The Baker Hughes report shows a decrease in the oil rig count by five, bringing the total to 474. The natural gas rig count remains steady at 101.

Overall, the total rig count has decreased by six, resulting in a new total of 578 rigs.

Rig Activity Movement

This update reflects a modest but clear movement in domestic drilling activity. Baker Hughes reports a total reduction in operating rigs, with oil rigs down by five and the remainder of the change stemming from broader adjustments in mixed or miscellaneous operations. Natural gas rigs, however, have held flat at 101, not shifting from the previous print. The full count of active rigs is now 578 across the United States.

What does this actually suggest? Activity in oil production is slightly pulling back, at least from a drilling standpoint. When rig counts dip in this fashion, it often indicates either a reactive approach to recent price movements or a pause in capital expenditure planning by operators. This could reflect efficiency improvements or, alternatively, shortened investment horizons as producers wait for further clarity in demand trajectories.

While natural gas rigs stayed unchanged, holding at 101, the relative reduction in oil rigs gives us some direction on near-term production pacing. It’s not just about fewer rigs turning; it affects future supply. When oil rig counts fall, production might not drop immediately—there’s often a lag—but declines in drilling generally suggest lower output several months down the line unless offset by productivity gains.

In the past, such a pattern has influenced the way we approach energy-linked contracts. A retreat in rig counts, particularly when sustained over several weeks, has tended to support pricing in forward curves for crude, with prompt calendars usually showing tighter spreads. This week’s adjustment won’t turn the market by itself, but put into context with recent EIA inventory draws and OPEC+ outlooks, it suggests tightening in supply multiples—not just from exports, but from within U.S. upstream operations.

Futures And Volatility Observations

There’s also a psychological effect worth recognising. Positioning in short-term options structures, particularly weekly straddles and calendar put spreads, has often skewed when rig data confirms a slower drilling pace. Where production is assumed steady and then revised downward, pricing models that use consecutive rig reports usually start pricing in a higher implied floor.

From an analytical standpoint, this number must now be weighed against refinery throughput rates, which tend to move seasonally and reflect broader demand. This time of year, with peak driving season approaching, even slight changes in supply can cause ripple effects on futures benchmarks.

Smith’s work on shale output recovery earlier in the quarter suggested that any break below 480 rigs in oil could put us dangerously close to year-low levels if not matched by international output expansion. We’re now down to 474. That’s below her implied threshold, meaning we may start seeing rebalancing trades in Q3 structures.

More attention should now be paid to futures time spreads and short-dated volumetric offsets. With gas rigs remaining flat, the gas sector appears more stable, and that helps us identify where volatility is more likely to emerge—in crude-linked instruments. We’re already seeing open interest in call spreads shifting further out the curve, a reliable steam-valve for directional price uncertainty.

It would be wise to revisit delta hedging habits, particularly in exposure that references the August and September delivery periods. If counts fall again next week, or if we see revisions to drilling productivity reports, the risk profile will shift again—this time possibly with more emphasis on backwardation steepening.

We have moved before when small changes added up to broader flow rebalancing. This report might seem minor on the surface. But with net rig totals drifting below recent averages and flat gas activity as a baseline, relative scarcity pricing may begin to show up—especially in the next release of implied volatility readings.

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US crude oil futures settled at $61.02, rising by $1.11 or 1.85% for the day. The trading day’s peak was $61.42, while the low was $59.92.

For the week, the price increased by $3.07 or 4.46%, though it previously reached a low of $55.39. This low was just above the year’s low of $55.15 seen in April and the lowest price since February 2021.

Price Rebound Indicators

The hourly chart indicates the price rebound has reached toward the 38.2% retracement of the range since April’s high of $72.22. This retracement level is at $61.63, and surpassing it may sustain a bullish trend.

On the lower side, the 100 and 200-hour moving averages hover around the $59 mark. The 100-hour moving average is showing an upward trend.

What we’ve seen recently is a firm move upward in crude oil, suggesting a degree of momentum that had been missing in prior weeks. After a rather sharp slide earlier this year, the bounce from $55.39 appears to have breathed short-term life into bullish sentiment. That wick just above the April trough at $55.15 has not only held firm but also triggered an acceleration back toward more contested price zones.

The $61.63 marker, derived from the 38.2% Fibonacci retracement of the April-to-lows range, has emerged as a test point for buyers. This level is often assessed not only for its mathematical function but also for how market participants react when price gets there – and it’s currently acting as a reference for traders attempting to judge the strength of this recovery. If price can manage to stay above that figure convincingly and attract sustained volume, then continued upside may follow. But, it’s not simply about beating the level for a few hours — it’s whether there’s enough follow-through to hold it on a daily closing basis or higher.

