This week’s shortened US trading schedule due to Independence Day may compress volatility into early sessions, particularly ahead of critical releases such as the US jobs report and ISM data. Commodities remain firmly supported by elevated geopolitical risks, especially in the Middle East, while Asian markets react to evolving trade sentiment and regional PMI data.

KEY INDICATORS

Foreign exchange market

The US dollar holds near recent lows as trade and tariff tensions intensify ahead of the 9 July expiration of the current pause.

Global currencies remain firm, while safe-haven demand strengthens the Japanese yen and Swiss franc amid rising geopolitical risks.

Commodities & equities

Oil prices remain firm, with Brent hovering near multi-week highs due to ongoing uncertainty around the Strait of Hormuz and persistent Middle East tensions.

The broader commodity complex benefits from supply risks linked to geopolitical instability and anticipated OPEC+ policy shifts.

US and global equities continue to reach record highs through June and July, supported by subdued volatility—though analysts caution that markets may be underpricing the risk of tariff extensions, inflation surprises, and heightened geopolitical uncertainty.

Asian markets & key events

Asian equities rally alongside global markets, buoyed by optimism that the US tariff pause will be extended.

Regional currencies such as the Korean won (KRW) and Singapore dollar (SGD) remain sensitive to developments in US–Asia trade negotiations.

Key upcoming data releases include US ISM manufacturing and services PMIs on 1 and 3 July, and the June non-farm payrolls report on 3 July, which are expected to influence Federal Reserve rate expectations.

Markets will observe a partial holiday schedule, closing early on 3 July and fully on 4 July for US Independence Day.

MARKET MOVERS

Nasdaq 100

• Technical breakout: NQ recently broke above the 22,100 resistance level, with bullish momentum accelerating toward the all-time high range of 22,425–22,450. A daily close above this zone would confirm breakout continuation.
• Target projection (bullish): With the breakout in motion, upside targets are set at $23,150 (near-term) and $24,400–$24,850 in an extended move.
• Target projection (bearish): If price fails to hold above 22,425–22,450 or breaks below 21,750, a pullback to $21,600–$21,750 is likely, with deeper downside risk toward $20,970 and potentially $20,084.
• Opening expectation: NQ is expected to open the week slightly bullish, trading above Friday’s close near $22,300–$22,350, supported by strength in tech and easing trade sentiment.
• Primary support zone: $21,750–$22,000 (recent lows and key pivot region).
• Secondary support zone: $21,600–$21,500 (prior consolidation zone).
• Tertiary support zone: $20,970–$20,084 (deeper retracement territory).
• Strategy (bullish approach): Buy continuation above $22,450 with targets at $23,150 and $24,400–$24,850.
• Strategy (bearish approach): Short on rejection at $22,425–$22,450 or breakdown below $21,750, with targets at $21,600 and $20,970, possibly extending to $20,084.
• Stop-loss level: Below $21,750 for bullish positions; above $22,500 for bearish positions.
• Key catalysts this week: US non-farm payrolls (3 July), ongoing US–Canada trade commentary, and geopolitical headlines from the Middle East, which could drive risk sentiment and tech stock flows.

USD/JPY

• Technical breakout: USD/JPY has been consolidating within a triangle pattern, with support near ¥145.00 and resistance around ¥146.00–¥146.25. A daily close above this zone would confirm a bullish breakout, while a break below ¥145.00 could indicate a bearish reversal.
• Target projection (bullish): If the breakout continues, upside targets are set at ¥148.00–¥148.50 (near-term), with an extended move potentially reaching ¥149.00–¥150.00, supported by dollar strength and technical momentum.
• Target projection (bearish): A break below ¥145.00 opens the path toward ¥143.15–¥143.50, with a deeper decline possibly extending to ¥142.00–¥142.20 in a sustained downtrend.
• Opening expectation: USD/JPY is expected to open the week around ¥145.30–¥145.50 with a mild bullish bias, supported by safe-haven flows and anticipation of a technical breakout following last week’s test of resistance.
• Primary support zone: ¥145.00–¥145.10 (triangle base and 50-day EMA).
• Secondary support zone: ¥144.00–¥143.90 (prior breakout base and Fibonacci retracement).
• Tertiary support zone: ¥142.00–¥142.20 (200-day EMA and major support floor).
• Strategy (bullish approach): Buy continuation above ¥146.25, targeting ¥148.00 and ¥149.00–¥150.00.
• Strategy (bearish approach): Short on rejection at ¥146.00–¥146.25 or breakdown below ¥145.00, targeting ¥143.15 and ¥142.00–¥142.20.
• Stop-loss level: Below ¥145.00 for bullish positions; above ¥146.30 for bearish positions.
• Key catalysts this week: Geopolitical tensions (particularly US–Iran), commentary from the Fed and Bank of Japan (especially on 4 July), and positioning risk amid low summer liquidity, which may amplify directional moves.

