Japanese markets gained strength as a weaker yen and positive investor sentiment boosted equities and commodities. Despite some cautious economic data, overall momentum remains upbeat with potential for further gains.
Japanese equities surge on softer yen and strong risk appetite
Japanese stocks surged notably on Wednesday, with the Nikkei 225 closing at 38,832.65 – its highest level in four months – driven by a softer yen and renewed investor confidence in risk assets.
The Bank of Japan’s decision to hold interest rates and slow its withdrawal from the bond market was widely expected and should help reassure investors, though there will be plenty of interest in Governor Ueda’s press conference, analysts said. https://t.co/jH4vjHDbii
The index climbed 1.7% during the session, gaining momentum in the afternoon after breaking above the 38,140.65 intraday support. The Nikkei peaked at 38,904.65 before slightly retreating to close near its highs.
This bullish sentiment extended to commodity-linked markets. Osaka Exchange rubber futures for November delivery rose 2.69%, settling at 305 yen per kilogram, reaching an intraday peak of 305.6 yen, the highest since late May.
Weather and currency trends support commodity and equity gains
Weather disruptions continue to underpin the rally, as heavy rainfall hampers rubber tapping operations in Japan and major producers like Thailand.
Flash flood warnings issued for 20–23 June in Thailand have heightened concerns over potential crop damage and near-term supply constraints.
Currency moves further boosted Japanese equities. The yen slid to a one-week low of 145.445 against the US dollar, enhancing the appeal of Japanese stocks to foreign investors.
The inverse relationship between the yen and the Nikkei remains intact, with a weaker yen supporting exporters and attracting overseas demand for yen-denominated assets.
However, Japan’s recent macroeconomic data added a cautious note. Exports declined in May for the first time in eight months, largely due to lower automobile shipments.
Ongoing US tariffs are pressuring Japanese car exports, raising concerns about potential weakening in rubber demand if manufacturing activity slows.
Despite this, immediate supply tightness coupled with speculative buying appears to be the dominant factor driving prices currently.
Technical analysis: Momentum and resistance levels to watch
The Nikkei 225 demonstrated strong gains during the latter part of Wednesday’s trading, closing at 38,832.65 – up more than 1.7% from the opening level.
Buyers drive late-session rally toward key resistance zone, as seen on the VT Markets app.
After a period of consolidation through much of 17 and early 18 June, the index broke decisively above the 38,140.65 support, triggering a sharp rally that hit an intraday high of 38,904.65 before easing slightly near the close.
Technical indicators confirm the bullish momentum. The MACD histogram displayed several robust green bars, signalling upward pressure, although the MACD line’s slope is flattening, suggesting possible short-term fatigue.
Price action is approaching resistance in the 38,850 to 38,900 range, a zone that has previously capped advances.
Meanwhile, the 5-, 10-, and 30-period exponential moving averages (EMAs) remain bullishly aligned and sharply diverging, reinforcing the strength of the current trend.
Given persistent adverse weather forecasts and prevailing risk-on sentiment in Tokyo, the Nikkei and rubber futures may continue to face upward pressure through the week.
Traders should closely monitor evolving weather conditions and Bank of Japan policy announcements, as these factors could trigger either a pause or acceleration in price movements.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Bull Traps: Understanding How They Work and How to Spot Them
A bull trap happens when an asset’s price breaks above a key resistance level, tricking traders into thinking an uptrend is starting, only to reverse and drop back down. Recognizing a bull trap early can help protect your capital. In this article, we’ll cover what a bull trap is, how to spot one, and strategies to avoid or profit from it.
What Is a Bull Trap?
A bull trap is a deceptive market scenario where a price appears to break out upward, creating the illusion of a strong uptrend, only to quickly reverse direction and move downward. Traders often fall for this false signal, buying into what they believe is a legitimate breakout, only to be “trapped” when the price suddenly falls back below the breakout point.
In essence, a bull trap lures traders into making impulsive buys under the assumption that the price will continue to rise. However, it quickly becomes evident that the market was not in an uptrend, but rather setting up a false rally to shake out unsuspecting traders.
How Does a Bull Trap Work?
A bull trap typically forms when the price breaks above a well-established resistance level, encouraging traders to buy, thinking that the trend is about to surge higher. However, after the initial surge, the market quickly reverses direction, often driven by a lack of follow-through buying or a change in market sentiment.
