More than half of the rise in headline CPI was driven by energy — gasoline jumped 7% month-on-month. That is understandable: a closed Strait of Hormuz, the war with Iran and elevated oil prices. However, the only bright spot in the report was the core measure: excluding food and energy, prices rose just 0.2% month-on-month — below forecasts. Food prices increased only 0.1%; beef, tomatoes and cheese actually fell. Transportation services, health insurance and new car prices also declined. This gives the Fed a formal argument for a pause — but only a formal one.

The problem is that even if the war ends quickly, inflationary pressure will not vanish. Economists warn of a wave of second-round effects: fertilizer market disruptions will ultimately push up food prices, higher transport costs will pass through the entire consumer-goods chain, and rebuilding oil inventories will take months. In other words, reopening the Strait of Hormuz would not bring rapid relief to household budgets.

This is an extremely awkward scenario for the Fed. The June 16–17 meeting — the first under Kevin Warsh's leadership — is highly likely to end in a pause given the geopolitical uncertainty. Yet markets are already pricing in a rate hike by year-end, and the May report has only reinforced that view.

Core inflation running below expectations gives Warsh room for caution, but headline CPI at 4.2% combined with falling real wages is a politically and economically toxic mix.

All of this suggests that, despite a modest pick-up in demand for risk assets, the US dollar is still likely to be in demand among large traders and market participants.

The reason is a qualitative change in the market environment: the development of spot ETFs, rising institutional demand and a much more mature market infrastructure create a new type of support that simply did not exist in prior bear cycles. Grayscale's conclusion is unequivocal: current levels may be attractive for long-term accumulation of Bitcoin.

The thesis aligns well with CryptoQuant data, which last week reported that the share of Bitcoin supply in losses reached 50% — historically, this has coincided with periods of market capitulation and cycle lows. Considering that Bitcoin has not fallen for a week despite seventeen consecutive days of ETF outflows, and is showing greater resilience than the S&P 500, which is uncommon for an asset usually considered correlated with tech stocks — the chances that the market is finding a bottom are reasonably good.

Strategy, after a symbolic sale of 32 coins, returned to buying and added 1,550 BTC. Tom Lee holds 5.4 million Ethereum and calls the moment "crypto-spring." The combination of these signals indicates that large, long-term capital is beginning to take current levels seriously.

Trading recommendations

Bitcoin

Buyers are currently targeting a return to $63,600, which opens a clear path to $65,800, and from there $67,700 is within easy reach — a breach of which would signal attempts to reestablish a bull market. In case of a decline, buyers are expected at $61,100. A return of the instrument below that area could quickly push BTC toward $59,600. The most distant target would be the $58,200 area.

Ethereum

A clear hold above $1,686 opens a direct route to $1,763. The most distant target is the high around $1,838; clearing that would signal strengthening bullish sentiment and a return of buyer interest. On the downside, buyers are expected at $1,615. A return below that area could quickly drive ETH toward $1,557. The furthest target would be the $1,496 area.

What's on the chart

• The red lines represent support and resistance levels, where the price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.

An important development came yesterday: Tehran announced the complete closure of the Strait of Hormuz to all vessels in response to US strikes. If implemented in full, the market would face a fundamentally new situation — not the partial blockade that has lasted four months, but a full cutoff of the waterway that in peacetime carried roughly one-fifth of global oil and LNG shipments. That announcement triggered sharp moves across asset classes.

The paradox for gold remains. The metal is 22% below pre?war levels even though, by classic logic, it should serve as a safe haven. The reason is the same: the war has accelerated inflation, inflation pushes rates up, and higher rates weigh more heavily on a non-yielding metal than geopolitical fear supports it. The US CPI for May, released on Wednesday, reinforced this dynamic: a 4.2% year-on-year increase — the highest since early 2023 — outpacing wage growth.

A technical point important for traders: the recent drop below the 200-day moving average triggered additional algorithmic selling — a level large funds use when making positional decisions. In other words, the selling is driven not by a changed view on the metal but by the need for liquidity.

Silver is up 1% to $63.96. Platinum and palladium are also trading higher.

Technical outlook for gold

Buyers need to reclaim the nearest resistance at $4,127. That would target $4,186, above which further breakthroughs would be rather difficult. The next, more distant target is the $4,249 area. On the downside, bears will try to take control below $4,062. If they succeed, a range breakout would deal a serious blow to bulls and push gold toward a low of $4,008 with a prospect of reaching $3,954.

Today, markets are already bouncing after two heavy sessions. S&P 500 futures are up about 0.7%, recovering from a five-week low, while Nasdaq 100 futures are +1.1%. European bourses opened roughly 0.5% higher, led by energy names. The catalyst was the end of US strikes on Iran: US Central Command said the defensive strikes were halted roughly four hours after they began. Brent eased about 2.6% to below $93/bbl.

That said, this cannot yet be called a definitive reversal. In an interview, Trump warned the US will strike Iran again if Tehran does not sign a temporary peace deal. This is the second round of strikes in two days — the first followed the downing of a US helicopter; the second reinforced the signal.

It is clear that Trump's rhetoric alone has not previously produced results with Iran, so the market is rightly cautious about words turning into durable outcomes. The futures buying suggests traders are hoping that a quick end to the strikes means both sides will return to the negotiating table — but that remains a hope, not a fact.

A separate market story today is the SpaceX IPO. The offering was oversubscribed by more than four times the available float. For markets, this is a mixed signal: on one hand, it proves investor appetite for AI/tech stories remains extremely strong; on the other, a record-sized IPO — at a rich valuation — forces investors to reallocate capital: selling other positions, reducing leverage and freeing liquidity. That concentrated capital shift is exerting short-term pressure across risk assets.

Also on the calendar today is the ECB meeting — the first rate increase since 2023 is widely regarded as likely. The key event will be Christine Lagarde's comments on the policy path and how the bank views the inflation outlook against the backdrop of the ongoing Middle East conflict.

Technically, the S&P 500 analysis suggests that the immediate task for buyers is to overcome the resistance level of $7,339. Doing so would confirm further upside and open the path to $7,355. Maintaining control above $7,381 would further strengthen buyers' positions. On the downside, buyers need to defend the $7,300 area. A break below that level would likely push the index back to $7,279 and open the way to $7,256.

Currently, the market expects the outcome of the ECB meeting to be an increase in the key interest rate by 0.25%, from 2.15% to 2.40%. This raises an important question: will this decision support the strengthening of the euro in the Forex market or not?

Logically, raising borrowing costs should be viewed as a demand-stimulating factor for the euro, but will it be so? Why is the ECB raising rates?

Of course, this relates to the desire to limit inflation growth in the euro area, which began to rise actively in February, and this trend has only intensified since then, reaching 3.2%. The main reason for this should be viewed primarily as the political actions of European leaders, who, as Euro officials have repeatedly stated, are waging war against Russia over the Ukrainian crisis, thereby exhausting their own economies. However, while it was previously possible to keep inflation around 2% before the events in the Middle East, Donald Trump's arbitrary actions there have led to a sharp rise in oil prices and shortages, resulting in a chain reaction of price increases across Europe.

But let's return to the issue of demand for euros resulting from the interest rate hike. It is necessary to understand that currencies do not exist in a vacuum; they are quoted relative to others and are also influenced by the state of national economies, inflation, GDP dynamics, unemployment, and, of course, the manipulation of interest rates by national central banks.

For example, in the EUR/USD pair, its upward or downward movement is influenced not only by factors affecting the euro but also by those affecting the dollar. And here, things are not so simple and straightforward. Additionally, it is essential to consider characteristic market behaviors, one of which is the concept of expectations regarding certain events. If the market believes with high probability that rates will be raised, it begins to factor this in ahead of time with Euro purchases, and the same applies to the dollar. In fact, this is the situation we have observed lately, and only unexpectedly positive news from the labor market caused the pair to drop by more than one figure or 100 pips.

Thus, the mere fact of the rate hike is already priced in, and, for example, a "dovish" stance on future rates from Christine Lagarde at the press conference following the meeting may, conversely, weaken the euro against the dollar. We saw something similar yesterday after the publication of the US inflation report, which came in line with expectations. On this wave, the dollar observed slight weakening, but no more than that.

Another factor working against the euro is the Middle Eastern conflict, which unequivocally supports the dollar against major currencies in Forex.

What to Expect in the Markets Today?

I believe the ECB's interest rate decision is unlikely to support the euro. The market may even follow the "buy the rumor, sell the news" rule in this case. The euro may primarily resume its decline against the dollar towards the 1.1500 mark or even lower.

Forecast for the Day:

EUR/USD

The pair is consolidating within a narrow range above the support level of 1.1525, awaiting the ECB's final monetary policy decision. A drop in the pair below this level could lead to a decline first to 1.1480 and then to 1.1420. In this scenario, it is advisable to sell gold at 4290.20.

GBP/USD

The pair is also consolidating at 1.3375. A price drop below this level may lead to a decline toward 1.3310. A level for selling the pair could be 1.3363.

