Forex News

• WTI fell to a 15-week low as markets priced an imminent US-Iran peace deal.
• The memorandum is still unsigned, and the two sides disagree on what it contains.
• An earlier round of talks already collapsed into a US naval blockade this year.

West Texas Intermediate (WTI) Crude Oil is in free fall, and the market is not waiting for confirmation. Front-month futures dropped roughly 5.8% on the day to test the $75 area, the lowest since early March, after Washington and Tehran signaled a draft peace framework that would lift the US naval blockade and let Iranian barrels return to market. Brent's August contract slid in step, dipping below $79 in its first move under $80 since March. The selloff is told as a supply story, yet no supply has moved; what has moved is conviction the deal is done.

A peace dividend paid before the signature

The trouble is that nobody outside the negotiating rooms has seen the text. Officials describe a memorandum of understanding (MOU) covering a reopened Strait of Hormuz, a lifted blockade, caps on Iran's nuclear work and a release of frozen assets, with the harder questions pushed into a 60-day follow-on negotiation. The US side has talked up a signing ceremony in Geneva on Friday and a Strait that reopens free of Iranian tolls, while Tehran's account of the terms has not lined up cleanly with Washington's. A former US energy adviser put it plainly this week, calling it odd to be told an agreement was struck days ago with no document yet produced. The market has decided to price the press release rather than the paper.

Burned on this script before

This is not the tape's first rally on Iranian peace noise this year, and the earlier episodes did not end well. A February thaw faded, an April ceasefire broke down, and a failed round of talks in the spring is precisely what triggered the naval blockade now in place. US officials themselves put the odds of a signature at around 80%, conceding Iran's internal politics are unpredictable, and the past week has brought street protests against the deal in Tehran alongside fresh threats of retaliation. The physical picture argues for caution, not optimism. Through mid-June, tracking showed the blockade still largely intact, with laden tankers stalled off Chabahar. According to reporting by an NGO in the region, one loaded supertanker has since cleared the cordon out of Chabahar, though the source is hardly neutral and one tanker is not a resumption of flows. The $5 repricing assumes a clean signing the recent record says is anything but guaranteed.

A clean break with air beneath it

Technically, the damage is real regardless of how the politics resolve. WTI sliced through its 200-day Exponential Moving Average (EMA) near $78.50, its first decisive daily close beneath that line since hostilities began in late February, then cut through $76 on the way to probing $75. The 50-day EMA up near $90 shows how far the war premium has bled out. On the intraday chart the Stochastic Relative Strength Index (Stoch RSI) is buried near 12 and deeply oversold, yet every bounce this session has been sold, the signature of a one-way tape rather than a base. The daily Stoch RSI near 28 and still pointing lower argues the higher-timeframe move is not yet exhausted. The structural problem is that March's rally was nearly vertical, so beneath $75 little supports price until the pre-war shelf in the mid-$60s.

Wednesday stacks the Fed on top of the barrels

Before any signature, Wednesday stacks three catalysts on the tape, led by the Federal Open Market Committee (FOMC) decision at 18:00 GMT. A hold at 3.50% to 3.75% is all but locked near 97% on CME FedWatch, so the move sits in the updated projections and the first read on a Fed leadership only weeks into the job; a hawkish lean lifts the Dollar and presses Crude Oil harder, a dovish one cushions it. The weekly Energy Information Administration (EIA) inventory print at 14:30 GMT and the International Energy Agency (IEA) monthly report land earlier the same day. With balances drawing hard through the blockade, a sizeable inventory draw would hand bulls a reason to fade the deal trade, while a build would confirm the demand worry the selloff already chases.

Resistance: First reclaim is $76, with the 200-day EMA near $78.50 the level that would say the break is failing, and $80 the shelf above it.

Support: The level on the block is $75; lose it on a daily close and the path opens toward the low $70s, then a long stretch of air down to the pre-war mid-$60s.