For example, imagine a stock that has been trading in a range between $50 and $55. When the stock breaks above $55, traders rush in, expecting the price to continue rising. However, the breakout is short-lived, and the stock falls back below $55. This is a classic bull trap.
How to Identify a Bull Trap
Identifying a bull trap can be tricky, but there are key signs traders should watch out for:
1. Break of Resistance with Low Volume
A breakout above resistance without a corresponding increase in volume can indicate a false move. A real breakout usually has higher trading volume as more participants join in.
2. Failure to Hold Above Resistance
If the price moves above a key resistance level but fails to sustain itself above that level, it could signal a bull trap. This often happens within a few hours or days of the breakout.
3. Divergence in Indicators
Indicators like the Relative Strength Index (RSI) or MACD may show a divergence when the price rises, meaning that momentum is not supporting the move. If the price moves up but the indicators are weakening, this is a potential warning sign.
4. False Candlestick Patterns
Candlestick patterns such as Doji or Engulfing Candles after a breakout can signal a reversal, indicating that the breakout may have been a bull trap.
Example of a Bull Trap
A notable example of a bull trap occurred with Tesla in 2024. Tesla’s stock surged past $300, breaking new highs. Many traders believed the stock would continue to rise, given its strong performance over the preceding months. However, after hitting around $320, the price quickly reversed and dropped back below $270, trapping traders who had bought in during the rally.
This sharp reversal left many traders with substantial losses, demonstrating how quickly a bull trap can take shape, even in high-profile stocks like Tesla.
How to Avoid a Bull Trap
To avoid falling into a bull trap, traders must stay alert and make informed decisions. Here are some effective strategies to minimize the risk of being trapped:
1. Wait for Confirmation
Never buy immediately after a breakout. Wait for the price to hold above the breakout point for at least a few hours or even a day. Confirm that the breakout is genuine before committing capital.
2. Use Volume as an Indicator
Ensure that breakouts occur with substantial volume. A breakout with low volume is a strong warning that the move might be a false one.
3. Set Stop-Loss Orders
Protect yourself from falling into a bull trap by setting stop-loss orders just below the breakout level. This allows you to exit the trade quickly if the price reverses.
4. Look for Divergences
Watch for discrepancies between the price and technical indicators. If the price is rising but momentum indicators like RSI are not confirming the move, it might be a signal to stay cautious.
How to Trade a Bull Trap
Successfully trading a bull trap involves recognizing the pattern early and acting decisively. Follow these steps to trade a bull trap effectively:
Step 1: Understand How a Bull Trap Works
A bull trap occurs when the price breaks above a key resistance level, leading traders to believe an uptrend is beginning. However, the price quickly reverses and moves lower, trapping those who bought into the breakout. Understanding this pattern is crucial for successfully navigating the market.
Step 2: Select a Regulated Broker
Choose a trusted, regulated broker that offers a secure trading environment, fast execution, and advanced charting tools. A reliable broker like VT Markets provides the necessary resources to identify and trade bull traps with ease.
Step 3: Create & Fund Your Account
Register with your chosen broker and complete the verification process. Once your account is set up, deposit funds to begin trading. Ensure that your account is properly funded to take advantage of potential opportunities when the bull trap pattern forms.
Step 4: Identify the Bull Trap
Look for a sudden breakout above a key resistance level, followed by a quick reversal. The price action should show clear signs of moving back below the resistance level. This is when the bull trap is set, and traders who bought into the breakout will be trapped.
Step 5: Confirm the Reversal
Before taking any action, confirm that the trend has genuinely reversed. Use technical analysis like candlestick patterns, momentum indicators, and volume analysis to verify that the price is indeed moving lower and not just experiencing a minor pullback.
Step 6: Open a Position
Once the reversal is confirmed, enter a short position, betting that the price will continue to fall. Timing is crucial here, as entering the position too early or too late can impact your ability to capitalize on the movement.
Step 7: Implement Risk Management Strategies
To protect yourself from unexpected market movements, set stop-loss orders just above the recent high or key resistance level. This will limit potential losses if the market moves against your position, helping you trade with confidence.
Step 8: Monitor & Stay Informed
Keep a close watch on market news, price action, and key technical indicators. Stay informed about any events or announcements that might influence the market. Adjust your position or strategy if new developments suggest the trend may change again.
