Market Digest

Markets remained driven by geopolitical risk and inflation repricing, with the US dollar extending gains as safe-haven demand returned and traders pushed back expectations for Federal Reserve rate cuts.

WTI crude surged above $93 as Strait of Hormuz disruption fears outweighed optimism surrounding ceasefire extensions, reviving stagflation concerns and adding upward pressure to inflation expectations globally.

Gold staged a measured rebound from recent sharp losses, recovering toward the $4,770 region as softer Treasury yields improved support, though gains remained capped by resilient US macro data and a higher-for-longer Fed narrative.

In currency markets, the New Zealand dollar outperformed after stronger inflation data revived Reserve Bank of New Zealand tightening expectations, lifting NZD/USD while pressuring EUR/NZD and GBP/NZD.

Meanwhile, EUR/USD softened under the dual pressure of rising energy-cost risks and a firmer US dollar backdrop, while technical levels across major assets suggest breakout conditions may be approaching.

Attention now shifts toward German and UK PMI data as the next major catalyst for risk sentiment and directional moves.

Technical Analysis

NZD/USD – Kiwi Recovery Builds as Bulls Challenge 0.5950 Resistance

NZD/USD continues to hold a constructive bullish structure as buyers press against major resistance at 0.5950. Momentum indicators remain supportive, with RSI strengthening, MACD bullish, and price holding above the 20 and 50 EMA cluster.

A sustained break above 0.5950 could expose 0.5995 and potentially the 0.6050 region, while failure at resistance may trigger consolidation back toward 0.5870.

Key Levels

• Resistance: 0.5950, 0.5995
• Support: 0.5870, 0.5680

EUR/USD – Rally Pauses as Bulls Defend 1.1700

EUR/USD remains in a broader recovery structure despite losing momentum after rejection near 1.1800 resistance.

Price continues to hold around the 1.1700 zone, with medium-term bullish bias intact while above support. A move back above 1.1800 could reopen upside toward 1.1915, while downside risk centers on 1.1610.

Key Levels

• Resistance: 1.1800, 1.1915
• Support: 1.1610, 1.1415

XAU/USD – Gold Consolidates Below 4,840

Gold is moving into consolidation beneath major resistance near 4,840, with narrowing Bollinger Bands signaling potential breakout pressure building.

While short-term momentum has cooled, the longer-term bullish structure remains intact as price holds above major long-term moving averages.

Key Levels

• Resistance: 4,840, 5,085
• Support: 4,380, 4,195

Economic News Highlights

Gold Rebounds as Dollar Softens but Fed Outlook Caps Gains

Gold recovered from weekly lows as lower long-dated Treasury yields and a softer dollar brought buyers back into the market. However, stronger US data and sticky inflation expectations limited follow-through.

The metal remains supported on dips, though upside may remain constrained unless yields retreat further.

Oil Surges on Hormuz Closure Fears

Crude extended gains as traders continued pricing severe supply disruption risk from Middle East tensions.

With inflation concerns rising and markets fearing prolonged disruption, oil remains highly sensitive to geopolitical developments.

NZD Strengthens After Inflation Surprise

New Zealand CPI exceeded expectations, boosting expectations for restrictive RBNZ policy and supporting kiwi demand.

Short-term momentum remains bullish while rate expectations stay elevated.

Euro Pressured by Energy Risks and Stronger Dollar

The euro remained under pressure as elevated oil prices amplified stagflation risks for the Eurozone while safe-haven flows supported the dollar.

Near-term direction may hinge heavily on PMI data and broader energy-price developments.

Dollar Supported by Safe-Haven Flows and Higher-for-Longer Fed Expectations

The US dollar remained firm as geopolitical tensions, elevated oil prices, and delayed Fed cut expectations reinforced support for the greenback.

Unless geopolitical tensions ease materially, USD may continue to benefit from both defensive flows and yield support.

Upcoming Economic Indicators

EUR – German Flash PMIs

Manufacturing Forecast: 51.4
Services Forecast: 50.4

German PMIs remain critical for gauging Eurozone growth momentum.

• Above forecast: Bullish EUR
• Below forecast: Bearish EUR
• In line: Neutral

GBP – UK Flash PMIs

Manufacturing Forecast: 50.3
Services Forecast: 50.0

These data will help shape expectations for Bank of England policy and near-term sterling direction.

• Above forecast: Bullish GBP
• Below forecast: Bearish GBP
• In line: Neutral

Trading Outlook

Markets remain caught between geopolitics, inflation repricing, and central bank expectations.

Key Themes to Watch

• USD strength driven by safe-haven demand and delayed Fed cut expectations
• Oil volatility fueled by Strait of Hormuz supply fears
• Gold consolidation as traders balance yields versus geopolitical support
• NZD strength from renewed RBNZ tightening bets
• EUR and GBP sensitivity to incoming PMI data