Bias: Lower while WTI holds below $76 and its 200-day EMA, with the low $70s the near-term magnet. The single largest risk to that call is binary and lands at Friday's scheduled signing. A signed deal confirms the unwind, while a slipped or collapsed signature snaps the war premium straight back, and at these oversold readings the reversal would be fast. Trade the level, respect the headline.

WTI hourly chart

• USD/CHF extends losses as easing US-Iran tensions weigh on the US Dollar.
• Markets turn their attention to the Fed's monetary policy announcement on Wednesday.
• Technically, USD/CHF's outlook turns neutral to bearish after failing to clear 0.8000.

USD/CHF extends losses for a second consecutive day on Tuesday as easing tensions between the United States (US) and Iran weigh on demand for the safe-haven US Dollar (USD). At the time of writing, the pair trades around 0.7921, down 0.30% on the day.

Despite improving market sentiment, traders remain cautious ahead of the formal signing of the agreement on Friday. Iran's Foreign Minister Abbas Araghchi warned that any Israeli attack on Lebanon or continued occupation of its territory would violate the interim agreement with the US.

The lingering uncertainty could limit downside in the US Dollar, in turn capping gains in the Swiss Franc (CHF). The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, is trading around 99.50.

Traders are also adopting a wait-and-see approach ahead of the Federal Reserve's (Fed) monetary policy announcement on Wednesday. The war-driven surge in Oil prices has complicated the inflation outlook, putting the Fed's inflation mandate at risk.

While markets have fully priced in no change in interest rates at the upcoming meeting, the focus will be on forward guidance for the months ahead and how policymakers assess the recent rise in inflation.

FXStreet's SpeechTracker average scores show that six of the eleven voting FOMC members are clearly hawkish, with most of the remaining members also leaning hawkish. The analysis does not include the newly appointed Fed Chair, Kevin Warsh.

Though the recent pullback in Oil prices has helped ease inflation concerns, reducing pressure on the central bank to raise interest rates.

Technical Analysis:

In the daily chart, USD/CHF's technical outlook has turned neutral to bearish after buyers failed to extend gains above the 0.8000 psychological barrier, pushing prices back toward key moving-average support.

On the downside, initial support is seen at the 200-day Simple Moving Average (SMA) at 0.7906, with a deeper floor at the 100-day SMA near 0.7839. A clear break below the latter would open the door to a broader correction.

The Relative Strength Index (RSI) has eased to around 53, indicating that bullish momentum has moderated. Meanwhile, the Moving Average Convergence Divergence (MACD) remains in positive territory, but the fading green histogram suggests upside pressure is gradually losing strength.

On the topside, the 0.8000 mark remains the key resistance level, with a sustained move above it needed to revive bullish momentum.

(The technical analysis of this story was written with the help of an AI tool.)

An article published by the Wall Street Journal (WSJ) reported that, within the US-Iran deal, Tehran will be allowed to sell Oil immediately. Alongside this, the deal waives sanctions on banking and transport to facilitate transactions.

United Against Nuclear Iran, a nonprofit, said an Iranian supertanker filled with Oil left the port of Chabahar, crossed the US blockade and was sailing out of the Gulf of Oman with its location tracker active, the first such instance since the beginning of the US blockade in April.

A senior US official said that Iran would receive sanctions relief for Oil sales, and that sustained relief would be tied to Iran fulfilling the promises agreed to in the deal, which is expected to be signed on Friday. Nevertheless, Tehran wouldn’t get immediate access to billions of US Dollars frozen by the US Treasury.

WTI Hourly Chart – Reaction to the headline

The US crude Oil benchmark tumbled to a daily low near $75.04 per barrel on the back of the WSJ report, due to an increase in global oil supply.

• USD/CAD trades around 1.3990 on Tuesday, remaining close to its recent highs despite little movement on the day.
• Ongoing progress toward a US-Iran agreement continues to weigh on Oil prices, pressuring the Canadian Dollar.
• Investors await the Fed’s monetary policy decision for clues on the future path of US interest rates.