Bull Trap vs Bear Trap: Key Differences
While both bull traps and bear traps involve market deception, the key difference lies in the direction of the trap, as shown in the table below:
Feature
Bull Trap
Bear Trap
Market Behavior
Price surges above a key resistance level, misleading traders into thinking a bullish trend is forming.
Price drops below a key support level, tricking traders into expecting a bearish trend.
Trader Reaction
Traders anticipate an uptrend and enter long positions, buying the asset.
Traders expect further declines and short the asset, betting on lower prices.
Price Movement
After the price rises briefly, it reverses direction and falls, leaving traders who bought in trapped.
Following the initial drop, the price quickly rebounds, trapping traders who shorted the asset.
Trap Impact on Traders
Traders who bought the asset during the supposed breakout face losses as the price drops.
Traders who shorted the asset are caught with losses as the price moves back up.
Resulting Trend
The price typically declines after the reversal, causing losses for those who entered long positions.
The price usually increases after the rebound, leading to losses for those who shorted the asset.
Example Scenario
A stock breaks above the $100 resistance, rises to $105, then quickly falls back below $100, trapping buyers who expected further gains.
A stock breaks below $100 support, drops to $95, then rebounds back above $100, catching short sellers off guard.
In a bull trap, traders believe that an upward breakout above resistance is a genuine trend reversal, and they enter long positions. However, after the price rises briefly, it quickly falls, reversing the breakout. Traders who bought during the rally are then left with losses as the price moves lower again.
On the other hand, a bear trap occurs when the price breaks below a significant support level, misleading traders into thinking that a downtrend is starting. They short the asset, expecting the price to continue falling. However, after the initial decline, the price rebounds, catching short sellers off guard and causing them to cover their positions at a loss.
By distinguishing between a bull trap and a bear trap, traders can better understand the market’s behavior, avoid false signals, and reduce the risk of making costly mistakes. Recognizing these deceptive patterns allows traders to make more informed decisions and act strategically to protect their investments.
A bull trap can be a costly mistake if not identified and managed properly. However, by understanding how a bull trap works and following the right strategies, traders can turn these deceptive market moves into profitable opportunities. Key actions include carefully identifying the breakout, confirming the reversal with technical indicators, and implementing risk management measures such as stop-loss orders. With vigilance, patience, and a solid trading strategy, you can avoid falling victim to a bull trap and make smarter trading decisions.
Start Trading Today with VT Markets
Ready to take advantage of market opportunities? VT Markets offers a secure, intuitive platform designed to cater to traders of all experience levels. With competitive spreads, fast execution, and advanced trading tools like MetaTrader 4 (MT4) and MetaTrader 5 (MT5), you can confidently navigate the markets and avoid costly traps like the bull trap.
A bull trap occurs when an asset’s price breaks above a key resistance level, giving the illusion of a bullish trend. However, the price quickly reverses and falls back below the resistance level, trapping traders who bought into the rally.
2. How can I spot a bull trap?
To spot a bull trap, look for a price surge above resistance levels followed by a sudden reversal. Key indicators such as RSI divergence, low volume on the breakout, and candlestick patterns like Doji or Engulfing can help confirm the presence of a trap.
3. How can I avoid falling for a bull trap?
To avoid a bull trap, wait for confirmation after the breakout. Look for increased volume and confirmation from technical indicators before entering a position. Using stop-loss orders below the breakout level can also help limit potential losses.
4. How do I trade a bull trap?
To trade a bull trap, enter a short position once you confirm the reversal. After the price breaks above resistance and starts to fall back, short the asset, expecting further declines. Use technical indicators and price action to ensure the reversal is genuine.
5. Can a bull trap occur in various markets?
Yes, bull traps can occur across all markets, including stocks, forex, and cryptocurrency. While the dynamics might differ, the underlying principle remains the same: misleading price movements that create false breakout signals.
6. How long do bull traps typically last?
The duration of a bull trap can vary, typically lasting from a few minutes to several days, depending on the volatility of the asset and overall market conditions. Quick reversals are common, but some traps can last longer before fully playing out.
7. Can I profit from a bull trap?
Yes, traders can profit from a bull trap by shorting the asset once the breakout is confirmed as false. By timing the reversal correctly and entering a short position, traders can capitalize on the price decline following the bull trap.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Global markets dipped as tensions in the Middle East and uncertainty around central banks made investors more cautious. Traders are now watching for clearer signals to understand where markets might go next.
