USD INDEX
The USD had two distinct phases: initially weakening on the US/Iran agreement, and then strengthening after the Fed left rates unchanged, delivered with a definite hawkish tone which translated into higher rates for longer. Rising treasury yields along with favourable interest rate differentials (against other majors) also contributing. Technically the convincing break above the 100.00 mark and reaching the highest level in more than a year added to the strong uptrend. Resistance at 100.90 with support at 99.09.
S&P 500
The index started the week with a bullish move higher as the risk-on theme correlated with the USD sell-off based on the geopolitical optimism re. US/Iran agreement. However the Fed’s hawkish stance saw the USD rebound, stocks selling off and the battle between buyers and sellers begin. The indecision was confirmed with a doji-like candlestick to end the week. Interesting that the index held near it’s record highs despite a strengthening USD.
GOLD
The downtrend continues as sellers maintain control. The lack of demand for the metal suggests there are forces stronger than safe haven geopolitical concerns, for now. A strong USD, higher interest rates and perhaps lower inflation concerns as oil prices drop - all adding to the downtrend which has been in place since the start of the Middle East conflict. Note this is the lowest close since November 2025. Last week saw the pivotal $4000 tested, perhaps that level about to be tested again should the ISD rally continue. Resistance at $4380 with support at $4121.
BRENT OIL
While a fragile agreement is yet to be signed between US and Iran, prices continue to fall, confirming that oil is a future looking market trading on expectations of future supply, rather than current headlines. Brent continuing lower as the “war premium” has been priced out, with markets trading the theme that the conflict is more likely to de-escalate rather than a worst-case scenario materialize. Technically we see prices closer to pre-war levels - $70, than the relevant $100 mark which was convincingly broken to the upside when a pessimistic market feared the shock of supply concerns. Resistance at $84.10 with support at $76.24.
BITCOIN
Sellers erased last week’s limited gains, continuing to trade within a familiar narrow range (see price activity through April - October 2024). The cryptocurrency continues to trade more like a risk asset than a safe haven, struggling against a stronger USD and higher rate expectations which are currently driving market themes. Buyers aim to retake $80K in an attempt to reverse the trend, while sellers aim to break the $60K support area which has been successfully defended since the start of the year. Resistance at $67.2K with support at $62.2K.