Meanwhile, outflows from spot Bitcoin ETFs continue for the seventeenth consecutive day — a drop of $77.4 million yesterday and a decrease of $40.9 million from Ethereum ETFs. Among altcoins, only XRP (+$7.4 million) and SOL (+$749,000) showed any slight movement; everything else is at zero. Total outflows since mid-May have already exceeded $5.4 billion, and yesterday continued this trend. However, there appears to be an interesting contradiction in the data: despite ongoing institutional pressure, Bitcoin has not dropped for a week. Seventeen red days in ETFs, and yet the price remains stable. This atypical behavior deserves attention.

A more telling comparison can be made with the stock market. Bitcoin has held up significantly better than the S&P 500 over the past week, even as the S&P 500 faces its own pressures amid inflationary turbulence — the CPI data for May showed a year-over-year rate of 4.2%, the highest since April 2023. Rising inflation is typically a negative factor for risk assets; however, Bitcoin does not follow its usual correlation with the Nasdaq this time. Possible explanations include major long-term buyers quietly absorbing selling pressure, preventing the price from declining.

The resolution may come from several fronts simultaneously. The Federal Reserve meeting on June 16-17 under new Chairman Kevin Warsh will signal to the market the future of monetary policy — and if the central bank takes a tough stance, pressure on risk assets will intensify.

Bitcoin

Buying Scenario

Scenario #1: I plan to buy Bitcoin today upon reaching an entry point around $63,000 with a target growth to the level of $64,300. Near $64,300, I will exit my buy positions and sell immediately for a pullback. Before buying on a breakout, ensure that the 50-day moving average is below the current price and that the Awesome indicator is above zero.

Scenario #2: Bitcoin can also be purchased from the lower boundary of $62,400 if there is no market reaction to a breakout above it, targeting levels $63,300 and $64,300.

Selling Scenario

Scenario #1: I plan to sell Bitcoin today after reaching an entry point around $62,400, targeting a drop to $61,300. Near $61,300, I will exit my sell positions and buy immediately for a pullback. Before selling on a breakout, ensure that the 50-day moving average is above the current price and that the Awesome indicator is below zero.

Scenario #2: Bitcoin can also be sold from the upper boundary of $63,000 if there is no market reaction to a breakout above, targeting levels $62,400 and $61,200.

Ethereum

Buying Scenario

Scenario #1: I will buy Ethereum today at an entry point around $1,662, targeting $1,688. Near $1,688, I will exit my buy positions and sell immediately for a pullback. Before buying on a breakout, ensure that the 50-day moving average is below the current price and that the Awesome indicator is above zero.

Scenario #2: Ethereum can also be bought from the lower boundary of $1,641 if there is no market reaction to a breakout above it, targeting levels $1,662 and $1,688.

Selling Scenario

Scenario #1: I plan to sell Ethereum today at an entry point around $1,641, targeting a drop to $1,615. Near $1,615, I will exit my sell positions and buy immediately for a pullback. Before selling on a breakout, ensure that the 50-day moving average is above the current price and that the Awesome indicator is below zero.

Scenario #2: Ethereum can also be sold from the upper boundary of $1,662 if there is no market reaction to a breakout above, targeting levels $1,641 and $1,615.

The price test at 160.39 coincided with the moment when the MACD indicator had moved significantly below the zero mark, limiting the pair's downward potential. The second test of this price led to the implementation of scenario #2 for buying dollars, resulting in a 20-pip increase in the pair.

The rise in overall inflation in the US to 4.2% in May is a significant indicator warranting close attention. However, the lower core inflation figure, which excludes fluctuations in energy and food prices, suggests potential stability in inflation expectations among consumers and businesses alike. This is reflected in the absence of a pronounced strengthening of the dollar and the decline of the Japanese yen. Furthermore, the global geopolitical risks arising from the Middle East will continue to influence appetite for risk or safe-haven assets.

Going forward, the trajectory of USD/JPY will also depend on the Bank of Japan's currency interventions, as a level above 160 clearly exceeds the central bank's strategy. However, considering that an upcoming BoJ meeting will discuss an interest rate hike, it is unlikely that any emergency measures will be taken for now.

As for the intraday strategy, I will rely more on implementing scenarios #1 and #2.

Buying Scenarios

Scenario #1: I plan to buy USD/JPY today upon reaching an entry point around 160.61 (green line on the chart) with a target growth to the level of 160.95 (thicker green line on the chart). At point 160.95, I plan to exit the market and open short positions in the opposite direction, expecting a move of 30-35 pips from the entry point. It is best to return to buying the pair during corrections and significant dips in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 160.47, at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. One can expect growth to the opposite levels of 160.61 and 160.95.

Selling Scenarios

Scenario #1: I plan to sell USD/JPY today only after the level of 160.47 (red line on the chart) is updated, which will lead to a rapid decline in the pair. The key target for sellers will be 160.14, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a move of 20-25 pips in the opposite direction from that level). Sellers may return at any moment; a hint from the central bank is all that is needed. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the price at 160.61, at a time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. One can expect a decline to the opposite levels of 160.47 and 160.14.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.

The price test at 1.3404 coincided with the moment when the MACD indicator had moved significantly upward from the zero mark, limiting the pair's upward potential. For this reason, I did not buy the pound.

Ambiguous signals in yesterday's US annual inflation data prevented the dollar from showing its full strength. The figure reached 4.2% in May, the highest in three years and the first since the beginning of 2023 when inflation surpassed the four percent barrier again. The key factor curbing the expected volatility in the currency market has been a more moderate trend in core inflation. This figure, which excludes the most volatile components such as energy prices and food, exhibited much calmer behavior: 2.9% year-over-year and only 0.2% growth month-over-month. Such a dichotomy between overall and core inflation creates a complex puzzle for analysts and, as a result, prevents the dollar from making a significant leap.

Today's trading session is again proceeding in a state of relative calm, devoid of any significant macroeconomic releases from the UK itself. The lack of new reports capable of shaking up the market deprives the British pound of substantial arguments for a significant strengthening against the US dollar. In such a situation, where catalysts for pronounced movement are absent, the pound will likely be forced to settle for moderate fluctuations, reacting to general market sentiment and the dynamics of the US currency.

As for the intraday strategy, I will rely more on implementing scenarios #1 and #2.

Buying Scenarios

Scenario #1: I plan to buy the pound today upon reaching an entry point around 1.3391 (green line on the chart) with a target growth to the level of 1.3434 (thicker green line on the chart). At point 1.3434, I intend to exit the market and open short positions in the opposite direction, expecting a move of 30-35 pips from the entry point. One can only expect growth in the pound today within the framework of a correction. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy the pound today in the event of two consecutive tests of the price at 1.3371, at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. One can expect growth to the opposite levels of 1.3391 and 1.3434.

Selling Scenarios

Scenario #1: I plan to sell the pound today after updating the level at 1.3371 (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be 1.3331, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Pressure on the pound could return at any moment. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario #2: I also plan to sell the pound today in the event of two consecutive tests of the price at 1.3391, when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. One can expect a decline to the opposite levels of 1.3371 and 1.3331.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.

The price test at 1.1562 coincided with the moment when the MACD indicator was just starting to move upward from the zero mark, confirming the correct entry point for buying euros; however, a significant rise in the pair did not occur.

Recent events in the Middle East, related to the escalation of relations between the US and Iran, once again triggered a noticeable surge in the US dollar.

Today promises to be eventful for the currency market, especially for the euro. The publication of the European Central Bank's decision on the main interest rate, scheduled for today, is a focus for analysts and traders. Alongside this, the press conference by ECB President Christine Lagarde will provide an opportunity to gain a deeper understanding of monetary policy prospects.

Most market participants expect the ECB to raise the key interest rate by 0.25%. If implemented, this step would be a logical continuation of efforts to curb inflation in the eurozone, which remains elevated. However, beyond the mere fact of the hike, it will be critical to analyze Lagarde's rhetoric. Market participants will be closely searching for any hints regarding the ECB's future steps. Will this be a one-time decision, or does the bank intend to continue the cycle of tightening monetary policy in the near future? Answers to these questions could significantly impact the long-term trends of the EUR/USD pair.

As for the intraday strategy, I will rely more on implementing scenarios #1 and #2.

Buying Scenarios

Scenario #1: Today, euro purchases can be made upon reaching a price of around 1.1557 (green line on the chart), with a target to reach 1.1594. At point 1.1594, I plan to exit the market and also sell euros in the opposite direction, expecting a move of 30-35 pips from the entry point. One can only expect euro growth after good data from the eurozone. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy euros today in the event of two consecutive tests of the price at 1.1540, at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. One can expect growth to the opposite levels of 1.1557 and 1.1594.

Selling Scenarios

Scenario #1: I plan to sell euros once the price reaches 1.1540 (the red line on the chart). The target will be 1.1505, where I plan to exit the market and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Pressure on the pair today will return only in case of very weak data. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario #2: I also plan to sell euros today in the event of two consecutive tests of the price at 1.1557, when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. One can expect a decline to the opposite levels of 1.1540 and 1.1505.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.