USD/CAD trades around 1.3990 on Tuesday at the time of writing, little changed on the day as markets adopt a cautious stance ahead of the Federal Reserve’s (Fed) monetary policy decision.

The pair maintains a bullish bias, supported by the persistent weakness of the Canadian Dollar (CAD). Oil prices remain under pressure as investors continue to welcome diplomatic progress between Washington and Tehran. According to the Swiss Foreign Ministry, the memorandum of understanding between the United States (US) and Iran is scheduled to be signed on Friday in Bürgenstock, Switzerland. This development has fueled expectations of smoother global energy flows and contributed to the recent decline in Crude Oil prices.

Lower Oil prices remain a negative factor for the Canadian Dollar, as the currency is closely tied to Canada’s energy exports. This dynamic extends the pressure recently seen on the Loonie, while investors also monitor Canada’s economic outlook and the future policy direction of the Bank of Canada (BoC).

On the US side, the US Dollar (USD) remains broadly stable ahead of the Fed meeting. Investors widely expect policymakers to leave interest rates unchanged, but attention is focused on the Summary of Economic Projections and the updated dot plot. Market participants will look for signs of whether the recent rise in energy prices and higher inflation have encouraged policymakers to adopt a more hawkish stance regarding the future path of interest rates.

Meanwhile, the latest US economic data continue to point to signs of moderation in the labor market. The four-week average of the ADP Employment Change report showed that private companies added 25.5K jobs, down from the previous reading of 29K, suggesting a gradual slowdown in hiring activity.

In addition, the earlier surge in energy costs has already contributed to higher US inflation. The Consumer Price Index (CPI) rose to 4.2% YoY in May, its highest level since April 2023. However, improving relations between the United States and Iran have recently helped push Oil prices lower, which could ease some inflationary pressures over the medium term.

The combination of a resilient US Dollar ahead of the Fed meeting and a Canadian Dollar weighed down by lower Oil prices is therefore keeping USD/CAD near its recent highs, with investors now awaiting the Federal Reserve’s updated economic projections for guidance on the pair’s next directional move.

• EUR/USD stalls below its 200-day EMA on Tuesday, even after last week's first ECB rate hike since 2023.
• Kevin Warsh chairs his first FOMC on Wednesday, with a hold priced in but a hike seen as the likelier year-end move.
• The energy shock that pushed both central banks hawkish is fading fast as the US-Iran deal sinks Crude Oil.

EUR/USD has gone almost nowhere since the weekend's deal headlines, and Tuesday was more of the same: a dip that held above 1.1550, a grind back to the 1.1600 handle, and a hard stall at the 200-day Exponential Moving Average (EMA) sitting just overhead. The frustration for Euro bulls is that the currency is carrying a genuinely hawkish domestic story into Federal Reserve (Fed) week and still cannot get out of its own way.

Frankfurt already pulled the trigger

The European Central Bank (ECB) raised rates last Thursday for the first time since 2023, lifting the deposit rate to 2.25% and reversing eight straight cuts. Christine Lagarde leaned hawkish and rejected the idea that this was a one-off insurance move, while the bank marked its inflation forecasts higher across the horizon. This is the hawkish turn the market is still only waiting on from the Fed, and the Euro has already banked it.

The follow-through has been steady rather than loud. Several desks now pencil in another hike as soon as September, and even Philip Lane, usually among the Council's more cautious voices, struck a hawkish tone on Tuesday. German investor expectations swung back to positive in the same session for the first time since winter, though current conditions stayed deeply negative, so this is hope, not a recovery anyone can see yet. With core inflation stuck near 2.5%, the Council has cover to keep going; on the trajectory that drives this pair, the Euro is arguably ahead of the Dollar, not behind it.