Geopolitical tensions drag global markets lower
The S&P 500 edged lower on Tuesday, ending the session at 6018.10 after briefly testing resistance near 6057.4.
The index declined by 0.38%, reflecting a cautious mood across global markets as traders responded to renewed geopolitical uncertainty and central bank developments.
European and Asian stock markets also moved lower, with early European futures pointing to continued weakness.
Investor nerves were rattled overnight following intensified military exchanges between Israel and Iran, dampening expectations of a short-lived conflict.
Sentiment further deteriorated when former US President Donald Trump reportedly called on Iranians to evacuate Tehran and convened a national security meeting. His early exit from the G7 summit added fuel to speculation about broader US involvement.
Oil and gold rise as investors seek safety
Although the White House denied any immediate military action, Defence Secretary Pete Hegseth stated that the US is prepared to protect its regional interests if necessary.
The escalation in conflict pushed oil prices sharply higher, with Brent and WTI crude futures gaining another 2% in Asian trading – extending the rally that began last Friday, which has already seen a 7.5% surge.
While energy stocks benefitted from rising commodity prices, broader equity markets remained under pressure. Gold prices remained firm near recent highs, supported by safe-haven demand.
In currency markets, the impact was more muted. The US dollar regained favour as a safe-haven asset, even as markets maintained expectations of a potential interest rate cut by the Federal Reserve later in the year.
The euro and Japanese yen held steady following central bank comments, while bond yields remained flat as investors awaited further direction.
Technical analysis
Looking ahead, market attention is firmly on upcoming central bank meetings. The Bank of Japan, as anticipated, left interest rates unchanged but signalled a more gradual pace of bond tapering.
The move was interpreted as a sign of ongoing caution rather than a shift towards policy normalisation. Market reaction was limited, with the yen and Japanese government bond (JGB) yields showing little change.
S&P 500 clings to 6000 amid fading momentum, as seen on the VT Markets app.
On the 15-minute chart, the S&P 500 continues to display signs of exhaustion after a gradual climb stalled at the 6057.4 resistance level.
The index has since retreated towards the 6000–6012 support area, with momentum indicators suggesting a potential loss of bullish steam.
The MACD histogram has flattened, and the MACD and signal lines are converging — typically a sign of weakening upward momentum.
Since bouncing from the 5950.1 low on 14 June, the index has been supported by gains in technology stocks.
However, current price action suggests consolidation, with the S&P 500 hovering just above the 30-period moving average.
A sustained break above the 6050–6060 resistance zone has yet to materialise, which has capped gains in recent sessions.
With geopolitical risks still unresolved and several key central bank decisions on the horizon, market volatility may increase towards the end of the week. Traders are likely to remain cautious, adjusting positions as new data and policy signals emerge.
Bear Trap: What Is a Bear Trap and How Does It Work
A bear trap occurs when prices fall below support, misleading traders into believing a downtrend is starting, only for the market to quickly reverse. This article will show you how to identify a bear trap and trade them successfully for potential profits. Whether you’re a novice or an experienced trader, mastering this strategy can enhance your trading outcomes.
What Is a Bear Trap?
A bear trap is a deceptive market pattern that occurs when the price of an asset, such as a stock or currency, experiences a sharp decline, leading traders to believe that a downtrend is beginning. However, this initial drop is quickly reversed, causing traders who sold in anticipation of further declines to suffer losses as the market moves back in the opposite direction. In essence, a bear trap tricks traders into thinking a bearish trend is in motion, only to trap them in losing positions when the market turns bullish again.
How Does a Bear Trap Work?
A bear trap typically unfolds when an asset’s price breaks below a key support level, leading traders to believe that a downward trend is forming. As the price falls, traders begin shorting the asset, betting that the decline will continue. However, the market suddenly reverses and moves higher, catching these traders in their short positions, resulting in significant losses.
The bear trap occurs because market participants react to short-term movements without considering the broader context or waiting for confirmation signals. This type of trap can be seen in various markets, including stocks, forex, and precious metals.
Spotting a bear trap requires attention to certain market signals. Here are key indicators to help identify a bear trap:
1. Price Breaks Below Support
The first sign of a bear trap is when the price falls below a well-established support level, making traders believe a bearish trend is underway.