Useful links:

My other articles are available in this section

InstaForex course for beginners

Popular Analytics

Open trading account

Important:

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

#instaforex #analysis #sebastianseliga

As the report indicates, the acceleration in overall inflation to 4.2% in May is a signal that cannot be ignored. Historically, such an inflation level typically suggests a potential rate hike by the Federal Reserve, and consequently, a strengthening of the national currency. However, given the current situation, where core inflationary pressures remain noticeably more subdued, the market appears to view this acceleration as a temporary phenomenon driven by developments in the Middle East.

The softer core inflation, which excludes volatile food and energy prices, indicates that inflation expectations among consumers and businesses may be more stable. This gives the Fed some degree of leeway in its actions.

Today, traders are in a state of heightened anticipation, as the publication of the European Central Bank's decision on the main interest rate, along with the subsequent press conference by ECB President Christine Lagarde, promises to be a key event of the day. All eyes are on Frankfurt, where another step towards normalizing inflationary pressure is expected—a 0.25% rate hike. Although this move is anticipated, it is traditionally interpreted as a positive signal for the euro, potentially contributing to its strengthening against major world currencies.

The anticipated tightening of European Central Bank monetary policy reflects the central bank's desire to curb inflationary pressure, which, despite some signs of stabilization, remains a focal point. The rate hike aims to make borrowing more expensive, thereby cooling consumer demand and investment activity, which in turn should help slow price growth. For the euro, a currency whose value is largely determined by interest rate differentials against others, rising interest rates serve as an undeniable trigger.

The key moment, apart from the rate decision itself, will be Christine Lagarde's press conference. It is here that market participants will look for confirmation of the ECB's future intentions, as well as the tone and rhetoric that may set the direction for the euro's movement in the coming weeks.

The absence of significant macroeconomic data from the United Kingdom today leaves the GBP/USD pair once again devoid of internal catalysts for a substantial recovery. The geopolitical situation in the Middle East remains the primary factor influencing sentiment in the GBP/USD currency pair.

If the data aligns with economists' expectations, it would be better to act based on the Mean Reversion strategy. If the data significantly exceeds or falls short of economists' expectations, it is best to utilize the Momentum strategy.

Momentum Strategy (Breakout):

For the EUR/USD Pair:

• Long positions on the breakout of the level 1.1556 could lead to the euro rising toward 1.1579 and 1.1601.
• Short positions on the breakout of the level 1.1529 could lead to the euro falling toward 1.1506 and 1.1480.

For the GBP/USD Pair:

• Longs on the breakout of the level 1.3400 could lead to the pound rising toward 1.3435 and 1.3471.
• Shorts on the breakout of the level 1.3370 could lead to the pound falling toward 1.3336 and 1.3307.

For the USD/JPY Pair:

• Longs on the breakout of the level 160.60 could lead to the dollar rising toward 160.90 and 161.15.
• Shorts on the breakout of the level 160.45 could lead to the dollar declining toward 160.24 and 160.00.

Mean Reversion Strategy (Return):

For the EUR/USD Pair:

• Shorts will be sought after an unsuccessful breakout above 1.1565 on a return below this level.
• Longs will be sought after an unsuccessful breakout above 1.1530 on a return to this level.

For the GBP/USD Pair:

• Shorts will be sought after an unsuccessful breakout above 1.3399 on a return below this level.
• Longs will be sought after an unsuccessful breakout above 1.3360 on a return to this level.

For the AUD/USD Pair:

• Shorts will be sought after an unsuccessful breakout above 0.7019 on a return below this level.
• Longs will be sought after an unsuccessful breakout above 0.6994 on a return to this level.

For the USD/CAD Pair:

• Shorts will be sought after an unsuccessful breakout above 1.3957 on a return below this level.
• Longs will be sought after an unsuccessful breakout above 1.3924 on a return to this level.

'I love the inflation'

Pentagon chief promises airstrikes

Kevin Warsh turns hawkish

The newly appointed head of the US central bank, Kevin Warsh, faces a paradoxical macroeconomic reality. Despite his reputation as a strict monetarist, the White House backed his candidacy in the hope he would deliver a sharp easing in borrowing costs — yet current metrics point to the opposite scenario. Rather than cooling, the national economy shows strong acceleration:

• Atlanta Fed estimates GDP is growing around 3%
• equity markets are charging to historic highs supported by fiscal stimulus
• unemployment sits at a comfortable 4.3%

The primary problem remains inflation, which has picked up due to higher oil prices. Warsh's prior rhetoric — that total digitalization and AI adoption would naturally suppress price growth — is losing traction in expert circles. A large surge of investment is adding to price pressure, making near-term monetary easing unlikely. Attempts to rely on balance sheet reduction have been judged by analysts as insufficient to tame inflation.

Goldman Sachs revises forecasts

Analysts at Goldman Sachs have radically reassessed their projections for the Fed funds path, effectively removing the probability of rate cuts this year. The bank now pushes the first rounds of easing out to June and December 2027, having previously expected the process to start in late 2026. The decision followed shocking May US labor market data that stunned markets: instead of the modest consensus of 88k jobs, US employers added 172k positions, materially outperforming April's subdued print.

Against that backdrop, the unemployment rate showed notable stability, prompting Goldman Sachs to pre-emptively lower its year-end unemployment forecast from 4.6% to 4.4%. Fresh macro releases have triggered tectonic shifts in investor sentiment, forcing the bond market to price in a 25bp hike by year-end. Strong payrolls sparked heavy selling in government bonds and sent the Nasdaq 100 down by more than 5%.

On this basis, investors expect next week's FOMC meeting (June 16–17) under chair Kevin Warsh to abandon any language hinting at near-term easing. Analysts anticipate an updated, more hawkish policy narrative on inflation and rates. That stance would be consistent with the fresh May CPI data.

Hike odds double on AI boom

David Mericle, chief US economist at Goldman Sachs, stated that the current state of the domestic labor market eliminates the need for Fed easing. In response, the bank sharply downgraded its probabilities:

• confidence in the baseline scenario fell to 30%
• the risk of a resumed rate-hike cycle jumped to 20%

Goldman splits the remaining probability roughly evenly between a no-change outcome and a recessionary scenario. The main drivers entrenching a high-rate environment are:

• new import tariffs
• the Middle East crisis
• massive AI investments

Goldman Sachs projects core PCE — recorded at 3.3% in April — will remain above the 3% threshold through year-end and return toward the 2% target only next year as wage-growth momentum and rental pressures cool.

President Trump, meanwhile, publicly criticized potential Fed tightening. In an interview on NBC's Meet the Press, he flatly rejected the logic that strong economic data should trigger rate increases. Trump lamented that strong macro prints induce market panic over monetary policy and demanded immediate rate cuts. He argued that America's industrial strength can contain inflation, while expensive borrowing would complicate service of the sovereign debt and block key budget priorities, including major defence and industrial investments. Despite formal acknowledgements of Kevin Warsh's independence, the White House's increasingly frequent attacks reflect deep administration anxiety over the Fed's hawkish pivot.

Dollar rockets higher

Analysts at BMO Capital Markets call buying the US dollar the most advantageous tactic in an environment of entrenched inflation and high borrowing costs. The powerful momentum behind the greenback came from unexpectedly strong May labor market data, which showed the best dynamics in months. BMO strategists argue it is premature to price in a near-term end to the US-Iran standoff. Even a hypothetical fall in the oil price would not instantly relieve inflationary pressure because secondary effects are already propagating through the economy.

Fundamental market relationships now strongly favor a persistently tight policy stance and dollar dominance. Added support comes from the overall resilience of the US macroeconomy. Accordingly, BMO is running aggressive long dollar positions vs. the euro, sterling, yen, as well as the Australian and Canadian dollars. Markets reasonably expect the economic divergence and expensive money to continue channeling liquidity into US assets — a view Bloomberg has corroborated.

BofA sounds alarm

Bank of America analysts have flagged worrying technical signals in Wall Street's tech segment, warning large capital holders of the risk of a material drawdown and urging urgent portfolio protection. Despite local attempts by the Nasdaq 100 to rebound from Friday's lows, the index remains precariously positioned. BofA strategists note that the extended rally — which pushed the index above the psychological 30,000 mark — looks overstretched and disconnected from fundamentals. The RSI entered deep overbought territory and has since rolled over, producing a classic weekly bearish-engulfing pattern on the charts.

The recent advance has been driven largely by aggressive buying of semiconductor giants. Quant models point to critical overheating in that cohort, which raises the risk of a volatility spike. A case in point is the VanEck Semiconductor ETF: its RSI has eased from extreme readings, and historical precedent shows such unwindings in the chip industry often precede substantive corrections. Bank of America concludes that the current risk-reward profile is clearly skewed against buyers.

June 11

June 11, 02:01 / UK / *** / RICS house-price balance for May / prev.: -25% / actual: -34% / consensus: -31% / GBP/USD – up

The RICS house-price balance in the UK fell in May to its weakest level in years amid a pronounced regional slowdown and Bank of England warnings that interest rates may need to be raised to fight oil-driven inflation. Despite the sharp drop in the current indicator, short-term price expectations among market participants have begun to stabilize. The May report projects a partial moderation in the downturn to -31%. If the print matches that forecast, sterling should strengthen.

