Market Digest

Markets opened the week under renewed geopolitical pressure after optimism over a temporary reopening of the Strait of Hormuz faded over the weekend. Fresh tensions between the United States and Iran revived risk concerns, driving volatility across currencies, commodities and equities.

The US dollar recovered from recent lows and moved back above the 98 level, supported by renewed safe-haven demand after diplomatic optimism weakened. Treasury yields remained relatively stable, while expectations for Federal Reserve rate cuts continued to influence broader market sentiment.

Gold opened lower in Asian trade near $4,776 after testing record highs last week, as traders weighed rising geopolitical risks against shifting inflation expectations and monetary policy prospects. Meanwhile, oil rebounded sharply above $90 after Friday’s steep selloff, reflecting renewed concerns around supply disruptions linked to the Strait of Hormuz.

Market sentiment remains divided between fading optimism around diplomacy and persistent geopolitical risk, keeping volatility elevated across major asset classes.

Technical Analysis

Dollar Index (DXY) – Recovery Structure Builds Above Support

The dollar index found support above 97.60 last week before recovering toward the 98.20 region, suggesting a bullish corrective structure may be forming.

If price holds above 98.10, upside targets remain positioned toward 98.50 and 98.70. A break below support could challenge the recovery outlook.

Key Levels

• Resistance: 98.50, 98.70
• Support: 98.10, 97.70

EUR/USD – Bearish Pressure Emerging Below Resistance

EUR/USD continues to face resistance below 1.1850 after failing to sustain recent highs. Price action suggests the pair may remain vulnerable to downside pressure if rallies stall below 1.1780.

A rejection from current resistance may expose downside targets toward 1.1725 and potentially 1.1705.

Key Levels

• Resistance: 1.1780, 1.1835
• Support: 1.1725, 1.1705

Gold – Pullback Risks Rise Below 4,858 Resistance

Gold remains under pressure after failing to sustain gains near 4,890, with technical signals suggesting a corrective phase may develop.

If rebounds remain capped below 4,858, downside targets sit near 4,760 and potentially 4,717. A break above resistance would re-open upside potential toward fresh highs.

Key Levels

• Resistance: 4,858, 4,909
• Support: 4,760, 4,717

Economic News Highlights

US Dollar Recovers as Risk Premium Returns

The US dollar staged a modest rebound after reaching seven-week lows as renewed tensions restored part of the geopolitical risk premium that had recently faded.

While markets continue pricing possible Federal Reserve easing later this year, the renewed demand for defensive assets has provided short-term support for the greenback.

Oil Rebounds After Sharp Collapse

Crude oil prices experienced extreme volatility, falling sharply last Friday as shipping through Hormuz resumed, before rebounding above $90 as weekend developments reignited supply disruption fears.

Markets remain highly sensitive to developments around maritime security and regional diplomacy.

Gold Supported by Lower Rate Expectations but Faces Volatility

Gold remains supported by weaker inflation concerns and growing rate-cut expectations, while renewed geopolitical escalation continues to reinforce medium-term safe-haven demand.

Analysts continue to monitor whether bullion can sustain momentum toward the psychologically significant $5,000 region.

Euro and Risk Currencies Hold Firm Despite Dollar Bounce

The euro, Australian dollar and sterling remain relatively resilient despite the dollar’s rebound, reflecting continued support from improving global risk appetite and diverging central bank expectations.

However, rising resistance levels suggest upside momentum may face short-term exhaustion.

Market Performance

US Equities

US stocks ended higher, with major benchmarks extending gains as lower oil prices and easing inflation fears supported risk appetite. The Nasdaq marked its longest winning streak since 1992.

European Equities

European indexes posted broad gains, supported by easing geopolitical fears late last week and optimism around global growth resilience.

Precious Metals

Gold and silver both closed higher Friday, although Monday opened with renewed pressure as geopolitical risks resurfaced.

CWG Trading Outlook

Short-term strategy favors buying the US dollar on dips while respecting breakout risks and maintaining disciplined stop-loss management.

Trade Levels

• Dollar Index: Buy near 98.10, target 98.70
• EUR/USD: Sell near 1.1780, target 1.1710
• GBP/USD: Sell near 1.3535, target 1.3450
• USD/CHF: Buy near 0.7805, target 0.7875
• USD/JPY: Sell near 159.45, target 157.50
• AUD/USD: Sell near 0.7175, target 0.7115
• USD/CAD: Buy near 1.3650, target 1.3740
• Gold: Sell near 4860, target 4717