Warsh holds the only card that matters

None of that has helped, because the market has reduced this week to one question: what Kevin Warsh does on Wednesday. His first meeting as Fed Chair brings a near-certain hold, with the Federal Open Market Committee (FOMC) set to leave the range at 3.50% to 3.75%. The intrigue sits in the Summary of Economic Projections (SEP), which Warsh, a longstanding skeptic of forecasting and forward guidance, may downplay or scrap outright. The deeper irony is political: Donald Trump installed Warsh to deliver cuts, yet a Consumer Price Index (CPI) print running at 4.2% and a firm labor market have markets pricing roughly 60% odds of a December hike, with no cut showing anywhere on the curve through 2027.

The shock that justified both hikes is evaporating

The genuinely awkward part is that both central banks pivoted hawkish on the same catalyst: an energy shock from the Iran war that drove Crude Oil toward $120 and lifted inflation forecasts. That shock is now reversing. The US-Iran framework agreement announced over the weekend reopens the Strait of Hormuz, Crude Oil has collapsed back toward $80, and the Dollar slid to a 10-day low on Monday as the inflation premium bled out. The ECB, in other words, hiked on June 11 into the top of an oil spike that began reversing days later, and Wednesday's Fed could be the first official acknowledgment that the energy-inflation story is fading. It is worth remembering the deal is not yet signed; the formal version is slated for Friday in Switzerland, the nuclear file has been punted, and this administration has a habit of announcing more than it delivers.

What lands before Warsh speaks

Wednesday front-loads the data before the main event. Final May Harmonized Index of Consumer Prices (HICP) figures arrive at 09:00 GMT and should confirm core holding near 2.5%, more confirmation of the ECB's hawkish lean than a catalyst. US Retail Sales at 12:30 GMT carry more weight, feeding the growth-versus-inflation tension Warsh has to address. Then the decision at 18:00 GMT and the press conference at 18:30 GMT, where a new Chair's words carry outsized weight.

Resistance: A daily close back above the 200-day EMA, sitting a touch above 1.1600, is the first hurdle; clearing it opens 1.1650 where the 50-day EMA waits, then the 1.1700 handle. The daily Stochastic Relative Strength Index (Stoch RSI) is turning up from the lower half, leaving room to push.

Support: Tuesday's dip held above 1.1550, making it the line that matters on a pullback; losing it exposes 1.1500 and the early-June lows.

Bias: Tilts higher on a multi-session view. The rate math has quietly shifted the Euro's way, with the ECB already hiking while the Dollar's year-end hike premium leans on an oil spike that is deflating by the day. A dovish-leaning Warsh is the catalyst that lets EUR/USD finally reclaim the 200-day EMA; a hawkish surprise is the risk, and a daily close back under 1.1550 would say the Dollar won the week.

EUR/USD daily chart

• BoJ raises short-term interest rate to 1.00% from 0.75%, the highest level since 1995.
• The central bank signaled further tightening remains possible if inflation risks persist.
• BoJ’s decision to pause the bond taper from April 2027 limits Yen strength and keeps USD/JPY supported.

The USD/JPY pair rose slightly around the intervention zone of 160.40 on Tuesday, as the Japanese Yen (JPY) struggles to gain strong traction even after the Bank of Japan (BoJ) raised interest rates to their highest level in more than three decades.

The BoJ lifted its short-term policy rate to 1.00% from 0.75%, in a widely expected move as policymakers continued to focus on upside inflation risks. The decision was backed by a 7-1 vote, while Deputy Governor Shinichi Uchida signaled that the central bank remains prepared to tighten further if inflation persists.

However, the Yen failed to rally sharply as the BoJ also adopted a more cautious stance on bonds. The central bank decided to pause its bond-buying taper from April 2027 onward, while continuing to purchase roughly ¥2 trillion in Japanese government bonds per month.

This suggests that while the BoJ is moving further away from ultra-loose monetary policy, it still wants to avoid excessive volatility in the Japanese government bond market.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 160.45, maintaining a constructive bullish bias as it hovers just below nearby resistance at 160.47. The pair remains supported above both the 20-period Simple Moving Average (SMA) at 160.24 and the 100-period SMA at 159.85, suggesting the broader uptrend is still intact despite the latest consolidation. The Relative Strength Index (RSI) at 58 stays in positive territory without being overbought, hinting that buyers retain control but may need a clear break over 160.47 to trigger fresh upside momentum.