June 11, 04:00 / Australia / *** / Consumer inflation expectations (leading indicator) for June / prev.: 5.9% / actual: 5.6% / consensus: 6.5% / AUD/USD – up

Australian consumer inflation expectations eased to 5.6% in May, retreating from multi-year highs, although concerns persist over commodity-driven price pressures amid the Middle East conflict and the RBA's hawkish stance. The leading June survey anticipates a sharp pickup to 6.5%. If realized, that would point to rising pro-inflationary risks and support the Australian dollar.

June 11, 15:15, 15:45 / Eurozone / *** / ECB rate decision, press conference / prev.: 2.15% / actual: 2.15% / consensus: 2.40% / EUR/USD – up

The ECB meeting is widely expected to lift the policy rate to 2.40% in response to accelerating inflation following logistical and energy shocks. All eyes will be on Christine Lagarde's press conference. Her rhetoric will be key to gauging the bank's readiness for further tightening. A print in line with consensus would lead to a stronger euro.

June 11, 15:30 / Germany / ** / Building permits, April (m/m) / prev.: -7.8% / actual: 10.3% / consensus: -3.5% / EUR/USD – down

Total building permits previously showed a strong rebound, rising 10.3% driven by institutional and industrial projects that fully offset weakness in residential construction. The April consensus expects the indicator to return to negative territory at -3.5%. Confirmation of that forecast would signal renewed cooling in construction investment and weigh on the euro.

June 11, 15:30 / US / ** / Initial jobless claims (weekly) / prev.: 212k / actual: 225k / consensus: 219k / USDX (6-currency dollar index) – up

Initial claims for unemployment benefits rose to 225k at the end of May, a year-to-date high. Despite the pickup in new claims, continuing claims declined, keeping the overall labor market picture within long-run averages. The weekly consensus expects claims to fall to 219k. If the actual matches expectations, this would confirm labor market resilience and support the US dollar.

June 11, 15:30 / US / *** / Producer price inflation for May (y/y) / prev.: 4.3% / actual: 6.0% / consensus: 6.4% / USDX (6-currency dollar index) – up

Producer prices accelerated sharply to 6.0% y/y in April, the highest level in years. The wholesale price surge was driven by:

• an energy shock linked to the Iran conflict
• higher warehousing and transportation costs

In the May report, analysts forecast a rise to 6.4%. If realized, this would signal further cost pressures in industry and be dollar-positive.

June 12

June 12, 07:30 / Japan / ** / Industrial production, April / prev.: 0.4% / actual: 2.4% / consensus: 2.3% / USD/JPY – up

Industrial production in Japan showed a solid expansion in the prior period, rising 2.4% year-on-year. The local pickup in industrial activity still remains below long-run historical averages. The April report is expected to show a slight moderation to 2.3%. A print in line with consensus would confirm a stabilization of the industrial momentum and weigh on the yen.

June 12, 09:00 / Germany / ** / Consumer inflation, May (y/y) / prev.: 2.7% / actual: 2.9% / consensus: 2.6% / EUR/USD – down

Headline consumer inflation in Germany is expected to ease to 2.6% year-on-year in May, retreating from a multi-month peak as food and energy prices moderate. At the same time, services inflation has resumed, keeping the overall index above the ECB's target. A confirmed 2.6% print would signal a consolidation of current price dynamics and likely weigh on the euro.

June 12, 09:00 / UK / *** / GDP growth, April (y/y) / prev.: 1.0% / actual: 1.2% / consensus: 1.3% / GBP/USD – up

UK economic growth accelerated to 1.2% year-on-year in March, marking the strongest pace in three quarters. April GDP is forecast to rise to 1.3%. A print matching consensus would confirm the resilience of the domestic recovery and support sterling.

June 12, 09:00 / UK / *** / Industrial production, April (y/y) / prev.: -0.5% / actual: 0% / consensus: -0.1% / GBP/USD – down

UK industrial production showed near-zero year-on-year dynamics in March, recovering from prior weakness but falling short of earlier market estimates. Output in the industrial sector remains well below long-run averages. The April consensus expects a slight dip to -0.1%. Confirmation would signal a renewed cooling in industrial investment and weigh on the pound.

June 12, 17:00 / US / *** / University of Michigan consumer sentiment index, June (lead) / prev.: 49.8 / actual: 44.8 / consensus: 46.0 / USDX (6-currency index) – up

The University of Michigan consumer sentiment index plunged to a record low of 44.8 in May amid a sharp rise in living costs and gasoline prices. The largest drop in confidence was recorded among the most economically vulnerable households, accompanied by worsening long-term inflation expectations. The leading June release is expected to show a partial recovery to 46.0. If realized, that would indicate a local improvement in household sentiment and support the dollar.

June 12, 17:00 / US / ** / Preliminary consumer expectations index, June (lead) / prev.: 48.1 / actual: 44.1 / consensus: 44.3 / USDX (6-currency index) – up

The US consumer expectations index fell to a historic low of 44.1 in May, extending the negative trend of recent months. Current household sentiment about the economic outlook remains well below long-run averages. The June lead estimate is expected to tick up slightly to 44.3. Aconfirmed rise would signal a pause in the slide of consumer confidence and back the dollar up.

June 11, 12:00 / Eurozone / Speech by Sharon Donnery, ECB Supervisory Board / EUR/USD

June 11, 15:45 / Eurozone / Speech by Christine Lagarde, President of the European Central Bank / EUR/USD

June 12, 17:30 / Eurozone / Speech by Joachim Nagel, ECB Governing Council / EUR/USD

Speeches by senior central bank officials are also on the agenda this week. Their remarks typically move FX markets because they can signal the regulators' next steps on policy rates.

The economic calendar is available via the link. All indicators are shown year-on-year (y/y); monthly figures are noted as (m/m). Trade balance, exports, and imports are reported in the country's currency. An asterisk (*) denotes the relative importance of the release (in ascending order) for assets available on the InstaForex platform. Publication times are given in Moscow time (MSK, GMT+3:00). Open a trading account here. See also InstaForex market video news. For convenient access to instruments, download the MobileTrader app.

Meanwhile, experts continue to insist that Bitcoin is at the "bottom" or close to it. Analysts from various firms note that more than half of Bitcoin coins are currently at a loss, which in itself indicates the formation of a "bottom," as similar patterns were observed in 2011, 2018, and 2022. In those cases, Bitcoin reached its lowest value in the cycle within a month, demonstrating further declines of 15-25%, and then began to establish a "bullish" trend. Analysts also point out that Bitcoin has dropped to the 200-day moving average, which serves as a marker for "bearish" cycles, and that the fear-and-greed index has plummeted to its lowest level. All this "indicates the proximity of the end of the downward trend."

We do not find such conclusions and predictions convincing. What prevents institutions from continuing to channel capital into the AI sector? What stops Tehran and Washington from continuing the war for several more months or years? What prevents inflation in the US from continuing to rise, forcing the Fed to prepare for not just one tightening of monetary policy in 2026, but for several? It's important to remember that historical models eventually stop working. Typically, in the first year after a "halving," Bitcoin has shown significant growth, but in 2025, this pattern ceased to hold. Bitcoin cannot rise indefinitely. We are not opponents of a new upward trend, but we consider such foundations to be a common attempt to present wishes as realities. Many experts are investors in the first cryptocurrency themselves and thus are interested parties. For example, it is beneficial for Kathy Wood or, even more so, Michael Saylor if Bitcoin only appreciates. And for that to happen, they need to convince other market participants of the inevitability of growth, prompting them to buy rather than sell and triggering a new bullish impulse.

Trading Recommendations for BTC/USD:

On the daily timeframe, Bitcoin has resumed forming a downward trend. The structure of the trend is identified as downward, and the CHOCH line has been moved to $82,800, as a new LL (Lower Low) has been formed. Only above this level can we consider that the downward trend is over. Since there are still no signs of an upward trend reversal, we believe the decline will continue. A new bearish FVG has formed in the $68,000 - $70,700 range. If desired, other FVG can be identified during Bitcoin's current decline, but this one is the most obvious. Thus, new sell signals may be formed within this pattern in the future.

Trading Recommendations for ETH/USD:

On the daily timeframe, the formation of a downward trend, which began in August of last year, continues. The key pattern for selling has been and remains a bearish order block on the weekly timeframe. As we previously warned, the movement triggered by this signal can be strong and prolonged. We do not believe it has ended, as there are no signs of a downward trend's completion for either Bitcoin or Ethereum. In the near future, Ethereum may resume its decline with targets at $1,391 and $788. An upward correction can be expected when at least some bullish pattern or other signs of a price reversal to the upside are formed on at least the 4-hour timeframe. Among the new POI areas for short positions, we note the FVG in the $1,624-$1,720 range. If this pattern is ignored, traders will receive a signal for a correction.

