Market Overview
- The global market experienced significant volatility due to escalating conflicts in the Middle East, with the Dow Jones Industrial Average (DJIA) dropping from early gains.
- The Indian Rupee weakened against the US Dollar due to safe-haven flows following US strikes on Iranian nuclear sites, but later found support from robust domestic data and cooling Crude Oil prices.
- The GBP/USD pair rose from a low of 1.3369 as the possibility of a July rate cut was signaled.
- The US Dollar Index weakened due to hints of a potential rate cut in July and rising tensions in the Middle East.
- Gold prices rebounded due to escalating geopolitical tensions between Iran and the US, leading to safe-haven flows.
Fundamental Analysis
- Major economic events included mixed PMI data from the US and India, dovish remarks from the Fed, and escalating geopolitical tensions in the Middle East.
- The Reserve Bank of India (RBI) may intervene if the Rupee weakens further, highlighting its role in maintaining price stability and managing exchange rate volatility.
- FOMC Governor Michelle Bowman signaled openness to cutting rates at the next meeting if inflation remains low.
- ECB President Christine Lagarde testified before the European Parliament, noting weaker economic prospects for Europe.
Technical Analysis
- For EUR/USD, technical analysis suggests a bullish bias above 86.50, with 87.00 as a key level.
- GBP/USD faces resistance at the 20-day SMA of 1.3508 after a rise from a low of 1.3369.
- The Dollar Index is hovering near the 20-day SMA, with potential support at 98.00 and resistance at the 50-day SMA.
- Gold technical analysis shows prices consolidating below key resistance levels, with support near $3,342.
- AUD/USD is currently trading around 0.6426, down approximately 0.38% on the day, after rebounding from key support near 0.6400.
Conclusion
- The market outlook remains cautious due to escalating geopolitical tensions and mixed economic data.
- Potential trading opportunities may arise from key support and resistance levels identified in the technical analysis.
- Investors should closely monitor central bank statements, economic data releases, and geopolitical developments for potential market impacts.
