Strength Dashboard
| Symbol | Rating | Reason |
|---|---|---|
| Currencies | ||
| GBP | Weak Bearish | Dollar pressure weighing on sterling. |
| USD | Strong Bullish | Hawkish Fed, DXY at 13-month high. |
| EUR | Strong bearish | ECB raised but dollar dominance persists. |
| JPY | Strong Bearish | USD/JPY above 160, BoJ still very loose. |
| AUD | Weak bullish | RBA hawkish but broad dollar strength caps. |
| NZD | Weak Bearish | RBNZ dovish bias, dollar headwinds. |
| CHF | Weak bullish | Mild safe-haven demand, SNB near zero. |
| DXY | Strong Bullish | 13-month high on hawkish Fed repricing. |
| Indices | ||
| S&P 500 | Weak bearish | Down 2%, tech rotation drags the index. |
| Dow Jones | Weak Bullish | Up 0.6%, defensive rotation supports. |
| Commodities | ||
| Gold (XAU) | Strong Bearish | Down 3% weekly, hawkish Fed lifts real rates. |
| Oil (Brent) | Strong Bearish | Down 10%+, US-Iran deal floods supply. |
Geopolitical Spotlight
The US-Iran framework deal, signed June 18, was the defining market event of the week. The agreement included an immediate reopening of the Strait of Hormuz, the shipping chokepoint through which roughly 20% of global oil supply passes. Persian Gulf exports have now recovered to around 75% of prewar levels. Saudi Arabia is loading tankers at Ras Tanura again.
The market reaction was swift. Brent crude fell over 10% this week, hitting around $72 per barrel, its lowest since late February. Goldman Sachs cut its Q4 Brent forecast to $80 per barrel and expects full supply normalisation by end of July.
The collapse in oil is rippling through energy equities globally. The key question now is whether Iran sanctions relief will proceed on schedule and whether OPEC producers will act to arrest the price decline.
The next OPEC+ meeting in mid-July will be critical. Saudi Arabia and other producers must decide whether to defend price floors through output cuts or accept lower prices as supply normalises. Watch for any OPEC statements this week. A credible cut announcement could deliver a sharp Brent bounce from the $72 area. Also, watch the Iran sanctions relief timeline closely.
Forex Markets
The US dollar had a strong week. The DXY hit approximately 101.37 to 102.00, a 13-month high. New Fed Chair Kevin Warsh signalled at the June 17 meeting the committee has “some work to do on price stability.” Nine of 18 members now project at least one rate hike in 2026. Markets are pricing roughly 70% probability of a September hike.
GBP/USD held around 1.34, relatively resilient given BoE rates at 3.75%. EUR/USD traded near 1.15, under pressure from the widening rate gap despite the ECB raising to 2.25% on June 11. USD/JPY pushed above 160.00 as the BoJ’s rate at under 1% leaves the yen at a large yield disadvantage. AUD/USD holds around 0.69, supported by RBA rates at 4.35%. NZD/USD is softer near 0.567 with RBNZ rates at only 2.25%. USD/CHF sits around 0.8097, with mild CHF safe-haven demand keeping it in check.
Currencies to watch
USD (DXY)The hawkish Fed is driving everything right now. NFP on July 2 is the test. A strong jobs print cements September hike expectations and pushes DXY higher. Any miss would be the first real challenge to the bullish dollar narrative.GBP/USDSterling holding 1.34 is constructive. With BoE rates among the highest in G10, GBP could outperform peers if the dollar softens. Watch 1.33 as near-term support if NFP beats expectations.USD/JPYAbove 160 is a level that previously triggered Bank of Japan intervention. Any verbal or actual action from Tokyo would move this pair sharply and fast. Worth watching closely heading into NFP.
NFP on July 2 is the key FX event this week. A strong number cements September hike expectations and drives the dollar higher across all pairs. A miss creates the first real test of the hawkish Fed narrative. USD/JPY near 161 is politically sensitive for Tokyo. Watch BoJ Governor commentary carefully. Any hint of currency intervention would cause immediate sharp moves.
Indices
US equities had a week defined by sharp divergence. The Nasdaq fell 4.6% to close at 25,297, posting five consecutive losing sessions. The S&P 500 dropped roughly 2% to 7,354. The Dow Jones gained 0.6% to 51,876, a classic sign of defensive rotation out of growth and into value.
The primary driver was concern over AI spending sustainability. A New York Times report revealed OpenAI is considering delaying its IPO to 2027, citing SpaceX’s poor post-debut performance and broad sector volatility. Semiconductor stocks took the hardest hit. Micron, Intel and AMD each fell around 6%. The Nasdaq has now posted its longest losing streak in several months.
The question chip bulls have been avoiding is now on the table: is the AI capital expenditure cycle peaking? If large AI players pull back, the downstream impact on semiconductor demand could be significant. For now, money is rotating, not fleeing. Defensives, financials and value stocks are absorbing the flows.
Micron reports this week and the result will set the tone for the entire semiconductor space. A miss could trigger another leg lower on the Nasdaq. Watch 25,000 as the key psychological support level. The Dow-Nasdaq divergence is also worth watching. If the Dow begins to weaken alongside the Nasdaq, that would be a broader risk-off signal worth taking seriously.
Gold & Oil
Gold (XAU/USD) ended the week around $4,088, down roughly 3% for the week and down about 8% for the month. This is gold’s fourth consecutive weekly decline. The primary pressure is the hawkish Fed. When markets price in rate hikes, the opportunity cost of holding non-yielding gold rises. A strong dollar compounds that pressure. Gold saw a monthly high of $4,595 before the breakdown began. The $4,000 level is now the key area to watch.
Brent crude is the week’s biggest story. Brent fell over 10% to around $72 per barrel, the sharpest weekly drop since February and the lowest price since then. The trigger was the US-Iran deal reopening the Strait of Hormuz. With supply rapidly recovering, Goldman Sachs forecasts full normalisation by end of July. The risk now shifts from supply disruption to demand. Global growth is slowing under higher rates. If demand data disappoints, $72 may not hold.
Gold needs to hold above $4,000. A break below on strong NFP data would be a significant bearish signal. For oil, the key test is whether OPEC+ signals output cuts at or before its July meeting. A credible cut announcement could deliver a bounce toward $76-78 on Brent. Watch $72 as a short-term floor. A break below opens $68-70 as the next area of interest.
Week in Review
- US-Iran deal signed. Strait of Hormuz reopened. Brent crude fell 10%+ to $72.
- Fed Chair Warsh struck a hawkish tone. DXY hit a 13-month high near 102.
- Nasdaq fell 4.6% in five straight losing sessions. AI bubble fears mounted.
- Gold dropped 3% for a fourth consecutive losing week on rising rate expectations..
- Dow Jones gained 0.6%. Investors rotated from growth to defensive and value.
- July 1: ISM Manufacturing PMI. First read on US factory activity this month.
- July 2: NFP for June. The most important FX event of the week for USD pairs.
- Micron earnings this week. Key bellwether for AI spending and chip demand.
- OPEC+ commentary on whether producers will cut output to defend $72 oil.
- USD/JPY above 160. Watch for any Bank of Japan intervention signals.
