Equity Analysis:

Australia ASX 200 Stock Index

Market Overview:

The Australian Securities Exchange index closed almost flat on Monday at 8,822, as gains in logistics, industrial services and financials offset weakness in electronic technology, consumer shares and healthcare. Sentiment remained fragile after two consecutive sessions of losses, although reports suggested that U.S. and Iranian officials had agreed on a roadmap for a final agreement within 60 days. Traders are also waiting for U.S. inflation data due later this week for clues on the Federal Reserve’s policy path, while the local market is focused on May CPI and labour data, which could influence expectations for the Reserve Bank of Australia’s next move after it kept rates unchanged last week. SGH Ltd rose 3.3% after announcing a plan to buy back up to AUD 500 million of shares, while two of the big four banks gained between 0.3% and 0.6%. On the other hand, Wisetech Global plunged 16.1% after police launched an investigation into allegations involving visa misconduct and exploitation by its founder. Other underperformers included Xero (-3.5%), TPG Telecom (-3.2%) and Nextdc Ltd (-2.8%).

Technical Analysis:

At the start of the week, the ASX 200 extended its high-level pullback and consolidation. The index closed at 8,821.6, down 7.1 points or -0.08%, with light turnover and volume clearly lower than last Friday. The 20-day moving average is at 8,845. Monday’s close below the 20-day line means the short-term bullish support has failed and the near-term bias has weakened. The close was also slightly below the 50-day moving average, meaning the short-term bull-bear pivot has been lost and downside pressure is clear. The 200-day line is near 8,775, and the index remains firmly above this long-term bull-bear boundary; the medium-term trend therefore remains bullish, with the current move best described as a short-term correction and consolidation. In terms of moving averages, the short-term average has crossed below the medium-term average, forming a short-term death cross, while the medium- and long-term averages are still diverging upward. This is a technical correction after an advance. The 14-day RSI is around 40, within neutral territory and not oversold below 30, suggesting that near-term downside momentum is limited and there is no strong impulse for a deep sell-off. However, the RSI is below the 50 midline, indicating fading bullish momentum. The MACD DIF line has crossed below the signal line, forming a short-term death cross, while the green histogram has widened slightly, releasing a near-term correction signal.

Nikkei 225 Index (JP225)

Market Overview:

The Nikkei 225 rose 1.55% to close at 72,354, while the broader Topix gained 1.24% to 4,095. Both benchmarks set new highs on Monday, as Japanese companies linked to the global AI infrastructure boom continued to drive the market higher. Domestic equities also advanced as oil prices fell further after Washington and Tehran reportedly agreed on a roadmap for a final agreement within 60 days, easing concerns after both sides in the Lebanon-related conflict renewed threats. Meanwhile, investors are awaiting the latest Japan PMI data for clues on economic conditions, as well as the Bank of Japan’s summary of opinions from the June meeting, after policymakers raised rates by 25 basis points to 1%. Among the notable gainers, Furukawa Electric rose 8.7%, Murata Manufacturing gained 4.3%, JX Advanced Metals climbed 12.4%, Ibiden advanced 7.6% and SoftBank Group rose 1.9%.

Technical Analysis:

The Nikkei 225 closed at 72,353.96, up 1,103.90 points or 1.55%, setting a new record closing high. The market opened lower, probed the downside, then staged a fast V-shaped reversal before trending higher through the session and holding near the highs into the close. Bullish support was very strong. Monday’s candle was a full-bodied bullish candle with a short lower shadow, completely covering the early downside gap and forming a textbook dip-buying reversal pattern. Both the closing price and intraday high refreshed historical records, further strengthening the bullish trend. Volume contracted during the early sell-off, showing limited selling pressure. As the market turned positive and accelerated, volume expanded, with active inflows into AI and semiconductor heavyweights. Full-day volume was slightly higher than the previous session, so the price rise was supported by turnover. The daily chart remains in an upward channel, with recent lows rising and highs breaking higher. There is no topping divergence or bearish candlestick signal. The major uptrend that began from 66,000 remains intact. The RSI(14) is at 72.4, in overbought territory above 70, indicating stretched short-term bullish momentum and the possibility of an intraday or next-day technical pullback. However, in a strong trend, overbought readings can persist for several days and do not automatically signal a reversal. MACD shows no bearish divergence; medium-term momentum remains upward and there is no clear bearish reversal signal.

