Forex News

• 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 $4,340, up 0.70% on the day

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.

Araghchi also said a new round of US-Iran talks will begin on Friday. The discussions will cover Iran's nuclear program, sanctions relief and the release of frozen Iranian assets.

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.)

National Bank of Canada (NBC) argues that Euro upside against the Dollar is likely to be limited, as relative growth and interest rate differentials still favor the United States. The bank highlights that European data remain mixed and that the European Central Bank is closer to easing than the Federal Reserve, constraining sustained EUR/USD gains in the coming months.

EUR/USD upside seen constrained

"We do not foresee a significant or sustained appreciation of the Euro against the US Dollar in the near term, as relative growth prospects and interest rate differentials continue to favour the United States."

"Although bouts of Dollar weakness could allow EUR/USD to test higher levels temporarily, we expect these moves to be short-lived given that the European Central Bank appears closer to easing policy than the Federal Reserve."

"Our central scenario is for EUR/USD to trade sideways with a slight downside bias, with rallies likely to encounter selling interest as long as US economic data remain comparatively robust and European indicators fail to show a convincing improvement."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• GBP/JPY recovers from intraday lows despite the BoJ's hawkish rate hike.
• Markets weigh the BoJ's slower balance-sheet reduction plans and still-negative real interest rates.
• Traders await UK CPI, PPI and labor market data ahead of the BoE's monetary policy announcement on Thursday.

GBP/JPY rebounds after a short-lived pullback on Wednesday as traders digest the Bank of Japan's decision to raise interest rates. At the time of writing, the cross is trading around 215.10, recovering from an intraday low of 214.53.

The Japanese Yen (JPY) strengthened after the BoJ ended a three-meeting pause and raised its policy rate by 25 basis points (bps) to 1.00% from 0.75%, the highest level since 1995.

Deputy Governor Shinichi Uchida said the BoJ will "continue to raise the policy interest rate in response to developments in economic activity, prices and financial conditions."

Despite the hawkish messaging, the Yen has failed to gain traction. The muted reaction may reflect the BoJ's decision to moderate the pace of its balance-sheet reduction from April 2027 and the fact that real interest rates in Japan remain negative.

According to BBH, "the swaps curve price in 75% odds the BOJ hikes by a total of 50bps in the next twelve months. The bar for a more aggressive BOJ tightening path is high because almost all underlying CPI indicators eased further below 2% in April."

Geopolitical uncertainty is also keeping traders on the sidelines, as markets await the formal signing of the proposed US-Iran peace agreement.

Attention now turns to the Bank of England's (BoE) interest rate decision on Thursday, where policymakers are widely expected to leave the Bank Rate unchanged at 3.75% for a fourth consecutive meeting. Traders will closely watch the voting split and policy guidance for clues on the future path of interest rates.

Ahead of the decision, markets will first digest the UK's Consumer Price Index (CPI) and Producer Price Index (PPI) reports on Wednesday, followed by labor market data on Thursday.

BNY’s Bob Savage notes that the Bank of Japan delivered a hawkish 25bp rate hike to 1.0% and will continue scaling back its JGB purchase program. The BoJ signaled confidence in underlying inflation despite slowing headline CPI. Markets remain focused on central bank policy, with investor risk appetite also supported by easing Middle East tensions and AI-related enthusiasm.

BoJ tightening and JGB tapering stance

"Markets remain focused on central bank policy."

"The BoJ delivered a hawkish 25bp hike to 1.0% and will continue to scale back its JGB purchase program, while the RBA kept rates unchanged at 4.35% but maintained a tightening bias."

"BoJ remains hawkish: Japan’s central bank has raised rates to 1.0% and reaffirmed plans to gradually reduce its JGB purchases, signaling confidence in underlying inflation despite a slowing headline CPI."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

OCBC’s Sim Moh Siong argues that recent risk-on moves following the US‑Iran understanding have only produced a modest pullback in US yields and the Dollar. He highlights AI-driven US growth, Fed event risk and Oil dynamics as supporting USD resilience. The bank remains neutral on the Dollar and prefers FX cross trades over outright USD shorts.

USD resilience despite risk-on backdrop

"The limited pullback in US yields and a resilient USD suggest markets remain cautious on hawkish Fed risks. Strong AI-driven investment continues to support labour demand and reinforces the resilient US growth outlook relative to peers. Positioning also looks constrained ahead of this week’s FOMC meeting, reducing appetite to sell the USD into a key policy event."

