now delivered, market attention has shifted to the central bank's subsequent policy path. At the press conference, Lagarde did not rule out further hikes and stressed that future decisions would be entirely data-dependent. She noted that if the Middle East conflict continues to push energy costs higher and causes inflation expectations to become unanchored, the ECB would not hesitate to take further action. Markets generally expect the ECB could raise rates by another 25 basis points in September or October, although the exact timing remains highly uncertain. Meanwhile, the evolution of the Middle East situation remains a key variable for risk sentiment and the euro. If a peace agreement is ultimately reached and oil transportation through the Strait of Hormuz gradually returns to normal, lower energy prices could ease eurozone inflation pressure while improving global risk appetite. In that scenario, the euro could benefit further from a broader rise in risk assets.

Technically, EUR/USD showed limited volatility around the decision, indicating that the market had already priced in the main policy message. Compared with historical highs, the latest quote remains in a relatively moderate range and has not produced a trend breakout. This contrasts with the sharp moves seen during the 2022 energy crisis, when the euro faced more pronounced downside pressure. The recent mild pullback after limited volatility reflects a short-term balance between bulls and bears: bulls are supported by the rate hike, while bears remain concerned about weak growth data. On the daily chart, EUR/USD is in a weak downward consolidation channel and is currently under pressure near 1.1560. The moving-average structure shows price trading below the MA20, MA50, MA100, and MA200. Short-term averages are close to a bearish alignment, while medium- and long-term averages are flat to lower, creating layered resistance and leaving the overall trend weak.

From a technical perspective, however, the daily chart still shows that the broader EUR/USD structure retains an upward trend. The first key resistance level is the 1.1600 round number and the 20-day moving average at 1.1603. A break above this area could open a move toward 1.1677, the 200-day moving average, and then the 1.1700 level. Initial support is near 1.1500, the psychological level, and 1.1505, the 6 April low. A break below this area could trigger a pullback to 1.1447, the 31 March low. From an indicator perspective, RSI remains in a neutral-to-firm range and MACD remains positive, suggesting that medium- to long-term upside momentum still has the upper hand. However, RSI is also quoted at 42, a neutral-to-bearish zone and not oversold, meaning downside momentum has not yet been fully exhausted and short-term downside risk remains.

Today's idea: consider buying EUR at 1.1555, with a stop at 1.1540 and targets at 1.1600 and 1.1620.

Commodity Analysis
WTI Spot Crude Oil
WTI crude fell below roughly USD 82 per barrel last week to USD 81.80, a two-month low, and dropped more than 6% for the week. The decline was driven by expectations that the United States and Iran could reach an agreement to reopen the Strait of Hormuz, although officials cautioned that a deal was not guaranteed. Prices fell around 6% during the week but remained more than 20% higher since the 28 February US and Israeli strikes on Iran. A Trump administration official said the probability of signing an agreement was 80%. The deal could involve reopening Hormuz, lifting the maritime blockade, dismantling Iran's nuclear programme, and offering economic incentives if Tehran complies. However, conflicting reports emerged after Iranian media published a draft proposal suggesting different terms, including US troop withdrawal and reconstruction funding. President Trump said that draft did not reflect the agreed terms. Pakistan's prime minister said a final text had been reached, while Iran's foreign minister said the understanding was closer than ever, but urged caution until it was finalised. This uncertainty remains a fundamental supply risk for the oil market.

According to Iran's Mehr News Agency, the draft US-Iran memorandum of understanding includes three key commitments and several energy-related easing measures, directly addressing the core contradiction in the crude market. The US side would commit to lifting sanctions on Iran, withdrawing from the areas surrounding Iran, and cancelling the maritime blockade. The core terms also include reopening the Strait of Hormuz, lifting oil sanctions, and unfreezing Iranian funds. These measures are significant for crude trading: lifting oil sanctions would allow Iranian crude to regain access to global markets; unfreezing funds would support the recovery of Iranian production and export infrastructure; and lifting the maritime blockade and reopening Hormuz would remove geopolitical risk from the oil transportation chain.