Nikkei 225

• Technical breakout: The Nikkei has broken above key resistance near 38,340, confirming the start of a bullish C-wave based on wave analysis. This breakout signals accelerating upside momentum and a potential continuation of the trend.
• Target projection (bullish): Short-term upside targets are set at 39,500 (February monthly high), with an extended move potentially reaching 40,725–43,576 by early July, in line with broader wave and seasonal projections.
• Target projection (bearish): A reversal below 38,340 could open the path toward 36,675 (morning star reversal zone), with deeper downside risk extending toward the 35,000–36,000 area if momentum shifts.
• Opening expectation: The Nikkei is expected to open modestly higher around 40,150–40,200, supported by Friday’s rally, a softer yen, and easing trade tensions.
• Primary support zone: 38,340–38,400 (breakout pivot and short-term structure support).
• Secondary support zone: 36,675–37,000 (prior reversal zone and 20-day moving average).
• Tertiary support zone: 35,000–36,000 (broader retracement area).
• Strategy (bullish approach): Buy continuation above 38,400, targeting 39,500 and 40,725–43,576.
• Strategy (bearish approach): Short on rejection near 39,500 or breakdown below 38,340, targeting 37,000 and 36,675.
• Stop-loss level: Below 38,300 for bullish positions; above 38,600 for bearish positions.
• Key catalysts this week: US non-farm payrolls (3 July), continued easing in US–China trade tensions, and potential market-moving commentary from the Bank of Japan. Any shifts in global risk sentiment or yen valuation could directly impact the Nikkei’s trajectory.

NEWS HEADLINES

Geopolitical and trade tensions intensify

Trump’s remarks questioning NATO’s Article 5 commitments reignited transatlantic tensions, prompting sharp responses from European leaders.

Trade talks between the US and Canada were abruptly halted after disagreements over Canada’s proposed tech tax, raising the risk of renewed tariffs.

Political focus this week (30 June – 4 July) shifts to the NATO Summit, where defence spending pledges and alliance unity will be under scrutiny amid growing instability.

Dollar slips as euro and yen gain ground

The US dollar fell to its lowest level since 2021, pressured by expectations of Federal Reserve rate cuts and uncertainty surrounding the Fed chair’s future.

The euro climbed to a three-year high, while the yen also gained, supported by easing geopolitical tensions and a broader shift toward risk-on sentiment.

Ceasefire lifts global equities and tempers commodities

Brent and WTI crude prices retreated after surging earlier in the week, as a ceasefire between Iran and Israel reduced geopolitical risk premiums.

Gold posted its second consecutive weekly loss as investor focus turned to upcoming US PCE inflation data for direction on monetary policy.

The S&P 500 and Nasdaq closed at record highs, buoyed by dovish Fed expectations and optimism over resumed global trade talks.

The MSCI Asia-Pacific Index (excluding Japan) rose to its highest level since 2021, led by gains in Tokyo, Hong Kong, and Sydney.

Asian markets stabilised as fears over Strait of Hormuz disruptions eased, supporting regional equities.

However, Australia’s export outlook weakened as lower commodity prices and potential new US tariffs threatened resource-driven earnings through 2025–2026.

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