"Oil dynamics also limit USD downside. Brent has fallen to around USD83 per barrel, near many year-end forecasts. We expect Brent to drift towards USD80 by year-end, with risks skewed higher."

"Limited USD Pullback: Energy prices fell sharply and risk assets rallied after the US and Iran agreed on a memorandum of understanding on 14 June, with signing targeted for 19 June. US yields and the broad USD eased only modestly, despite a sharp rebound in EM oil importer currencies such as IDR, INR and PHP."

"While a US-Iran agreement is supportive, durability remains untested. Even if the Strait of Hormuz reopens, normalisation will be gradual. Mine clearance, insurance reinstatement, restarting shut-in production and precautionary stockpiling are likely to slow further downside in oil prices."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

BNY’s Bob Savage highlights that the Reserve Bank of Australia kept its cash rate unchanged at 4.35% but maintained a clear tightening bias. The Australian central bank emphasized that further rate hikes remain possible if inflation pressures persist. This stance keeps policy expectations skewed toward additional tightening rather than cuts in the near term.

Australian policy steady with hawkish tilt

"The BoJ delivered a hawkish 25bp hike to 1.0% and will continue to scale back its JGB purchase program, while the RBA kept rates unchanged at 4.35% but maintained a tightening bias."

"RBA holds but remains vigilant: The Australian central bank has kept its cash rate at 4.35% while emphasizing that further tightening remains possible if inflation pressures persist."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Rabobank’s FX Strategy team notes that USD/JPY is little changed after the latest BoJ meeting, with markets more focused on the upcoming Fed decision and new Fed President Warsh. The BoJ raised its policy rate to 1% and adjusted its JGB purchase plans, but implied rates still price limited tightening. Rabobank expects further BoJ policy signals to support the Japanese Yen and a lower USD/JPY over a three‑month horizon.

BoJ tightening, Fed focus and Yen outlook

"While no policy change is expected from the Fed for a while, any hints from Warsh tomorrow regarding his favoured communication methods and policy frameworks may provide fresh direction for USD/JPY."

"This means that if there were a rapid rise in long term interest rates, the BoJ could increase the amount of JGBs it purchases."

"Implied market rates indicate only another 15 bp of tightening is priced in on a 6-month view."

"This suggests that there is scope for the BoJ to signal support for the JPY if it can accelerate the pace of policy tightening."

"Our forecast of a move back to USD/JPY on a 3-month view assumes the BoJ signals further policy tightening is likely to be forthcoming before the end of the year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

National Bank of Canada (NBC) expects USD/CAD to remain broadly range-bound, with recent moves reflecting shifting expectations for Federal Reserve and Bank of Canada policy. The bank notes that softer US data and a more cautious Fed could cap Dollar strength, while Canadian fundamentals and oil prices may limit sustained CAD weakness over the coming months.

USD/CAD seen broadly range-bound

"We continue to see USD/CAD trading in a broad range over the coming months, with neither the US Dollar nor the Canadian Dollar showing a clear catalyst for a sustained trend at this stage."

"While softer US data and a more cautious Fed stance could prevent a significant appreciation of the greenback, we also believe that lingering concerns about global growth and commodity demand will limit the extent of any Canadian Dollar outperformance."

"Our baseline scenario assumes that USD/CAD will oscillate within its recent trading band, with upside risks emerging if US economic resilience forces markets to further scale back Fed easing expectations, and downside risks materializing if global risk sentiment improves and oil prices remain supported."

"As long as USD/CAD holds below the upper end of its recent range, we would be reluctant to chase the pair higher, preferring instead to look for opportunities to fade rallies toward resistance levels identified by our technical analysis team."

"Conversely, a sustained break below the lower bound of the range would be needed to signal that a more durable Canadian Dollar appreciation cycle is underway, something that would likely require a combination of stronger domestic data and a more pronounced shift in global risk appetite."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

US President Donald Trump on Tuesday outlined the next steps in the Iran agreement, saying the deal's text will be released in the coming days and that the Strait of Hormuz should be fully reopened by Friday.

Key Quotes

We will have the Strait of Hormuz fully open by Friday.

We will release the text of the Iran agreement in a formal setting.

We expect the second stage of the Iran deal to move quickly.

The memorandum of understanding clearly states that Iran will not have a nuclear weapon.

We will hold a news conference on the Iran agreement in the coming days.

We will review the memorandum of understanding with the media shortly.

This agreement is about one thing: ensuring that Iran never acquires a nuclear weapon.

We will send the Iran agreement to Congress for review

We are in a position to let Russia's oil waivers lapse.