2. Quick Reversal
After the initial drop, the price rapidly rebounds, often within a short time frame, reversing the direction of the market.
3. Volume Patterns
A bear trap is often accompanied by higher-than-usual volume during the initial drop, followed by a decrease in volume during the reversal.
4. Candlestick Patterns
Bearish candlestick patterns, such as a bearish engulfing pattern, followed by a reversal candlestick like a hammer or bullish engulfing pattern, can signal that a bear trap is forming.
Example of a Bear Trap
Imagine a stock trading around $100 per share. Over the course of a few days, the price begins to decline and breaks through a key support level at $95. Traders interpret this as the beginning of a downtrend and start shorting the stock. However, just as the price hits $94, the market quickly reverses and begins climbing back up. Within hours, the price rises above $100 again, forcing those who shorted the stock to buy back in at a higher price to cover their positions.
This scenario creates a bear trap, as traders who sold in anticipation of further price declines are now trapped with losses as the market shifts direction.
How to Avoid a Bear Trap
Avoiding a bear trap requires careful analysis and patience. Here are some strategies to reduce the risk of falling into a bear trap:
1. Wait for Confirmation
Before acting on a price break below support, wait for confirmation signals. For example, look for a sustained price movement or additional indicators (like moving averages) to confirm the trend.
2. Use Stop-Loss Orders
To protect yourself from the risks of a bear trap, always set stop-loss orders. This helps limit your losses if the market reverses unexpectedly.
3. Look for Divergence
Watch for any divergence between price and technical indicators. If prices are falling but momentum indicators (like the RSI or MACD) are not confirming the downtrend, it could signal that the market is not as weak as it appears.
4. Focus on Broader Market Trends
Always consider the broader market trends before making a decision. A sudden drop in price could just be a temporary correction in a larger bullish trend.
How to Trade a Bear Trap
Successfully trading a bear trap involves recognizing the pattern early and using it to your advantage. Here are some steps to follow:
Step 1: Understand How a Bear Trap Works
A bear trap occurs when the price drops below a key support level, leading traders to believe a downtrend is starting. However, the price quickly reverses, trapping those who shorted the asset.
Look for sharp declines in price followed by a sudden reversal, especially when key support levels are breached. This setup indicates that a bear trap may be forming.
Step 5: Wait for Confirmation
Before acting on the reversal, confirm the trend change using tools such as candlestick patterns, volume spikes, and momentum indicators. Waiting for confirmation helps avoid jumping into a false signal.
Step 6: Enter a Position
Once the reversal is confirmed, enter a long position, expecting the price to rise as the trap is set. Entering at the right time is crucial to capitalizing on the reversal.
Use stop-loss orders to protect your position in case the market moves against you. Setting a stop-loss just below the recent low can help minimize potential losses from unexpected market moves.
Step 8: Monitor and Stay Informed
Keep track of market news and continue monitoring price action, volume, and momentum indicators to stay on top of any changes. Adjust your trading strategy as needed based on new developments.
Bear Trap vs. Bull Trap: Key Differences
While both bear traps and bull traps involve market deception, the key difference lies in the direction of the trap, like the table below:
Feature
Bear Trap
Bull Trap
Market Behavior
Price falls below key support level, creating the illusion of a bearish trend.
Price rises above key resistance level, creating the illusion of a bullish trend.
Trader Reaction
Traders believe a downtrend is beginning and short the asset.
Traders believe an uptrend is starting and buy the asset.
Price Movement
After the initial drop, the price quickly rebounds, trapping traders in their short positions.
After the initial rise, the price reverses and moves lower, trapping traders in their long positions.
Trap Impact on Traders
Traders who short the asset are caught with losses as the market reverses.
Traders who bought into the rally are trapped with losses as the price moves lower again.
Resulting Trend
The market generally moves higher after the rebound, catching short sellers off guard.
The market generally moves lower after the reversal, causing losses for those who bought in.
Example Scenario
A stock breaks below $50 support, falls to $48, and then jumps back above $50, trapping short sellers.
A stock breaks above $50 resistance, rises to $52, and then falls back below $50, trapping buyers.