Notes on Illustrations:

• CHOCH – Change in trend structure.
• Liquidity – Stop Loss, pending orders used by market makers to build their positions.
• FVG – Fair Value Gap. Price moves rapidly through such areas, indicating a complete lack of one side in the market. Subsequently, the price tends to return and respond to these areas in continuation of the main trend.
• IFVG – Inverted Fair Value Gap. After returning to such an area, the price does not react to it but breaks through impulsively before testing it from the other side.
• OB – Order Block. A candle in which a market maker opened a position to acquire liquidity to form their own position in the opposite direction.

There are very few macroeconomic reports scheduled for Thursday. The only noteworthy report is the US Producer Price Index (PPI), which is significant for the market but carries little weight after the inflation report published the day before. The PPI will indicate how quickly producers are raising prices due to the energy crisis, and, of course, this data will later be reflected in overall inflation. However, we already know that inflation in the US continues to accelerate, while the Federal Reserve remains silent. Therefore, this report is unlikely to elicit any market reaction today. In the UK, the European Union, and Germany, the event calendars are completely empty.

Analysis of Fundamental Events:

Among the fundamental events on Thursday, the European Central Bank meeting and Christine Lagarde's speech are noteworthy. It is essentially already known that the ECB will raise all three key rates by 0.25%. This decision has been known for over a week. However, the market is ignoring this event, just as it is ignoring many other fundamental and macroeconomic events. Therefore, we believe that the ECB meeting and its "hawkish" decision will not impact the euro's exchange rate; any reaction may be merely formal.

The geopolitical backdrop still leaves much to be desired, as Iran and the US have once again edged closer to renewed conflict amid failed negotiations. Talks between Washington and Tehran are interrupted, both sides continue to regularly violate the terms of the truce, and Iran consistently refutes any peace rhetoric from Trump. The new week began with reciprocal shelling in the Middle East, Iran shooting down an American helicopter over the Strait of Hormuz, US attacks on Iranian coastal infrastructure, and Iranian missile strikes on Bahrain, Jordan, and Kuwait. Judge for yourself how close Tehran and Washington are to a peace agreement...

General Conclusions:

During the penultimate trading day of the week, both currency pairs may trade quite actively, given that it is the day of the ECB meeting. However, we doubt that the market will respond to this event as it should. The euro can be traded today from the area of 1.1527-1.1531, while the British pound can be traded from the area of 1.3380-1.3386. Geopolitics remains the key influencing factor in the currency market.

Basic Rules of the Trading System:

1. The strength of a signal is evaluated based on the time it takes to form (bounce or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened at a particular level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair may generate many false signals or none at all. Technical levels may be overlooked.
4. On the hourly timeframe, trading signals from the MACD indicator should be executed only when volatility is good, and a trend is confirmed by a trend line or channel.
5. If two levels are too close together (5 to 20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be set at breakeven.

What's on the Charts:

Price levels (areas) of support and resistance are targets when opening long or short positions or sources of signals.

Red lines indicate channels or trend lines that display the current trend and indicate the preferred direction for trading.

The MACD indicator (14,22,3) – histogram and signal line – is a supplementary indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly impact the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or one should exit the market to avoid sharp reversals against preceding movements.

Beginners trading in the forex market should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are keys to success in trading over the long term.

1H Chart of GBP/USD

The GBP/USD pair also failed to show any interesting movement on Wednesday. Initially, the British pound rose moderately, then it decreased slightly, and on the hourly timeframe, it is evident that the pair has been trading in a sideways channel for almost a month. The new escalation of the conflict in the Middle East did not impress traders, as there have been at least ten violations of the truce in recent weeks. Each time, Tehran and Washington calmly continued negotiations, and Donald Trump kept promising a "tremendous deal" with Iran very soon. As a result, the market no longer believes in anything—neither in the resumption of war, nor in the signing of a peace agreement, nor in the opening of the Strait of Hormuz, nor in Tehran's and Washington's willingness to reach an agreement. Trump is losing the war in Iran, as none of his objectives have been achieved. The longer the conflict lasts, the lower Trump's chances of maintaining sole power in the US become. Congressional elections are just around the corner...

5M Chart of GBP/USD

On the 5-minute timeframe, two trading signals were formed on Wednesday. Throughout the entire European session, the pair attempted to bounce from the area of 1.3380-1.3386, and as night approached, it breached this area in the opposite direction. In both cases, we did not see any significant movement in the desired direction due to low volatility.

How to Trade on Thursday:

On the hourly timeframe, the GBP/USD pair continues to form a downward trend, as the geopolitical situation remains consistently poor, and the ascending trend line has been breached. However, without a resumption of full-scale war in the Middle East, the dollar cannot expect growth as it did in February-March. Individual events may still prompt further strengthening (as on Friday), but we do not believe the market will trigger a new wave of risk-off flows into the dollar. Under Trump, the dollar itself is a risky asset.

On Thursday, novice traders can open short positions targeting 1.3319-1.3331 if there is a bounce from the 1.3380-1.3386 area. A price consolidation above the area of 1.3380-1.3386 will allow for opening long positions with a target of 1.3456.

On the 5-minute timeframe, trading can currently take place at the following levels: 1.3175-1.3180, 1.3259-1.3267, 1.3319-1.3331, 1.3380-1.3386, 1.3456-1.3476, 1.3587-1.3598, 1.3631-1.3641, 1.3695, 1.3741-1.3751. On Thursday, no important events or reports are scheduled in the UK, while the only report in the US will be the Producer Price Index, which is unlikely to interest anyone, given that the inflation report was published yesterday...

Basic Rules of the Trading System:

1. The strength of a signal is determined by the time required to form it (a bounce or a breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a particular level based on false signals, subsequent signals from that level should be ignored.
3. In a flat market, any pair may form many false signals or none at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be executed only when volatility is good, and a trend is confirmed by a trend line or channel.
5. If two levels are too close together (5 to 20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be set at breakeven.

What's on the Charts:

Price levels (areas) of support and resistance are targets when opening long or short positions or sources of signals.

Red lines indicate channels or trend lines that display the current trend and indicate the preferred direction for trading.

The MACD indicator (14,22,3) – histogram and signal line – is a supplementary indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly impact the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or one should exit the market to avoid sharp reversals against preceding movements.

Beginners trading in the forex market should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are keys to success in trading over the long term.

1H Chart of EUR/USD

The EUR/USD currency pair continued to trade with low volatility and a complete reluctance to move in any direction on Wednesday. Recall that the US inflation report was published yesterday, which has a direct impact on the Federal Reserve's monetary policy. Due to inflation in the US accelerating three months ago, the market began to anticipate a tightening of monetary policy by the Fed. Thus, yet another rise in inflation in America could have prompted a new rally for the dollar. If it weren't for one "but." The market once again ignored this important macroeconomic report. It is worth noting that the actual figure matched the forecasts perfectly, so there was essentially nothing to react to. However, the acceleration in inflation to 4.2% significantly increases the likelihood of a Fed rate hike in 2026. Also, yesterday, the truce between Iran and the US was once again broken, and Donald Trump virtually acknowledged the breakdown of negotiations. But the market did not find it necessary to react to this news either.

5M Chart of EUR/USD

In the 5-minute timeframe, no trading signals were formed on Wednesday. Several times, the price approached the 1.1527-1.1531 area but failed to act. Earlier this morning, the pair reacted to and bounced off the specified area, allowing, or soon allowing, the opening of long positions.

How to Trade on Thursday:

On the hourly timeframe, the flat has concluded, and a downward trend has resumed after three weeks of stagnation, but any further US dollar growth will be entirely dependent on developments in geopolitical events. If full-scale war resumes in the Middle East, the dollar will continue to rise. If Tehran and Washington return to the negotiating table, this will support riskier currencies.

On Thursday, novice traders can open short positions targeting 1.1455-1.1474 if the price breaks below the 1.1527-1.1531 area. Long positions can be considered on a bounce from the 1.1527-1.1531 area, with targets at 1.1584-1.1594.

On the 5-minute timeframe, the following levels should be considered: 1.1354-1.1363, 1.1413, 1.1455-1.1474, 1.1527-1.1531, 1.1584-1.1594, 1.1655-1.1666, 1.1745-1.1754, 1.1830-1.1837, 1.1899-1.1908. On Thursday, the European Central Bank meeting will take place in the European Union, the interest rate decision will be announced, and Christine Lagarde will deliver a speech. However, we have no confidence that the market will not ignore this event since the ECB's intention to raise interest rates has been known for over a week.

Basic Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form (a bounce or a breakout). The less time it took, the stronger the signal.
2. If two or more trades were opened at a particular level on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can form many false signals or none at all. Technical levels may be ignored.
4. On the hourly timeframe, trading signals from the MACD indicator should be executed only when volatility is good, and a trend is confirmed by a trend line or channel.
5. If two levels are too close together (5 to 20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be placed at breakeven.

What's on the Charts:

Price levels (areas) of support and resistance are targets when opening long or short positions or sources of signals.

Red lines indicate channels or trend lines that display the current trend and indicate the preferred direction for trading.

The MACD indicator (14,22,3) – histogram and signal line – is a supplementary indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly impact the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or one should exit the market to avoid sharp reversals against preceding movements.

Beginners trading in the forex market should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are keys to success in trading over the long term.

