market outlook

Market Summary and Key Outlook (as of June 23, 2025)

Josh

— 2 min read

Global Financial Condition Highlights

  • Geopolitical tensions remain the dominant driver: U.S. strikes on Iran’s nuclear sites, threats to close the Strait of Hormuz, and continued uncertainty are keeping risk-off premiums high.
  • Federal Reserve: dot-plot still shows two cuts this cycle. Powell’s June press conference was broadly balanced, underpinning modest dollar weakness but no clear signal on timing beyond July.
  • Oil prices are highly sensitive to Middle East developments; a real Hormuz closure would be the most damaging scenario for global risk assets.

Currencies & Forex Markets

  • EURUSD (Bullish): Holding above long-term trendline support near 1.1450. Clean technical structure (wedge breakout) and fading short-term Iran risk are underpinning a positive bias toward further upside—targeting mid-1.15s–1.16s on a dovish Fed backdrop.
  • USD (Neutral–Slightly Bearish): Dovish Fed expectations weigh on the dollar, but renewed geopolitical flare-ups drive transient safe-haven demand. Overall, mixed drivers leave USD in a trading range.
  • JPY & CHF (Bullish on Risk-Off): These true safe havens strengthen sharply during any escalation; initial moves in 2025 have replayed the 2022 pattern of JPY/CHF gains on headlines.
  • CAD & NOK (Bullish vs. Non-energy Currencies): Rising oil primes both to outperform commodity peers (AUD, NZD, GBP), though U.S. dollar strength in a flight-to-quality keeps USDCAD elevated.
  • AUDJPY (Bullish Long-Term): Long AUDJPY remains intact, with wide stops to weather short-lived risk-off spikes; the longer-term swing trade is unchanged.

Major Asset & Equity Outlooks

  • Gold (Bullish): Despite short-term liquidations in equity sell-offs, structural central-bank buying and eventual Fed cuts support a year-end target near $3,700/oz and $4,000/oz by mid-2026.
  • Oil (Bullish): Geopolitical risk premium is already in spot prices; a formal Hormuz closure could push Brent above $100/bbl, triggering broader energy-inflation concerns and further safe-haven flows.
  • Equities (Neutral–Slightly Bearish): Indices remain choppy as markets price in both “quick, limited” military actions and the prospect of protracted Middle East uncertainty. Key support levels on futures should be watched for second-leg downside.
  • Crypto (Bullish Long-Term, Cautious Short-Term): Small strategic positions in Bitcoin and Solana hold through turbulence, with targets of ~$140k for BTC and ~$500 for SOL, but traders must respect wide volatility swings on risk-off headlines.

Summary

  • Middle East developments continue to dominate market sentiment.
  • A genuine de-escalation would trigger a rally in risk assets (EUR, equities, crypto) and relief in energy-linked currencies, while a further flare-up keeps safe havens (USD, JPY, CHF, Gold) bid.
  • Fed policy remains on track for eventual rate cuts, which will reinforce dollar weakness once geopolitical risk recedes.

Overall: Cautious over the near term due to Iran tensions; maintain selective bullish positioning in EURUSD, gold, oil-linked currencies, and longer-term crypto and AUDJPY, while respecting wide volatility and well-defined risk limits.

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