On the topside, immediate resistance is aligned at 160.47, where a sustained break would open the way for further gains in the near term. On the downside, initial support is seen at the horizontal level near 160.32, followed by the 160.24 band, where a price floor converges with the 20-period SMA, and then 160.15. Deeper losses would expose the 100-period SMA at 159.85, which acts as the key medium-term support maintaining the bullish structure.

(The technical analysis of this story was written with the help of an AI tool.)

• Gold holds above $4,300 as traders await further details on the US-Iran peace framework.
• Lower Oil prices and a weaker US Dollar support Bullion ahead of the Fed's interest rate decision due on Wednesday.
• RSI recovers from oversold territory, but XAU/USD remains below key long-term moving averages.

Gold (XAU/USD) holds above the $4,300 mark on Tuesday as traders await further details on the peace framework between the United States (US) and Iran. At the time of writing, XAU/USD trades around $4,325, after retreating from an intraday high of $4,355.

Iran's Foreign Minister Abbas Araghchi warned that any Israeli attack on Lebanon or continued occupation of its territory would constitute a violation of the interim agreement with the US.

Meanwhile, Hezbollah's Media Relations Office said the group has received assurances from Iran that Tehran will not sign a final nuclear agreement with the US unless Israel withdraws from Lebanon.

US President Donald Trump said he considers the Lebanon war a "minor" conflict and that the Iran deal can survive. However, Trump reiterated that "all hell will break out" if Iran attempts to obtain a nuclear weapon.

A weaker US Dollar (USD) and easing Oil prices are helping the metal stay on the front foot for a fourth consecutive trading day. Still, it lacks follow-through buying as investors remain reluctant to place aggressive bets until the final agreement is formally signed on Friday.

The pullback in Oil prices has calmed inflation fears after surging energy costs drove global inflation higher in recent months. In turn, it could ease pressure on major central banks, particularly the Federal Reserve (Fed), to keep interest rates higher for longer.

As a non-yielding asset, Gold typically performs well when interest rates are lower. With that in mind, traders are now turning their attention to the Fed's monetary policy announcement on Wednesday.

While the Fed is widely expected to leave interest rates unchanged, any hawkish signals could weigh on Gold, especially with inflation running well above the central bank's 2% target.

Christopher Wong at OCBC noted that "for Gold to regain stronger upside momentum, a more durable improvement in the external environment is needed and this would include softer Oil prices, yields to ease further and clearer evidence that Fed hawkish repricing has peaked."

The longer-term outlook for Gold remains supported by central-bank demand. According to the World Gold Council's (WGC) 2026 Central Bank Gold Reserves Survey, 45% of respondents expect their gold reserves to increase over the next 12 months.

The report noted that central banks have accumulated an average of 1,000 tonnes of Gold annually over the past four years, double the average pace recorded during the previous decade.

Technical analysis: RSI recovers but broader bearish bias remains intact

Technically, XAU/USD remains under pressure as it holds below both the 200-day and 100-day Simple Moving Averages (SMAs), keeping the near-term bias bearish despite the recent attempt to stabilize from lower levels.

The Relative Strength Index (RSI) on the daily chart has recovered to 44 but stays below the neutral 50 line, while the Moving Average Convergence Divergence (MACD) histogram remains negative, hinting that downside momentum is easing rather than reversing decisively.

On the topside, initial resistance is located at the 200-day SMA near $4,458, with a stronger barrier higher at the 100-day SMA around $4,755, where the broader bearish structure would start to be challenged on a sustained break.

On the downside, the next notable cushion emerges at the horizontal level near $4,000, where buyers would be expected to show more interest if sellers extend the recent decline.

(The technical analysis of this story was written with the help of an AI tool.)