The GBP/USD currency pair traded quite calmly on Wednesday, as if there were peace and tranquility in the Middle East. However, that is not the case. In the Middle East, Iran first attacked an American helicopter, then the US attacked Iranian coastal military facilities, and subsequently Tehran began launching missiles at Jordan, Bahrain, and Kuwait. In this unfortunate situation, we can only wonder how much the market loves the "spaghetti" Donald Trump is serving. The American president has been insisting for weeks that an agreement with Iran is practically signed and that Tehran is willing to export all nuclear fuel and impose a moratorium on uranium enrichment in the future. To be precise, we have been hearing such statements from Trump for two months now, since the temporary truce was agreed upon on April 7. Only in the last couple of weeks has the market stopped believing Trump's words, but it still reacts to practically any events and news concerning the Middle East.

Yes, the market's reaction to geopolitics now is not the same as it was three months ago. The market is currently processing Trump's statements and promises, as well as actual events in the Middle East, with caution. This is precisely what we meant when we repeated for weeks that the geopolitical factor has less influence on the currency market, yet geopolitics still accounts for 90% of currency pair movements. In other words, the market no longer responds to every event, every piece of news, or every statement with 100-point moves, but it still reacts to geopolitical events (with rare exceptions).

What does all this mean for the British pound? Only that we should not expect any significant decline in the GBP/USD pair unless Trump genuinely intends to resume full-scale attacks on Iran. This is exactly what the American leader stated yesterday. He said that the time for signing a favorable peace agreement with Iran has expired and that its acts of aggression this week compel the US to switch to a forceful method of problem-solving. However, yesterday, Trump mentioned the possible resurgence of war, and today, he may announce that negotiations with Tehran have resumed, as "Iran really wants to get an agreement." The rhetoric of the American president can change ten times in a day, and each subsequent statement can contradict the previous one. We believe that traders should have long since gotten used to this and generally stop reacting to Trump's words. However, they are still unable to ignore them completely.

As such, we do not expect a strengthening of either the dollar or the British pound without the resumption of war or the signing of a peace agreement. The market will likely continue to ignore most macroeconomic statistics and fundamental events, except for perhaps the most significant ones.

The average volatility of the GBP/USD pair over the last five trading days is 81 pips. For the pound/dollar pair, this value is considered "average." On Thursday, June 11, we therefore expect movements within the range limited by levels 1.3308 and 1.3470. The upper channel of the linear regression is directed upwards, indicating a potential recovery of the upward trend. The CCI indicator has entered oversold territory, signaling a possible end to the downward trend.

Closest Support Levels:

S1 – 1.3367

S2 – 1.3306

S3 – 1.3245

Closest Resistance Levels:

R1 – 1.3428

R2 – 1.3489

R3 – 1.3550

Trading Recommendations:

The GBP/USD currency pair has resumed its downward movement. Trump's policies will continue to put pressure on the US economy, so we do not expect long-term growth in the US dollar. However, 2026 is currently looking very positive for the dollar due to geopolitical factors. Thus, long positions targeting 1.3489 and 1.3550 can be considered when the price is above the moving average. A price below the moving average will allow trading on the downside with targets of 1.3306 and 1.3245. Market conditions often change, and the market primarily tracks geopolitical news, which is not uniform.

Notes on Illustrations:

Linear regression channels help determine the current trend. If both are pointing in the same direction, it indicates a strong trend.

The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which trading should be conducted.

Murray levels are target levels for movements and corrections.

Volatility levels (red lines) indicate a probable price channel, within which the pair will operate for the next day, based on current volatility indicators.

The CCI indicator: its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.

The EUR/USD currency pair maintained a downward bias on Wednesday, with geopolitical events not suggesting otherwise at this time. Recall that the week began optimistically with new promises from Donald Trump to sign an agreement with Iran very soon. However, the next day, something went awry in the American president's plans. It became known that Iran attacked and destroyed an American Apache helicopter patrolling the Strait of Hormuz. In response to this "outrageous act of aggression," the US struck Iranian radars and launch sites. Yesterday, Tehran began launching retaliatory strikes against Bahrain, Kuwait, and Jordan.

As we can see, Donald Trump appears to be living in some parallel universe where a deal with Iran has already been agreed upon, and victory over a principal adversary was achieved months ago. In reality, there is no deal with Iran in sight, and the market is once again starting to wake up from the "noodles" that the White House leader has been dangling before it. Therefore, it is not surprising that the American currency is rising again. It is rising moderately, as the prospect of resuming full-scale war is not on the table either. No one wants it, but Iran is ready for it, while the US is unlikely to be.

As a result, we find ourselves with something between a ceasefire and full-scale war. Military experts probably cannot even describe the current situation with a single term, as such a term simply does not exist. However, there is effectively no ceasefire now, and negotiations have long taken on a formal status. The market continues to ignore all macroeconomic and fundamental backgrounds, so even the European Central Bank's readiness to raise interest rates today does not play any role.

Just think about it: the ECB is ready to tighten monetary policy (the first and only major central bank to do so), yet the euro continues to fall. When will we see this again? It's all because 90% of the dynamics of the currency market and currency instruments are determined by geopolitics. We have been highlighting this for three months straight. Therefore, today it absolutely does not matter what decision the ECB will make (though it is essentially already known), what rhetoric Christine Lagarde will maintain (even if she promises five more rate hikes), or what statements will be made regarding the economy and inflation.

It is evident to all that if the conflict in the Middle East is not resolved, inflation will continue to accelerate, and a single interest rate hike will not extinguish this process. Thus, there is no sense in just tightening policy, and whether the ECB is ready to raise rates multiple times remains a big question, given the European economy's growth rate in the first quarter. However, let us repeat once more: all this information is currently irrelevant. Perhaps the market will react, for formality's sake, to the results of today's meeting and Lagarde's speech. But then everything will revert to the norm. The pair may change direction five times in a day solely based on geopolitical factors.

The average volatility of the EUR/USD currency pair over the last five trading days as of June 11 is 65 pips, which is considered "average." We expect the pair to move between levels 1.1485 and 1.1615 on Thursday. The upper channel of the linear regression has turned upwards, indicating a trend change to upward. The CCI indicator has entered the overbought area and formed two bearish divergences, warning of the onset of a downward correction that has not yet completed. On Friday, it entered the oversold area, warning of a possible completion of the correction.

Closest Support Levels:

S1 – 1.1536

S2 – 1.1475

S3 – 1.1414

Closest Resistance Levels:

R1 – 1.1597

R2 – 1.1658

R3 – 1.1719

Trading Recommendations:

The EUR/USD pair continues its downward movement, which is presumably a correction within the global upward trend. The global fundamental background for the dollar remains extremely negative, and only geopolitical factors regularly provide support to it. When the price is below the moving average, short positions can be considered with targets at 1.1485 and 1.1475. Long positions become relevant when the price is above the moving average line, targeting 1.1719 and 1.1780. The market continues to move away from geopolitical factors, but in recent weeks, the dollar has been in demand as hopes for peace in the Middle East have grown weaker.

Notes on Illustrations:

Linear regression channels help determine the current trend. If both are pointing in the same direction, it indicates a strong trend.

The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which trading should be conducted.

Murray levels are target levels for movements and corrections.

Volatility levels (red lines) indicate a probable price channel, within which the pair will operate for the next day, based on current volatility indicators.

The CCI indicator: its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.

The GBP/USD currency pair showed mixed movements throughout Wednesday. The market could not decide how to react to the breakdown of negotiations between Iran and the US, the new attacks by Iran and the US on each other's positions in the Middle East, and the inflation report, which met expectations. As a result, we observed low volatility and a market reluctant to make hasty decisions. Although the negotiations between Tehran and Washington appear deadlocked, we have little doubt they will resume soon. At least for now, war in the Middle East has not resumed, despite Iran's attacks on Bahrain, Kuwait, and Jordan. Thus, there are no compelling reasons for a new risk-off flight to the dollar. However, there are also no compelling reasons to eliminate the US dollar. The market is in no hurry, simply waiting.

From a technical perspective, the downward trend continues, and the price is below the Ichimoku indicator lines. As we expected, the pair's growth on Friday was an exception, as the market has paid little attention to macroeconomic data in recent months. Geopolitics also does not support the dollar as strongly as before, but many factors will support the currency in 2026. On the daily timeframe, it is evident that the pair has been in a sideways range for 9 months.

On the 5-minute timeframe on Wednesday, exactly one trading signal was formed — a buy signal. At the start of the US session, the price bounced from the 1.3369-1.3392 area and rose by a full 20 pips. Therefore, there was no loss on the long position, but there was no substantial profit either, as the price quickly returned to its original level.

COT Report

COT reports on the British pound indicate that commercial traders' sentiment has been constantly changing in recent years. The red and blue lines, which represent the net positions of commercial and non-commercial traders, frequently cross each other and are mostly close to the zero mark. Currently, the lines are moving apart, with non-commercial traders dominating with... sales. Given the events in the Middle East, it is not surprising that demand for riskier currencies is low.