In a bear trap, traders are tricked into thinking that an asset’s price will continue to fall after breaking below key support levels. They short the asset, betting on further declines. However, the price quickly reverses, moving upward and catching those traders in losing positions as they’re forced to buy back at higher prices to cover their shorts.
In contrast, a bull trap creates the illusion of a bullish breakout. When prices break above resistance levels, traders rush to buy, expecting the asset to continue rising. However, the price soon reverses, moving back down and trapping these traders in their long positions, forcing them to sell at a loss.
By recognizing these key differences between a bear trap and a bull trap, traders can better navigate false signals and avoid unnecessary losses. Both traps rely on short-term market movements that seem significant but ultimately lead to reversals, and understanding how to spot them can help traders make more informed and profitable decisions.
In Summary
A bear trap occurs when the price drops below a key support level, leading traders to believe a downtrend is forming, only for the market to quickly reverse and trap those who shorted. Recognizing this deceptive pattern helps traders avoid losses and make more informed decisions by using confirmation signals and strong risk management strategies.
A bear trap occurs when the price of an asset falls below a key support level, leading traders to believe a downtrend is forming, only for the market to reverse and move higher, trapping those who sold in anticipation of further declines.
2. How can I avoid falling into a bear trap?
To avoid a bear trap, wait for confirmation signals before acting on a price break, use stop-loss orders, and consider broader market trends. This approach will help you minimize the risk of making decisions based on false signals.
3. How do I trade a bear trap?
To trade a bear trap, look for signs of a price reversal after a sharp decline, then enter a long position when the market confirms the reversal. Be sure to use stop-loss orders and risk management strategies to protect your trade.
4. What is the difference between a bear trap and a bull trap?
A bear trap occurs when the market falls below support and then quickly rebounds, while a bull trap happens when prices rise above resistance and then reverse, leading to losses for those who bought in.
5. Can a bear trap occur in all types of markets?
Yes, bear traps can occur in any type of market, including stocks, forex, commodities, and cryptocurrencies. The key is identifying the sharp price decline followed by a rapid reversal, regardless of the asset class.
6. How long do bear traps typically last?
Bear traps can vary in duration. They may last anywhere from a few minutes to several days, depending on the market conditions and the strength of the reversal. Traders should remain vigilant and monitor market signals closely.
7. Are there specific times when bear traps are more common?
Bear traps are more common during periods of high market volatility or during news events that trigger sharp, sudden price moves. These can create false signals and lead to bear traps.
8. Can I profit from a bear trap after it forms?
Yes, if you can identify the reversal after the bear trap forms, you can profit by entering a long position once the market confirms the upward trend. Make sure to use proper risk management strategies to protect your trade.
9. How do I know if I’m caught in a bear trap?
If you’ve shorted an asset and notice a sharp reversal with the price quickly moving back in the opposite direction, you may be caught in a bear trap. It’s crucial to use stop-loss orders and remain vigilant to manage the situation effectively.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Mid‑June brings critical central bank decisions, inflation data, and geopolitical developments that are likely to impact global markets. Investors will be focused on the Fed, BoE, BoJ, and Swiss National Bank, alongside volatility in commodities and regional equity reactions. Here’s the full snapshot.
KEY INDICATORS
Foreign exchange market
The Fed is expected to hold rates at 4.25–4.50% during its 17–18 June meeting, with rate cuts likely postponed to September–October as inflation nears target and the job market cools.
The Swiss National Bank is likely to deliver a 25bp rate cut during its June meeting, potentially pushing rates into negative territory at around –0.25%.
UK CPI data due on Friday is expected to shape the Bank of England’s policy stance ahead of a key statement likely on 19 June.
Commodities & equities
Brent crude rallied 4.3% — its sharpest gain since October — on renewed Middle East tensions, pushing prices close to $70 despite expectations of a surplus by year-end.
The bank maintains its forecast for oil to stay in the low‑to‑mid $60s range for 2025–26 but warns that a major Middle East crisis could drive prices up to $120–130.
With inflation softening but tariff risks lingering, investors will closely watch Fed signals and trade developments for market direction.
The FTSE 100 reached a record high of around 8,884 last week, even as UK GDP contracted by 0.3%, indicating support from global rotation and a weaker sterling.
Asian markets & key events
The Bank of Japan is expected to keep rates on hold at 0.5% on 17 June, with a slower bond taper likely due to global uncertainty.