Currency Analysis:

U.S. Dollar Index

The U.S. Dollar Index traded around 101.00 on Monday, still close to its highest level since May 2025, as investors assessed the latest progress in U.S.-Iran peace talks while awaiting key U.S. inflation data. Reports showed that Washington and Tehran had agreed on a roadmap for a final agreement within 60 days, easing concerns after both sides exchanged new threats related to the Lebanon conflict. Market participants are now focused on this week’s U.S. Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge. Last week, the Fed left rates unchanged but adopted a more hawkish tone. Nine of 19 policymakers now expect at least one rate hike before year-end, and markets are increasingly pricing the possibility of a hike as early as September. Elsewhere, traders continue to watch the yen amid rising intervention concerns, and the pound amid political uncertainty in London.

Technically, the 100.00 psychological level and the 100.18 area, which aligns with the 9-day moving average, have become the key bull-bear boundary for this move. If the index continues to trade above 100.00-100.18, it suggests trend capital is still comfortable with elevated valuations. A fall back below the upper rail would indicate that post-breakout chasing demand is starting to come under pressure. What dollar bulls now need most is follow-through data that supports the idea that “rate hikes are not a tail risk, but a tradable scenario.” The most underestimated risk in the current setup is that the Dollar Index is near 101. If inflation cools faster than markets have priced, rate futures and short-end yields would likely adjust first, and the Dollar Index could retest the 100.00-100.18 zone. On the upside, watch 101.13, last week’s high, and the 101.50 handle.

Today, consider shorting the U.S. Dollar Index at 101.10, with a stop loss at 101.20 and targets at 100.70 and 100.65

AUD/USD

The Australian dollar edged lower at the start of the week to around 0.7000, remaining close to a ten-week low, as uncertainty around U.S.-Iran peace talks weighed on risk sentiment while markets awaited key domestic data this week. The focus will likely be on CPI and employment data, both of which are important for the Reserve Bank of Australia’s next policy move. Headline inflation for May is expected to rise to 4.4% from 4.2% in the previous month, while the core measure may rise to 3.5% from 3.4%, with both readings above the central bank’s target. For employment, forecasts point to a net gain of 25,000 jobs in May, while the unemployment rate may ease to 4.4% after reaching a four-and-a-half-year high of 4.5% in the previous month. Meanwhile, the U.S. and Iran agreed on a 60-day roadmap toward a final agreement, with negotiations set to continue this week. However, concerns remain after the two sides recently traded threats over the Lebanon conflict, while Tehran claimed it had again closed the Strait of Hormuz.

From a technical perspective, AUD/USD has shown some resilience below the 61.8% Fibonacci retracement of the March-May advance. However, the recent break below the 100-day simple moving average at 0.7085 and the 50% retracement level favours bearish traders. In addition, the MACD remains slightly negative and flat, reinforcing the weak tone but not pointing to a momentum-driven sell-off. The RSI near 37 suggests rising downside pressure rather than a clearly oversold condition. This indicates that the path of least resistance remains lower, and any meaningful rebound attempt may still be treated as a selling opportunity. That said, a clear break and sustained move below the 61.8% retracement near 0.7000 would be needed to support further losses toward the 78.6% retracement around 0.6926, before stronger structural support near the recent swing low around 0.6832. On the upside, initial resistance sits at the 50.0% retracement of 0.7051, followed by the 100-day simple moving average at 0.7085.

Today, consider going long AUD at 0.6990, with a stop loss at 0.6980 and targets at 0.7050 and 0.7040.

GBP/USD

Sterling erased earlier losses and traded at 1.3250, near a two-month low and on track for a weekly decline of more than 1% against the U.S. dollar, amid political uncertainty, shifting global risk appetite and stronger-than-expected UK retail sales. Domestic attention intensified after Greater Manchester Mayor Andy Burnham won the Makerfield by-election, further strengthening his position as a potential challenger to Prime Minister Keir Starmer. Meanwhile, planned U.S.-Iran peace talks in Switzerland were abruptly cancelled, renewing doubts over the durability of the Middle East ceasefire reached over the weekend. On policy, the Bank of England kept rates unchanged at 3.75% and maintained a cautious tone, lowering its forecast for peak inflation in Q4 2026 from 3.6% to 3.25%. The Federal Reserve also kept rates unchanged, although officials signalled that tightening risks remain. Money markets now expect both the Bank of England and the Fed to raise rates by at least 25 basis points this year.