In the long term, the dollar continues to decline due to Donald Trump's policies, which are clearly visible on the weekly timeframe (illustration above). The trade war will continue in one form or another for a long time, and Trump's policies are aimed directly and indirectly at weakening the US currency. However, geopolitical factors currently take precedence, which have recently provided strong support to the dollar. As the conflict in the Middle East is not yet resolved, the US dollar may still see further growth. According to the latest COT report (dated June 2), the "Non-commercial" group closed 4,300 BUY contracts and 13,500 SELL contracts. Thus, the net position of non-commercial traders increased by 9,200 contracts over the week.

Analysis of GBP/USD 1H

On the hourly timeframe, the GBP/USD pair has completed its upward trend due to renewed tensions around the Strait of Hormuz and in the relations between Iran and the US. The macroeconomic and fundamental background still has little influence on the pair's movements (with rare exceptions). We do not believe that, without a real escalation of the conflict in the Middle East, the dollar will show strong growth, but the US currency's position is currently more advantageous than that of the British pound.

For June 11, we identify the following important levels: 1.3096-1.3115, 1.3179-1.3187, 1.3301-1.3309, 1.3369-1.3377, 1.3465-1.3480, 1.3588, 1.3671-1.3681, 1.3751-1.3763. The Senkou Span B line (1.3437) and Kijun-sen line (1.3394) may also serve as sources of signals. It is recommended to set the Stop Loss at breakeven when the price moves in the correct direction by 20 pips. The Ichimoku indicator lines may shift throughout the day, which should be considered when determining trading signals.

On Thursday, no important events or reports are scheduled in the UK, while only the Producer Price Index will be released in the US. After the publication of the May inflation report, this report has practically no significance, except for purely statistical purposes.

Trading Recommendations:

Today, traders may consider short positions targeting the 1.3301-1.3309 range if price consolidates below the 1.3369-1.3377 area. Long positions will be relevant in the event of a bounce from the 1.3369-1.3377 area, targeting the Senkou Span B line.

Notes on Illustrations:

Price levels of support and resistance are thick red lines where movement may end. They are not sources of trading signals.

The Kijun-sen and Senkou Span B lines are lines from the Ichimoku indicator shifted to the hourly timeframe from the 4-hour timeframe. They are strong lines.

Extremum levels are thin red lines from which the price previously bounced. They serve as sources of trading signals.

Yellow lines represent trend lines, trend channels, and other technical patterns.

Indicator 1 on the COT charts represents the size of the net position of each category of traders.

On Wednesday, the EUR/USD currency pair continued to move as if it were doing someone a favor. Despite several important events over the past day, the market found nothing interesting in them. A day earlier, we noted that, excluding last Friday's movement, the pair remains within a sideways channel. As a result of a 100-pip decline amid strong Nonfarms, the channel simply shifted lower. The nature of the pair's movement has not changed at all: it remains in the same weakly volatile flat. On Wednesday, the US inflation report for May was published. Although the actual figure matched the forecast, the market would not have overlooked the fact that inflation had doubled in three months. Now, the market continues to focus only on geopolitics, and even in that area, it does not react to all news. Yesterday, it became known that Iran launched missiles at some US allies in the region, and Trump effectively acknowledged the breakdown of negotiations. There was also no reaction to these events.

From a technical perspective, the downward trend resumed, but whether it will continue is a big question. If Tehran and Washington somehow sign a deal, demand for the US currency will decline. However, at this time, the parties are much closer to resuming war, so the dollar remains strong across the market.

On the 5-minute timeframe on Wednesday, three trading signals were formed. Twice, the price bounced from the area of 1.1536-1.1542, worked through the Kijun-sen line, bounced back from it, and returned to the area of 1.1536-1.1542. Thus, traders had the opportunity to open two profitable trades. However, due to low volatility, the profit was minimal.

COT Report

The latest COT report is dated June 2. The weekly timeframe clearly shows that the net position of non-commercial traders remains "bullish" but has declined significantly due to geopolitical events. Traders have been getting rid of the euro in favor of the US dollar in recent months. Donald Trump's policy has not changed, but for a time, the dollar served as a "reserve currency." However, this process may have already concluded.

We still do not see any fundamental factors to strengthen the euro, while there remain enough factors for a decline in the dollar. The war in the Middle East has made the dollar temporarily super-attractive, but once the "expiry date" of this factor passes, everything will return to normal. That date may have already passed. In the long term, the euro could fall to the level of $1.08 (the trend line), but the upward trend will remain relevant. Over the past few months, the pair has not come particularly close to this line.

The positioning of the indicator's red and blue lines indicates parity between bulls and bears. Over the last reporting week, the number of long positions in the "Non-commercial" group increased by 12,400, while the number of shorts decreased by 7,000. Correspondingly, the net position increased by 21,400 contracts over the week.

Analysis of EUR/USD 1H

On the hourly timeframe, the EUR/USD pair has resumed its downward trend. The situation in the Middle East remains tense, but there is no resumption of full-scale war, nor any peace deals. Thus, there are currently no sufficient reasons for the dollar to rise, and no significant reasons for the euro to strengthen. However, considering ongoing geopolitical changes, such reasons may emerge.

For June 11, we identify the following levels for trading: 1.1362, 1.1426, 1.1536-1.1542, 1.1585, 1.1657-1.1666, 1.1750-1.1760, 1.1786, 1.1830-1.1837, 1.1907-1.1922, as well as the Senkou Span B line (1.1637) and the Kijun-sen line (1.1573). The Ichimoku indicator lines may shift throughout the day, which should be considered when determining trading signals. Don't forget to set a stop-loss order at breakeven if the price moves in the correct direction by 15 pips. This will protect against potential losses if the signal proves false.

On Thursday, the results of the European Central Bank meeting will be announced, along with a speech by Christine Lagarde. The ECB's decision on rates is already largely known, so we do not expect strong market reactions to this event today. Most likely, the reaction will be formal and will not influence the technical picture or the power dynamics between bulls and bears.

Trading Recommendations:

Today, traders may consider short positions targeting 1.1444 if the price consolidates below the 1.1536-1.1542 area. Long positions can be opened if there is consolidation above 1.1585, targeting 1.1637.

Notes on Illustrations:

Price levels of support and resistance are thick red lines where movement may end. They are not sources of trading signals.

The Kijun-sen and Senkou Span B lines are lines from the Ichimoku indicator shifted to the hourly timeframe from the 4-hour timeframe. They are strong lines.

Extremum levels are thin red lines from which the price previously bounced. They serve as sources of trading signals.

Yellow lines represent trend lines, trend channels, and other technical patterns.

Indicator 1 on the COT charts represents the size of the net position of each category of traders.

On Tuesday, I wrote that the probability of at least one Federal Reserve interest rate hike by the end of the year currently stands at around 70%, according to the CME FedWatch tool. On Wednesday, it became known that inflation in the US surged to 4.2%. While this figure aligns with market expectations, it is hardly normal. In just three months, the consumer price index has accelerated from 2.4% to 4.2% and continues to move away from the Fed's target.

We have already debated many times whether the FOMC committee under Kevin Warsh will move towards tightening policy. I believe the FOMC will wait and drag its feet, trying to avoid raising interest rates. However, it cannot be denied that recent US economic data (not just inflation) have somewhat increased the likelihood of policy tightening in 2026.

Firstly, this refers to the US labor market, which began to recover in 2026 after three rounds of easing in 2025. The last three Nonfarm Payroll reports have indeed shown promising figures, bringing them closer to four-year highs when the labor market encountered no problems. Consequently, the Fed may no longer need to focus all its attention on the labor market.

Secondly, as mentioned, inflation has risen to 4.2% and is unlikely to stop at this level. This means that either a tightening of Fed policy or a resolution of the conflict in the Middle East and the reopening of the Strait of Hormuz is needed to slow it. The FOMC committee is probably desperately awaiting the second event to avoid the first.

Thirdly, economic growth in the US accelerated slightly in the first quarter compared to the fourth quarter of last year, but still remains significantly below even a "neutral" level. I would remind you that earlier economists estimated that, under Donald Trump, his policies would have caused the US GDP to miss at least 0.9% in 2025. Therefore, current growth rates are not high, and raising interest rates will lead to a "cooling" of the economy and the labor market. This is certainly not what Trump aims to achieve.

Based on the aforementioned, I believe we should pay attention to statements from Fed officials. So far, none of them have signaled a readiness to vote for policy tightening before the end of 2026.

Wave Picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument remains within an upward segment of the trend (bottom picture), while in the shorter term, it is within a downward segment of the trend that may already be complete. In my opinion, this is a good time to consider forming long positions. The unsuccessful attempt to break the mark of 1.1513, which corresponds to 76.4% on the Fibonacci scale, combined with the completed appearance of the downward segment of the trend, suggests that the instrument may transition to building an upward wave set with targets around the 17 figure and higher.

Wave Picture for GBP/USD:

The wave picture for GBP/USD has become clearer. Currently, the instrument has built three waves down, while EUR/USD has formed five. Consequently, the British pound may limit itself to forming a corrective structure, and both currency pairs may begin to build upward trend segments. At the moment, this is merely an assumption, but a plausible one. If it is accurate, the instrument will start to rise, with targets around the 35 level and higher. Market participants currently have a good opportunity to make purchases.

