Global financial markets opened the week under intense pressure as investors reacted to escalating geopolitical tensions between the United States and Iran, surging oil prices, and growing uncertainty surrounding upcoming US inflation data. Safe-haven demand dominated trading activity across forex, commodities, and indices, while traders closely monitored the latest developments surrounding the Strait of Hormuz and Federal Reserve policy expectations.

Gold prices remained elevated near the 4,735 region after rallying toward fresh three-week highs, supported by rising geopolitical risks and renewed concerns over global inflation. Meanwhile, WTI crude oil surged toward the psychological 100-dollar level as fears of prolonged supply disruptions continued to drive volatility across energy markets.

The US Dollar stayed relatively resilient ahead of the highly anticipated US Consumer Price Index (CPI) release, with markets increasingly questioning whether the Federal Reserve will be able to deliver rate cuts later this year. At the same time, the Japanese Yen remained under pressure due to higher energy costs and continued US Dollar strength, while the Canadian Dollar found support from sharply rising crude oil prices.

XAU/USD Analysis – Gold Holds Strong as Safe-Haven Demand Accelerates

Gold prices continued consolidating near the 4,735 region as traders balanced rising geopolitical uncertainty against cautious Federal Reserve expectations ahead of the latest US inflation data.

The precious metal initially rallied sharply after President Donald Trump rejected Iran’s latest peace proposal, increasing fears that tensions surrounding the Strait of Hormuz could escalate further. The renewed uncertainty boosted safe-haven inflows into bullion while rising oil prices revived global inflation concerns.

Despite stronger-than-expected US payroll data reinforcing a higher-for-longer Federal Reserve narrative, gold managed to remain supported as investors increased defensive positioning ahead of the CPI release.

Technically, XAU/USD remains trapped in a broad consolidation structure. Price action continues hovering between major resistance near 4,880 and key support around 4,520. Narrowing Bollinger Bands indicate that volatility compression is building, potentially signaling a larger breakout ahead.

The RSI remains slightly bullish near 53, suggesting buyers still hold a mild advantage. However, the bearish MACD crossover highlights lingering downside risks if US inflation data surprises to the upside and strengthens the US Dollar further.

If inflation data weakens, gold could regain bullish momentum toward the 4,880 resistance region. Conversely, stronger CPI figures may trigger renewed selling pressure toward the 4,520 support zone.

USD/JPY Forecast – Yen Faces Pressure Despite Intervention Risks

USD/JPY remained under bearish technical pressure below the 157.70 resistance level as traders continued monitoring intervention risks from Japanese authorities and expectations for future Bank of Japan tightening.

Although stronger US Treasury yields and persistent Federal Reserve hawkishness continued supporting the US Dollar, the Japanese Yen avoided deeper losses due to ongoing speculation that Tokyo could intervene again if volatility intensifies.

Higher oil prices also continued weighing on the Yen because Japan remains heavily dependent on imported energy supplies. Rising geopolitical tensions between the US and Iran further complicated the outlook for Japanese policymakers.

From a technical perspective, USD/JPY continues trading below the 20 and 50 EMA levels, reinforcing medium-term bearish pressure. Bollinger Bands remain wide, indicating elevated volatility conditions, while the MACD histogram continues favoring downside momentum.

The pair now faces major resistance at 157.70 followed by 158.50, while downside support remains positioned near 152.60 and 150.40.

USD/CAD Analysis – Oil Prices Support the Canadian Dollar

USD/CAD remained trapped in a consolidation phase near the 1.3670 region as traders balanced stronger US Dollar fundamentals against renewed support for the Canadian Dollar from elevated crude oil prices.

The Canadian Dollar benefited from the latest surge in WTI crude prices after President Trump rejected Iran’s peace proposal, raising concerns that disruptions through the Strait of Hormuz may continue longer than expected.

While the broader technical structure for USD/CAD remains bearish, recent price action suggests markets are preparing for a larger directional move. Narrowing Bollinger Bands indicate reduced volatility conditions, while mixed MACD signals reflect uncertainty among traders ahead of critical inflation data.

The pair continues trading below the 50, 100, and 200 EMA levels, maintaining broader bearish momentum despite temporary stabilization near the middle Bollinger Band.

A sustained move above the 20 EMA could trigger a recovery toward 1.3935, while renewed selling pressure below 1.3580 may expose the deeper 1.3490 support region.

Oil Market Update – WTI Crude Nears $100 Amid Strait of Hormuz Fears

Oil markets remained highly volatile after the United States rejected Iran’s latest diplomatic response, reinforcing fears that disruptions through the Strait of Hormuz may continue.

WTI crude rallied aggressively toward the 100-dollar psychological level before consolidating near 98 dollars as traders reassessed global supply risks, tightening inventories, and broader inflation implications.

The latest geopolitical developments have significantly increased uncertainty across global energy markets, especially as traders monitor drone attacks near Qatar and continued regional military tensions.

At the same time, stronger Chinese trade data supported expectations for stronger global energy demand, further supporting crude oil prices.

US Dollar Outlook Ahead of CPI Data

The US Dollar remained relatively firm ahead of the latest CPI inflation release as traders reassessed Federal Reserve rate expectations following stronger labor market data and rising oil-driven inflation risks.

The US Dollar Index held near the 97.90–98.00 region as markets balanced safe-haven demand against concerns that persistent inflation could delay future Federal Reserve rate cuts.

Markets are now heavily focused on upcoming inflation data, which could become the next major catalyst for forex, gold, and broader financial market volatility.

A stronger-than-expected CPI print may reinforce the Federal Reserve’s higher-for-longer stance, boosting Treasury yields and supporting the US Dollar further. Meanwhile, weaker inflation figures could revive expectations for rate cuts later this year, potentially triggering renewed weakness in the Dollar and stronger upside momentum for gold and risk-sensitive currencies.