On the daily chart, GBP/USD has established an overall medium-term bearish trend. The pair has retreated from the swing high at 1.3867 and recently found only modest stability after probing a new low at 1.3163, leaving the broader tone weak. The moving-average system forms a complete bearish pressure structure, with the short-term MA20 at 1.3377, MA50 at 1.3456, and the medium- to long-term MA100 and MA200 all trending lower. Several previous moving-average support levels have now turned into strong resistance. MACD lines are below the zero axis, showing that bearish momentum has not yet faded. RSI is in the weak zone and, although close to the 30 oversold boundary, there is no clear bullish divergence. The short-term stabilisation is therefore only a small oversold repair, with no reversal signal. Structurally, the pair remains in a bearish channel of lower highs and lower lows. The previous low at 1.3159 and the latest low at 1.3162 form a near-term support zone. The first resistance level is at the 1.3300 round number, followed by the MA20 at 1.3377, where rebound pressure is likely to be heavy.

Today, consider going long GBP at 1.3240, with a stop loss at 1.3230 and targets at 1.3290 and 1.3295.

USD/JPY

USD/JPY depreciated to around 161.50 per dollar on Monday, hovering near its weakest level since 1986, as repeated verbal intervention from Tokyo failed to halt the currency’s decline. Finance Minister Satsuki Katayama said the authorities were ready to take appropriate action against excessive currency volatility, reiterating earlier warnings. The yen has now given back all of its April 30 gains, when officials conducted a record-scale market intervention to support the currency. The latest decline has come despite the Bank of Japan’s continued policy normalisation, including last week’s 25-basis-point rate hike to 1%. The yen has also been pressured by heavy carry-trade activity, as investors continue to favour short-yen positions while the interest-rate gap between Japan and the United States remains wide.

The daily chart shows USD/JPY rising to around 160.70, close to last week’s high of 161.81, and maintaining a short-term bullish bias as it stays above the 14-day moving average at 160.52 and the 161.00 round-number zone. The pair remains supported by this rising moving average, while the daily RSI is around 70, indicating solid but not excessively extended upside momentum and suggesting buyers remain in control for now. On the downside, initial support lies at the 14-day moving average of 160.52 and the 161.00 round-number area. A break below this zone would signal weakening upside pressure and could trigger a deeper correction toward the 34-day moving average low at 159.35. On the upside, last week’s high of 161.81 remains an important resistance level for dollar bulls. A clean break above 162.00 would point to a fast, one-sided move, and could bring the Ministry of Finance back into the market.

Today, consider shorting USD at 161.70, with a stop loss at 161.85 and targets at 160.80 and 160.70.

EUR/USD

The euro hovered around 1.1430, its lowest level since mid-March, and is expected to fall by around 1% this week against a broadly stronger U.S. dollar. Market sentiment was hit after planned U.S.-Iran peace talks in Switzerland were abruptly cancelled, reviving doubts over the durability of the temporary agreement reached over the weekend to end the Middle East conflict. The Federal Reserve supported the dollar by keeping rates unchanged while signalling a more hawkish outlook in its latest projections. In Europe, attention is on the European Central Bank, which recently raised rates for the first time since 2023. Money markets now expect at least one additional ECB rate hike this year as officials remain firm on inflation. Pierre Wunsch said another hike could come as soon as next month if inflation pressures spread beyond energy, while Philip Lane suggested the eurozone economy may be able to absorb higher borrowing costs without losing momentum.

