Market Outlook

June 23-27, 2025

Global markets are on a high-wire, balancing on the knife-edge between escalating geopolitical conflict and diverging central bank policies. This week, every data point will be viewed through this volatile lens.

Geopolitical Threat Matrix

The primary driver of risk is the direct conflict between Israel and Iran, with the Strait of Hormuz as the critical chokepoint for 20-25% of the world's oil supply.

Israel-Iran Conflict Escalates

Direct Military Strikes

Threat to Strait of Hormuz

25% of Global Oil at Risk

Global Supply Shock

Oil Spike & Recession Fears

The Central Bank Battleground

A stark divergence in monetary policy is creating powerful cross-currents in currency markets, pitting hawkish holds against active easing cycles.

Today's Market Snapshot

EUR/USD
Neutral/Bullish
GBP/USD
Neutral
USD/JPY
Bearish
USD/CHF
Neutral/Bullish
USD/CAD
Bearish
AUD/USD
Bearish
NZD/USD
Bearish
XAU/USD
Bullish
WTI Oil
Volatile
BTC/USD
Short-Term Bearish

G7 Currencies: Deep Dive

EUR/USD: Policy-Driven Range

Caught between a dovish ECB and a conflicted Fed. Geopolitical risk is driving flows into the dollar, but this could reverse. Path of least resistance seems higher, capped by major resistance.

Support: 1.1450 Resistance: 1.1631

GBP/USD: Stagflation Headwinds

Grim domestic outlook (weak GDP, high inflation) has the Bank of England paralyzed. Resilience is a function of USD weakness. Expect choppy, range-bound trading.

Support: 1.3400 Resistance: 1.3635

USD/JPY: Carry Trade Under Pressure

A classic divergence play. The Bank of Japan's hawkish pivot (3.7% core inflation) is a fundamental shift likely underestimated by markets. Path of least resistance appears lower.

Support: 144.44 Resistance: 146.25

USD/CHF: The Safe-Haven Standoff

Both are safe havens, but the 4.5% interest rate differential in favor of the USD is a powerful bullish force. Pressure is building for an upside breakout.

Support: 0.8099 Resistance: 0.8215

USD/CAD: Tethered to Oil's Volatility

A battle between oil's geopolitical strength (bullish CAD) and concerns over the North American economy. As long as oil's risk premium holds, CAD should find support.

Support: 1.3566 Resistance: 1.3740

AUD/USD & NZD/USD: Risk Barometers

Classic risk-proxies with dovish central banks and exposure to a slowing China. The fragile global risk environment makes any rallies likely selling opportunities.

AUD Support: 0.6433 NZD Resistance: 0.6000

Commodities & Digital Assets: Epicenter of Risk

XAU/USD (Gold)

Gold is the ultimate fear gauge, caught in a tug-of-war between safe-haven demand from the Middle East and a hawkish Fed. Geopolitical risk is high, suggesting support will hold.

WTI Crude Oil

WTI is highly conflicted. A fundamental supply glut is being overpowered by an extreme geopolitical risk premium. Price will be dictated by headlines from the Middle East.

BTC/USD (Bitcoin)

Behaving as a high-beta risk asset short-term, but institutional "whale" accumulation is strong on any dips. A divergence between retail fear and institutional greed.

Primary Scenarios for the Week

Scenario 1: Risk-Off Escalation (Higher Probability)

Direct U.S. military involvement or a Strait of Hormuz incident triggers a flight to safety.

  • WTI Oil: Spikes above $85/barrel
  • XAU/USD: Breaks $3450 resistance
  • Safe Havens (USD, JPY, CHF): Rally strongly
  • Equities & BTC: Sharp correction

Scenario 2: The Dovish Pivot (Lower Probability)

Geopolitical tensions simmer but a dovish Fed Chair Powell or cool PCE data becomes the main catalyst.

  • U.S. Dollar: Sells off sharply
  • EUR/USD & GBP/USD: Break key resistance
  • Risk Assets (Equities, BTC): Rally to new highs
  • WTI & Gold: Profit-taking, but remain supported