Last week, WTI crude traded in a choppy downward pattern, plunging from around USD 93.48 to USD 81.80, a two-month low, before rebounding into the close at USD 82.90. Technically, bears dominate. Price has broken below multiple moving averages and key support levels, while indicators show continued bearish momentum. Downside focus is on USD 81.80, last Friday's low, and USD 81.17, the Bollinger lower band. Resistance is concentrated at USD 85.22, the 100-day moving average, and USD 85.75, last week's high. On the daily chart, US crude is in a high-level pullback phase, with a weak short-term trend. Price has broken below the MA20 and MA50, and the MA20 has turned down, weighing on oil prices. However, price remains above the 200-day moving average, so the medium- to long-term uptrend has not been fully broken. Key support lies near the previous low, while moving averages and the prior high form multiple resistance layers above.

The MACD DIFF line is running below the DEA line, with green histogram bars continuing to expand, indicating that bearish momentum remains in force. RSI is near 38.20, already in a weak zone but not yet oversold, meaning downside momentum has not been fully exhausted. Overall, crude oil is in a high-level, weak consolidation structure, with bears dominating the short-term market. WTI is capped by moving averages and any rebound may be limited. If the USD 81.80 and USD 81.17 support zone is decisively broken, further downside toward USD 80 could open, with a possible test of the 200-day moving average at USD 72.48. If support holds, a technical rebound could target USD 85.22, the 100-day moving average, and USD 85.75, last week's high. A breakout would point to USD 88.98, the 9-day moving average, although the overall trend would remain weak.

Today's idea: consider shorting crude oil at 83.10, with a stop at 83.30 and targets at 81.00 and 80.00.

Spot Gold
Before the end of last week, gold returned to above USD 4,200 per ounce after earlier falling to a nearly three-month low near USD 4,024, as oil prices declined on optimism over a potential US-Iran peace agreement. However, gold still faced a second consecutive weekly decline due to expectations of higher interest rates. President Trump suggested that an agreement could be reached over the weekend, although Tehran said it had not yet made a final decision. Since the Iran conflict began, gold has come under pressure because surging energy costs may lift inflation and reinforce expectations that central banks will keep interest rates high. Supporting this view, the European Central Bank raised rates on Thursday for the first time since 2023 and lifted its inflation forecasts for 2026 and 2027. In addition, US producer prices rose 6.5% year on year in May, highlighting the inflationary impact of the Middle East energy shock and strengthening expectations that the Fed could raise rates this year.

Gold consolidated above USD 4,200 as market participants remained optimistic about a potential US-Iran agreement being signed soon. At the same time, US households became more upbeat about the economy. Investor sentiment improved on news that the Middle East conflict could end if Washington and Tehran proceed with signing the Islamabad memorandum of understanding. Speculation has grown that an agreement could be signed at the G7 meeting in Geneva, Switzerland, but Iran's foreign ministry spokesman said Iranian decision-making bodies were meeting to discuss the memorandum and that he could not confirm specific details. If both sides reach an agreement, the Strait of Hormuz would reopen, potentially pushing energy prices lower and easing inflation concerns expressed by major central banks over conflict-driven energy shocks.

From a technical perspective, gold maintains a short-term bearish bias while trading below the 200-day simple moving average at 4,450. In addition, last Friday's failure near the 23.6% Fibonacci retracement of the decline from the April swing high suggests the overnight rebound may still be viewed as short covering. MACD remains in negative territory, with the MACD line below the signal line and the histogram still negative. Combined with RSI (14) hovering near 36, these signals indicate that downside pressure remains despite the rebound from recent lows. Although gold rebounded 3.50% late last week and broke above USD 4,200 to USD 4,246, creating room for further upside, the overall trend remains neutral to bearish.

On the upside, initial resistance is around USD 4,229, the 23.6% Fibonacci retracement, and USD 4,246, last Friday's high. Next resistance is near USD 4,300, the round number, and USD 4,355, the 38.2% Fibonacci retracement. Higher up, the 200-day simple moving average near USD 4,450 and the nearby 50% Fibonacci retracement around USD 4,456 form strong resistance, which would need to be cleared before any move toward the USD 4,500 cycle high. On the downside, the first key support is the psychological USD 4,150 level. A break below USD 4,150 would bring a retest of last week's nearly three-month low at USD 4,024 and the psychological USD 4,000 level. A break below that would suggest the possibility of a deeper corrective move.

Today's idea: consider buying gold at 4,214, with a stop at 4,210 and targets at 4,260 and 4,280.

Disclaimer: This document is a translation of the supplied market commentary. It is for informational purposes only and does not constitute investment advice, a recommendation, or an offer to trade. Leveraged products carry significant risk and may result in losses exceeding the initial deposit.