US-Iran negotiations & the new head of the Federal Reserve compete, where will the market go under Powell's "tariff harmless theory"?

On June 26, early trading in the Asian market on Thursday, Beijing time, the US dollar index hovered around 97.49. On Wednesday, the US dollar index finally closed down 0.27% at 97.71 points as Trump announced that the US would meet with Iran next week, risk aversion eased, and the market generally expected the Fed to resume its interest rate cut cycle soon. The benchmark 10-year U.S. Treasury yield closed at 4.2920%, while the 2-year U.S. Treasury yield closed at 3.7930%. As the market waited for data such as US GDP and PCE, spot gold maintained fluctuations, and once approached US$3,310 during the session, finally closing up 0.30%, closing at US$3,333.46/ounce; spot silver finally closed up 0.91%, at US$36.24/ounce. Market news said that if OPEC+ determines that it is necessary, Russia is willing to support a new round of oil production increase at the upcoming meeting on July 6. WTI crude oil closed down 0.12% to $64.88 per barrel; Brent crude oil closed down 0.21% to $67.59 per barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovers around 97.49. Geopolitical tensions last week supported the dollar. But risk sentiment has shifted as President Trump celebrates a swift settlement between Israel and Iran and expresses optimism about future diplomacy with Tehran. Technically, the US dollar index continues to try to close below the recent support level 98.00–98.20. If the U.S. dollar index stays below the 98.00 level, it will move towards the next support level 96.70–96.90.

Euro: As of press time, the euro/dollar hovers around 1.1685. The euro/dollar rebounded Wednesday to its highest level since October 2021, above the 1.1650 level, driven by risk appetite sentiment triggered by easing Iran-Israel conflict and widespread weakness in the U.S. dollar. Investors are increasingly speculating that the Fed (Fedhttps://www.avaforexcn.com) will cut interest rates, pushing the dollar lower and causing it to test its annual lows. Technically, if this attempt is successful, the EUR/USD will move towards the nearest resistance level, which is in the range of 1.1675–1.1690.

GBP: As of press time, GBP/USD is hovering around 1.3693. As the dollar fluctuated across the board, the pound/dollar rose more, firmly rising for the third consecutive day and hit its highest bid in four and a half years. Several central bank policymakers from the Bank of England (BoE) and the Federal Reserve (Fed) made appearances in the first half of the week, and the trend is expected to continue until the rest of the week. Technically, if GBP/USD successfully closes above the 1.3640 level, it will move towards the next resistance level 1.3730.

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On Thursday, gold trading around 3333.90. Fed Chairman Jerome Powell testified in the U.S. Congress that tariffs could only lead to a one-time price increase, but added that the ongoing risks are enough to keep the central bank’s interest rates unchanged. "If it www.avaforexcn.comes quickly and is over, then yes, it's likely to be one-off" and won't lead to longer-lasting inflation," Powell said. However, "we feel the risk. As people who should keep the price stable, we need to manage this risk. That's all we do.

Technical: From a technical point of view, overnight declines confirm the breakout through the short-term upward channel and favor bearish traders. In addition, the oscillating indicator on the daily/4-hour chart has begun to gain negative traction and indicates that the path with the least resistance of gold is the downside. Therefore, any subsequent rise may be considered a selling opportunity and remain near the trend channel support breakpoint, i.e. 3,36Near the $8-3,370 area. However, if the strengthening continues, the www.avaforexcn.commodity may recover the $3,400 integer. On the other hand, bearish traders may now wait for acceptance below the $3,300 mark before making new bets and preparing to fall to the $3,245 area. The downward trajectory may extend further, eventually dragging gold to the horizontal support level of $3,210-3,200 before heading to the $3,175 area.

2) Analysis of crude oil market trends

On Thursday, crude oil trading around 64.56. WTI prices continue to fall after U.S. President Donald Trump pushes a truce between Israel and Iran. The ceasefire between Israel and Iran puts pressure on the black gold. Investors expect a truce between the two countries to reduce the risk of oil supply disruptions in the Middle East, although the truce remains vulnerable.

Technical: Crude oil attempts to rebound after a strong sell-off as traders react to the EIA report. The report shows that crude oil inventories fell by -5.8 million barrels from the previous week, while analysts predicted it to be -750,000 barrels. From a technical point of view, WTI crude oil needs to climb above $66.50 to have a chance to gain upward momentum in the short term.

Forex market trading reminder on June 26, 2025

①14:00Germany July Gfk Consumer Confidence Index

②18:00UK June CBI retail sales difference

③19:00Bank of England Governor Bailey delivered a keynote speech

④20:30Number of initial unemployment claims in the week from the United States to June 21

⑤20:30UK first quarter real GDP annualized quarterly rate final value

⑥20:30UK first quarter real personal consumption expenditure quarterly rate final value

⑦20:30UK first quarter core PCE items Price index annualized quarterly rate final value

⑧20:30 US May durable goods order monthly rate

⑨22:00 US May signing sales index monthly rate

22:30 US May EIA natural gas inventory in the week from the United States to June 20

02:30 ECB President Lagarde delivered a speech

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