From a technical perspective, spot prices remain below the 34-period simple moving average at 1.1538 on the four-hour chart, maintaining a short-term bearish tone. In addition, MACD is in negative territory and RSI is hovering around 36. Together, these momentum indicators suggest that downside pressure remains even if EUR/USD attempts to stabilise above its recent swing low. As a result, any subsequent rebound is more likely to run into resistance near the former horizontal support area of 1.1538, the 34-period simple moving average, and 1.1528, the June 18 high, before the 1.1600 round number. The 200-period simple moving average at 1.1623 should act as strong resistance that bulls need to reclaim in order to ease the current bearish bias and open a more durable recovery. On the downside, a break below 1.1417, the June 19 low, and the 1.1400 round-number zone would expose EUR/USD to further weakness, as momentum still points lower toward the low 1.1300s.

Today, consider going long EUR at 1.1416, with a stop loss at 1.1405 and targets at 1.1475 and 1.1480.

Commodity Analysis:

WTI Spot Crude Oil

WTI crude fell below USD 74 per barrel on Monday, giving up earlier gains as investors responded to positive signs of progress in ongoing peace talks between the United States and Iran. According to a joint statement from Qatar and Pakistan, the two countries are facilitating talks in Switzerland, and both sides have agreed on a roadmap aimed at reaching a final agreement within 60 days. Oil prices rose sharply at the start of trading after President Donald Trump threatened new strikes if Hezbollah continued attacking Israel and warned Tehran not to close the Strait of Hormuz again. Iranian media later reported that Tehran had suspended talks in response to Trump’s comments, although sources familiar with the negotiations said discussions were still ongoing. Meanwhile, millions of barrels of crude continued to flow through the Strait of Hormuz over the weekend, while Gulf producers prepared to increase output.

Iran’s renewed closure of the Strait of Hormuz triggered concerns about crude supply disruptions, pushing WTI crude to gap higher during Monday’s Asian session and briefly approach USD 78. However, as the market gradually digested the geopolitical risk, prices pulled back from the highs to below USD 74.00. From a daily-chart perspective, WTI crude did gap higher on geopolitical news, but it failed to break effectively above the previous key resistance area, showing that overhead selling pressure remains. Prices are still trading within a phased correction channel, and the rebound looks more like a news-driven technical repair than a trend reversal. On the upside, focus on resistance in the USD 78.00 area, the week’s initial high, to USD 80.00. If prices cannot hold above that zone, oil may still return to its corrective trend. On the downside, watch support at USD 73.14, Monday’s low, and USD 72.90, the 200-day moving average. A break below these levels could allow bears to regain control.

Today, consider going long crude oil at 73.75, with a stop loss at 73.60 and targets at 76.00 and 77.00.

Spot Gold

Spot gold traded around USD 4,200 per ounce on Monday. Although geopolitical uncertainty supported prices, gold fell for a third consecutive week and closed at USD 4,155, weighed down by hawkish Fed signals and a stronger U.S. dollar. The new chair’s debut reinforced rate-hike expectations, while Middle East tensions lifted oil prices and added to inflation stickiness, which in turn pressured gold. Technically, the break below the 200-day moving average has made USD 4,000 a key psychological line. Central-bank buying still supports the long-term story, but short-term downside risk has not faded. A recent survey showed that only 10% of Wall Street analysts expect gold to rise, while 70% are bearish and 20% expect range-bound trading. Some analysts warn that the rebound from around USD 4,000 is increasingly looking like a technical bounce rather than a trend reversal, and the market is more inclined to view rallies as selling opportunities. Others expect gold to fall below USD 4,000 to confirm the bearish view.

From a technical perspective, gold’s position is also challenging. Since early June, prices have been hovering below the 20-day moving average at 4,338. This technical threshold, viewed by many traders as a bull-bear dividing line, has already been decisively broken. Gold is currently about USD 150 below its 200-day moving average, leaving many trend-following traders reluctant to rebuild long positions. Technical analysis shows a downtrend structure of lower highs and lower lows, with momentum indicators still bearish and not yet oversold, suggesting the decline may not be over. In terms of key support, the recent intraday low of USD 4,024, the June 11 low, is seen as a short-term “iron floor”; a break below it would open further downside. USD 4,000 is the market’s final psychological defence line and also a dense area of central-bank buying. Several institutions have cut their short-term gold targets sharply toward USD 4,000 and identified this level as the next key support. On the upside, watch the 20-day moving average at USD 4,338 and USD 4,355, last week’s high.

Today, consider going long gold at 4,185, with a stop loss at 4,180 and targets at 4,240 and 4,250.