The upcoming PBOC meeting may include guidance or action on policy easing, which could loosen Asian financial conditions.
Fresh tariffs remain a major concern, as unpredictable trade moves could disrupt FX markets and equities.
The World Bank has downgraded its global growth forecast for 2025 to around 2.3%, citing tariffs and trade barriers as major headwinds.
MARKET MOVERS
XAU/USD
Gold is approaching a critical resistance zone around $3,403–$3,404 (5 June high).
A sustained move above this level — with strong volume — would confirm a bullish breakout, opening the door toward record highs.
Bullish scenario: A breakout could propel XAU/USD toward $3,435, followed by the next milestone at $3,500, reflecting the April highs.
Bearish scenario: If resistance holds, prices may retrace to retest $3,345, and a deeper pullback could target $3,318–$3,310.
Expect the week to begin on a cautiously bullish note, with XAU/USD hovering between $3,360–$3,370 as traders position for potential Fed and geopolitical cues.
Primary support: $3,345–$3,346 — recent breakout point and 38.2% Fibonacci level.
Secondary support: $3,318–$3,320 — near the 20 SMA and prior consolidation bottom.
Tertiary support: ~$3,290 — the base of the current consolidation zone.
Bullish strategy: Go long on a confirmed breakout above $3,403.
Bearish strategy: Short on rejection around $3,430–$3,435 if momentum stalls.
Neutral / wait and see: If XAU/USD remains in the $3,360–$3,403 range, consider holding off until a decisive breakout or breakdown occurs.
Key catalysts this week: US PPI & CPI releases (Wednesday), geopolitical developments in the Middle East, Federal Reserve guidance on rate cuts.
Gold remains highly sensitive to US inflation readings and geopolitical tensions, particularly in the Middle East. Always employ disciplined risk management and monitor real-time economic data and central bank commentary closely.
Gold prices rose to near two-month highs on Friday after Israel launched a major strike on Iran, hitting “dozens” of military and nuclear targets and spurring demand for traditional safe-haven assets.
At 11:10 AM GMT, spot gold jumped 0.9% to $3,417.10 an ounce, close to the record high of $3,500 reached in April. Gold futures for August rallied 1% to $3,436.90 per ounce. Both are on course for weekly gains of around 3%.
EUR/USD
EUR/USD is coiling within a triangular range between 1.1455–1.1380, where a breakout above 1.1550 would confirm a bullish move, while a break below 1.1380–1.1400 may trigger a bearish reversal.
Bullish scenario: a breakout above 1.1550 opens the path to 1.1650, and potentially 1.1750–1.1800 if momentum persists.
Bearish scenario: a breakdown below 1.1380 could slide EUR/USD towards 1.1300–1.1330, with deeper retracement possible to 1.1200–1.1268 by month-end.
The pair is expected to open the week around 1.1480–1.1500, factoring in recent USD weakness and positioning ahead of US inflation (CPI/PPI) and Fed commentary.
Primary support: 1.1455–1.1440 – top of the current range and retest level.
Tertiary support: 1.1300–1.1330 – mid-term support and prior consolidation zone.
Bullish approach: enter on breakout above 1.1550–1.1560; target 1.1650 then 1.1750.
Bearish approach: initiate short positions on breakdown below 1.1380; aim for 1.1300, then 1.1268.
Neutral / range trading: in the absence of a breakout, consider range-bound trades between 1.1380–1.1550, buying near support and selling near resistance.
WTI recently broke above $63.30 resistance on the 6th of June, signalling bullish momentum and validating a breakout from a bull-flag pattern.
Bullish scenario: with the breakout confirmed, upside targets lie at $66.40–$66.60, extending to $68.99, where WTI stalled last week.
Bearish scenario: if momentum falters, a pullback to $63.00–$63.10 is likely, with deeper support around $61.70–$61.80.
Oil is expected to open around $66.00–$66.20, sustaining the recent rally amid geopolitical worries and easing trade tensions that have bolstered investor appetite.
Primary support: approximately $66.37–$66.81, anchored by the 50-EMA and key Fibonacci retracement levels (50%–38.2%).
Secondary support: $65.57, near the 78.6% retracement zone.
Tertiary support: $63.30–$63.95, representing the recent breakout and channel base.
Bullish strategy: Consider long positions on dips into $66.20–$66.40. Targets: $68.99, then $70.00+ if momentum holds.