• The Dow Jones Industrial Average printed a fresh all-time high, extending the rally sparked by the US-Iran ceasefire.
• Crude Oil's slide is unwinding the war-driven inflation spike that pushed rate markets toward hikes.
• Kevin Warsh chairs his first FOMC meeting on Wednesday, with markets still pricing roughly 60% odds of a December hike.

The Dow Jones Industrial Average pushed to a fresh all-time high near 52,100 on Tuesday, capping a two-day surge that is almost entirely about one thing: the apparent end of the war in Iran. Trump's announced ceasefire, which commits Washington and Tehran to reopening the Strait of Hormuz and lifting the naval blockade, has sent Crude Oil tumbling from its wartime peak and dragged the conflict's inflation premium down with it. The awkward detail is that the Federal Reserve (Fed) opens its first meeting under new Chair Kevin Warsh on Wednesday, and the rate market is still leaning the other way.

The peace trade is doing all the work

The rally's engine is Crude Oil, not earnings. The war that erupted in late February shut roughly a fifth of global supply behind a mined Strait of Hormuz and drove prices toward $120, feeding the inflation spike that dragged the Dow to the 45,000 region in April. With the guns apparently silent, Crude Oil has slid back into the mid-$70s, and the read-across is simple: lower energy costs, a fading inflation impulse, and less reason for the Fed to stay aggressive. The logic is sound, but nothing has been signed; earlier truces in this conflict collapsed before the ink dried, leaving a tape priced for success exposed if the choreography slips.

The hawk Trump hired

The uncomfortable part for the bulls is who is running Wednesday's meeting. Warsh was Trump's pick, chosen by a President who has spent months demanding lower rates, yet he arrives with inflation at a three-year high and a rate market positioned for tightening, not easing. CME FedWatch puts the odds of at least one hike by December near 60%, with a single quarter-point move to a 3.75% to 4.00% range the most likely outcome. The funds rate has held at 3.50% to 3.75% since December, and virtually nobody is pricing a cut this year. The man installed to deliver cuts is instead inheriting a market that only wants to know how many are coming.

Warsh is also hard to position around because of his open skepticism of forward guidance. He has signaled a preference for livelier, more contentious meetings, content to let committee disagreement show rather than hand markets a tidy rate path. April already produced four dissents, the most divided the Fed has been in over three decades, and a Chair who prizes that friction will not paper over it. For a market trained across fifteen years to expect hand-holding, a debut built on withholding it is a risk on its own.

Wednesday is the real catalyst

Nobody expects the funds rate to move; the decision lands at 18:00 GMT, the press conference at 18:30 GMT, and the outcome is close to a foregone conclusion. The market-moving content sits everywhere else: whether the committee drops its easing bias for a neutral stance, whether the fresh dot plot now shows hikes on the horizon, and how Warsh chooses to communicate in his first press conference. If the dots validate the hawkish lean already in the rate market and Warsh offers no reassurance, a Dow priced for peace has room to wobble. The asymmetry runs both ways: a measured debut could spark another leg higher.

On the charts, the daily trend remains firmly higher, and the daily Stochastic Relative Strength Index (Stoch RSI) near 45 sits far from overbought despite the record. The intraday picture is more tired: the spike faded fast and the 5-minute Stoch RSI has rolled toward oversold near 19, a sign the burst has run its course even as the broader trend holds.

Resistance: Tuesday's record near 52,100 is the line in the sand; a clean break and hold above it opens blue sky with no overhead supply to lean on.

Support: The breakout shelf around 51,800 is the first floor, with Tuesday's session low close to 51,650 beneath it. A deeper unwind only puts the trend in question near the 50,000 area, where the rising 50-day Exponential Moving Average (EMA) sits.

Bias: Bullish while 51,800 holds and the ceasefire stays on track, but this is not a level to chase into the Fed. Warsh's debut and an unsigned deal are two live binaries, and a market priced this cleanly has more to lose on a stumble than to gain on confirmation. Buy weakness toward support while the deal holds; treat a decisive loss of 51,800 as the sign the peace-and-disinflation trade is unwinding.

Dow Jones 5-minute chart