Key Principles of My Analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to play back and often involve changes.
2. If there is no confidence in the market, it is better not to enter it.
3. There can never be 100% confidence in the direction of movement. Don't forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

According to the published data, the overall consumer price index month-over-month decreased to 0.5%. Notably, this indicator shows a downward trend for the second consecutive month after reaching a peak of 0.9% MoM in March. Year-over-year, the overall CPI demonstrates a contrasting dynamic, surging to 4.2% in May. This is the highest indicator since May 2023. Overall inflation has been accelerating for the third consecutive month (for comparison: in February this year, the overall CPI was at 2.4% YoY).

The core consumer price index, excluding food and energy prices, slowed its growth even more than expected (this is the only component of the report that came in the "red zone"). Instead of the anticipated decrease to 0.3%, the metric fell to 0.2% MoM. Meanwhile, the annual core CPI has been rising actively for the third month in a row, reaching 2.9% in May (the highest level since September last year).

The structure of the report indicates that the main driver of May's growth was, of course, the energy sector, which accounted for over 60% of the total index increase in May. The monthly rise in the overall energy sector was 3.9% (following a 3.8% increase in the previous month), with a year-on-year increase of 23.5%. Specifically, gasoline prices in the US rose by 7.0% in May, while the annual increase reached 40.5%.

However, despite the surge in overall inflation, the core index (Core CPI) shows relatively modest growth on an annual basis. As noted above, in month-over-month terms, it is even slowing. This dynamic is due to several factors. In particular, May saw a decrease in housing services: monthly growth slowed to 0.3%, down from 0.6% the previous month. Annually, Shelter rose by 3.4%. This indicates a gradual cooling of this critical component for the CPI. In the food sector, prices rose by 0.2% MoM (3.1% YoY), with Food-at-Home increasing by only 0.1%, while dining out added 0.3%. The cost of air travel increased by 2.7%, and medical services rose by 0.5%. At the same time, in May, prices declined for used cars (-0.3%) and auto insurance (-1.7%).

What does the May CPI report indicate? First and foremost, it suggests that the current round of price acceleration is largely driven by external factors, primarily the energy component. Meanwhile, the core CPI showed relatively weak growth, suggesting that widespread inflation across most categories of goods has not yet materialized.

It is also worth noting the slowdown in the month-over-month CPI dynamics while the annual figures accelerate. The decrease in the growth rates of the CPI on a monthly basis (both overall and core) indicates a weakening of the current inflation impulse. In other words, prices in May increased at a slower pace than in April, including in sensitive demand categories. This is a sign of gradually easing price pressures. This primarily concerns the core measure: the slowdown to 0.2% MoM, when extrapolated, corresponds to a trajectory lowering to 2.4-2.5% YoY. At the same time, the acceleration of the overall annual CPI is partially explained by a low-base comparison effect.

Overall, the report allows the Federal Reserve to maintain a wait-and-see position without taking additional steps toward policy tightening or even tightening its rhetoric in the near term. This is precisely why EUR/USD traders practically ignored the release. On the one hand, inflation remains high, but on the other hand, its structure is not "tight" enough for the market to start reassessing rate expectations.

In other words, the May CPI report in the US did not bolster the greenback despite the rise in the annual figures. Responding to the report, the EUR/USD pair retreated from intraday highs, albeit by only 20 pips. This indicates that traders "took note of" the report but did not assign it decisive significance. The further price direction will be determined by geopolitical factors, primarily the dynamics of US-Iran negotiations. Until this intrigue is resolved, the pair will likely oscillate within the range of 1.1510–1.1580, where it has been trading for the third consecutive day.

Investors, holding their breath in anticipation of the key Consumer Price Index (CPI) report, received data that generally aligned with forecasts. However, hopes for a sustainable recovery were dashed: the hawkish tilt of the Federal Reserve's monetary policy and renewed escalation in the Middle East continue to exert crushing pressure on the non-yielding asset.

Fundamental Background: "Hawkish Shock" and Geopolitics

1. CPI Data: Forecast Alignment Did Not Bring Relief

The main event on Wednesday was the publication of the US inflation data for May. The US Bureau of Labor Statistics (BLS) reported that the annual Consumer Price Index (CPI) rose to 4.2% from 3.8% in April, matching market forecasts and marking the highest level since May 2023. Month-over-month, the CPI increased by 0.5%, also in line with expectations.

Core CPI, excluding volatile food and energy prices, showed a less aggressive trend: month-over-month growth was 0.2% (forecasted at 0.3%), while year-over-year it stood at 2.9% (forecasted at 2.9%). This slight "underperformance" in the monthly core figure caused short-term optimism in the market: the US dollar weakened, and gold received a temporary reprieve, bouncing back from its lows.

However, this bounce proved to be short-lived. Investors remain convinced that inflationary pressures are unlikely to sustainably ease until the crisis between the US and Iran is resolved and oil prices return to pre-war levels.

2. The Fed: Probability of Rate Hike Increases

Despite the CPI data aligning with forecasts, it did not fundamentally change market expectations regarding the Fed's monetary policy. According to the CME FedWatch tool, traders assess the probability of at least one interest rate hike by the end of the year at around 70%.

This is a significant increase compared to 50% reported prior to last week's strong employment report (NFP).

The yield on 10-year US Treasury bonds has settled above 4.50%, making the US dollar extremely attractive in yield terms relative to gold. High interest rates increase the opportunity cost of holding gold, which pays no coupon income, while simultaneously supporting the dollar and making commodities more expensive for holders of other currencies.

3. Geopolitics: Escalation in the Persian Gulf

Contrary to expectations, the resumption of hostilities in the Middle East did not provide support for gold. Earlier in the week, the US carried out retaliatory strikes against Iran after President Donald Trump accused Tehran of downing an American Apache helicopter in the Strait of Hormuz. In response, the Iranian Revolutionary Guard Corps (IRGC) struck US military bases in Jordan, Kuwait, and Bahrain.

This paradoxical behavior can be explained by the fact that the geopolitical crisis, rather than directly increasing demand for safe-haven assets, works through the "oil channel." Rising oil prices heighten inflationary expectations, which in turn drive central banks to tighten policy, making this the primary bearish factor for gold. WTI oil prices, although corrected below $90 per barrel, remain significantly above pre-war levels.

Summary Table of Fundamental Factors

Key Events of the Week

Conclusion

Gold is under intense pressure from a combination of hawkish factors, and the short-term bounce following the CPI data did not change this picture. Strong US labor market data (NFP) and the subsequent reevaluation of Fed rate expectations (probability of a hike—70%) dealt a crushing blow to the non-yielding asset.

The technical breakdown below the 200-day moving average (4380.00) after 640 trading days above it confirmed a trend change. Gold is no longer trading in a "buy on dips" mode that has dominated the market for the past two years.

Nevertheless, structural bullish drivers (central bank purchases, currency devaluation, geopolitical fragmentation) remain in place. Economists maintain that the upward trend is merely postponed, not canceled. However, for it to resume, moderation in inflation driven by rising energy prices is necessary.

Investors should exercise extreme caution. The PPI data on Thursday and the FOMC meeting on June 16-17 will be the next determining macroeconomic tests.

An official release from the Bank of Japan states that Kazuo Ueda has been hospitalized. Furthermore, Ueda will not be able to participate in the two-day monetary policy meeting scheduled for June 15 and 16. The meeting will be led by Deputy Governor Ryozo Himino, while another deputy, Shinichi Uchida, will hold the press conference after the decision is made.

There is currently no additional information about Ueda's health; however, the central bank indicated that he is likely to remain in the medical facility for about two weeks. It is expected that the BoJ will raise interest rates by 25 basis points at its June meeting, bringing the base rate to 1%—the highest level in more than three decades.

The table below shows the percentage change of the Japanese yen against key global currencies traded on the exchanges as of Wednesday. The Japanese yen has demonstrated the strongest performance against the Australian dollar.

Ethereum (ETH/USD) is trading around $1,635, bouncing after reaching the 50% Fibonacci retracement level drawn from its low of $1,500 to its high of $1,725. Ethereum may struggle to continue its upward trend, and we could expect a further downward movement in the coming days, potentially reaching the 61.8% Fibonacci level around $1,590.

Given the prevailing bearish pressure, Ethereum is expected to return to the $1,500 level, a key level that could be seen as a decisive point for entering long positions. Alternatively, if the ETH price breaks above the 61.8% Fibonacci level, it could be viewed as a bullish signal.

Conversely, if Ethereum consolidates above the 21-period SMA at $1,655 in the coming hours, we could expect the bullish cycle to resume, potentially reaching the 2/8 Murray level around $1,750 and even the upper band of the descending trend channel around $1,785.

Ethereum could recover some of its losses if it consolidates above $1,650 in the coming days, potentially reaching the 200-period EMA around $1,925. Given that all cryptocurrencies are currently under bearish pressure, we could look for opportunities to sell below $1,655, with targets at $1,580 and ultimately around the 0/8 Murray level at $1,500.