Bearish strategy: Consider short positions if WTI falls below $66.00 and dips under the 50-EMA (approximately $66.37). Target: $63.30, and possibly $61.70.
Neutral / wait-and-see: If WTI trades between $66.40–$68.99, consider range trading or wait for a clear breakout or reversal.
Israel launched large-scale airstrikes on Iranian nuclear and military sites, including Natanz, prompting Iranian drone retaliation.
The sixth round of US–Iran nuclear talks took place in Oman amid rising hostilities, with markets watching closely for diplomatic progress or escalation.
Rising Middle East tensions triggered a sharp oil price surge, pushing Brent crude above $75, with fears of supply disruptions in the Strait of Hormuz.
OPEC+ signalled potential output increases through summer to address growing demand and ease supply concerns.
Market reactions and commodity outlook
Oil’s rally intensified “stagflation” fears as inflation pressures rise alongside slowing global growth.
US futures and Asian stocks retreated amid geopolitical risks, while the S&P 500 faces pressure despite projections of reaching 6,500.
Investors remain cautious due to supply chain issues, AI sector risks, and trade uncertainties.
Currency moves and regional market trends
The US dollar weakened to 2025 lows as investors sought safe havens in the yen and Swiss franc.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.
Oil markets and global equities were jolted by rising geopolitical tensions after a military strike in the Middle East. The escalation sparked panic buying in crude and a sharp shift in risk sentiment, sending energy prices higher and global stock markets lower amid renewed uncertainty.
WTI soars, global markets slide after Israeli airstrike
Crude oil prices surged on Friday following a pre-emptive Israeli airstrike targeting Iranian nuclear facilities. The escalation has sparked fears of a broader conflict in the Middle East, sending shockwaves through global markets.
West Texas Intermediate (WTI) crude futures jumped by $6.16, reaching $74.20 per barrel, while Brent crude also advanced to $75.36. This represents a sharp daily gain of nearly 9%, as traders brace for possible disruptions to oil supply from a region critical to global exports.
Israeli authorities described the strike as a preventive measure against an imminent threat. Reports suggest that the operation killed Hossein Salami, commander of Iran’s Revolutionary Guards, and potentially several senior nuclear scientists.
Iran has since declared a state of emergency, with market participants expecting a retaliatory wave of missile and drone attacks. These developments have intensified geopolitical risk, adding to oil market volatility.
The fallout extended beyond commodities. US equity futures slumped, with S&P E-mini contracts down 1.7% and Nasdaq futures retreating by 1.8%. European markets followed suit, as STOXX 50 futures fell 1.6%.
In Asia, Japan’s Nikkei declined by 1.3%, South Korea’s KOSPI slipped 1.1%, and the Hang Seng Index dropped 0.8%, breaking a streak of strong gains that had recently lifted global equities to record highs.
Oil traders are now watching closely for any further escalation, especially potential threats to shipping lanes like the Strait of Hormuz—a key artery for global oil transportation.
WTI crude has rebounded sharply from intraday lows near $67.10, rallying to just above $74.60. This impressive move is supported by a bullish MACD crossover, with the faster EMA line and histogram showing strong upward momentum.
Oil surges to $74.60 resistance, momentum gaining strength, as seen on the VT Markets app.
On the 15-minute chart, short-term moving averages (5- and 10-period) have turned higher and crossed above the 30-period moving average, reinforcing bullish control.
The $72.15–$72.20 zone now appears to offer short-term support, while resistance is likely around $74.60–$74.80.
Trading volume has increased alongside the rally, with each upward surge accompanied by longer bullish candles and strengthening MACD signals. Minor pullbacks have remained shallow, suggesting healthy consolidation phases rather than exhaustion.
Market outlook: Risk sentiment under pressure
This geopolitical shock arrives at a delicate time for global markets already dealing with trade uncertainty and slowing economic data.
Additional tension comes from US President Donald Trump’s renewed threats to impose unilateral tariffs, raising concerns for export-reliant economies.
The rapid escalation in the Middle East risks derailing the recent uptrend in global equities and commodity-linked currencies.
Oil prices may continue to rise if the conflict deepens. However, any diplomatic breakthroughs or signs of de-escalation could lead to swift reversals.
For now, safe-haven assets and energy markets are taking centre stage.
VT 