Short Term Market Analysis

Meanwhile, just beneath the surface, we find a pair of trend-basing measures — the 100- and 200-hour moving averages — clustering around $59. That area provided a foundation for the midweek rally. The 100-hour average in particular is tilting upward, which hints at short-term momentum gradually turning more constructive. Areas like this often act as magnets or springboards for the price, especially when they overlap with recent reaction lows. If the bounce starts to falter, this is where we’d expect short-term supports to be engaged first.

Shorter-term participants should weigh risk around those moving averages, as any sudden drop beneath them would imply that the energy around the bounce has dissipated. In that case, we’d re-examine the price behaviour closer to $58.50 and $57.10, where prior resistance had once turned support. If nothing’s holding higher up, these would likely draw attention fast.

We find it useful to avoid getting caught up in the bigger narratives and instead narrow in on levels already acknowledged by the broader market. Once price begins to settle back inside those, especially if it does so with weak momentum, the bias often flips.

As volatility compresses and volume pockets shift, short-term positioning requires greater attention to what is happening in each hourly frame. The past few sessions suggest that momentum has picked a side — for now — but we remain alert to how quickly that can change.

The next phase isn’t about predicting the direction, but responding smartly to how price interacts with these clearly marked levels.

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The US Dollar Index (DXY), which measures the US Dollar against other currencies, reversed sharply on Friday after nearing a one-month high of 100.86. The trade disappointment between the US and the UK impacted the Greenback, with market attention shifting to the US-China trade discussions in Switzerland.

US tariffs on UK products remain at 10%, while US-China talks are expected to be tense. US President suggested reducing tariffs on Chinese goods if cooperation improves. Chinese refineries imported 11.7 million barrels per day in April, partly due to low oil prices, while US sanctions on Chinese refineries for buying Iranian oil complicate the situation.

The Us Dollar Index Performance

The US Dollar Index is down over 0.30%, trading around the 100.00 level. Technical indicators show neutral momentum, while short-term support is provided by the 20-day Simple Moving Average (SMA) at 99.64. Longer-term resistance is firm with 100-day and 200-day SMAs still indicating selling pressure.

The Federal Reserve (Fed) is a key factor in the US Dollar’s value, primarily through its monetary policy. Quantitative easing usually weakens the currency, while quantitative tightening supports it. The US Dollar remains the most traded currency, making up over 88% of global foreign exchange turnover.

The earlier section identified a notable shift in the Dollar’s strength last Friday, with the currency pulling back after testing a peak near 100.86. This move was not arbitrary. There was a clear driver in the form of jolted trade expectations between Washington and London, which put downward weight on the Greenback as it hovered around that psychological 100.00 level.

In the days ahead, traders should keep an eye on Switzerland. Talks between Washington and Beijing are due to continue, and markets seem jittery. Tension is expected—not just in rhetoric but in the way policymakers interpret recent moves in commodities and energy. We shouldn’t ignore the substantial volume of oil imported by Chinese refiners during April—over 11 million barrels a day—because that buying was helped along by falling crude prices. Although high activity sounds encouraging at first glance, the layering effect of sanctions, particularly those aimed at Iranian-linked purchases, brings new uncertainty into pricing assumptions. This could very well introduce fresh demand for defensive Dollar positioning, especially if tempers rise during negotiations.

Technical Analysis And Market Sentiment

When we glance at the technicals, there’s more than one reason to be cautious. Although momentum isn’t pushing too hard in either direction—neutral at best—the daily charts show support holding at the 20-day SMA, right around 99.64. That said, longer-term sentiment is still leaning slightly negative, evidenced by both the 100-day and 200-day moving averages pointing lower. What this tells us is simple: the short-term narrative might be uncertain, but broader pressure hasn’t yet lifted.

Our stance becomes more grounded when we consider the role monetary policy continues to play. The US central bank exercises strong influence on the strength of the Dollar. Moving from quantitative easing toward tightening generally props up the currency. For now, we’ve seen restraint from the Fed, and until that changes or becomes more clearly directional, volatility in short-term pricing remains likely.

More importantly for those watching funding costs or hedging exposure, liquidity patterns ahead of next week’s economic releases can trigger rapid changes. Equity correlations are loosening slightly, and that leaves room for dollar-driven strategies to gain without needing large moves in indices.

We have to monitor rate expectations through bond pricing, especially since yield differentials have been edging closer to inflection points. Any tilt—hawkish or dovish—will reroute flow into the relevant duration buckets, and by extension weigh on forward rate agreements.

There’s also merit in not overlooking the FX volume dominance: the US Dollar is involved in nearly nine out of every ten trades globally. So even a modest policy talk change or headline leak can ripple far wider than the original source.

For now, staying nimble with positioning and focusing on the higher-frequency data cycles might serve better than locking in persistent directional views. Carefully watching SMA zones and reassessing exposure as tariff talks unfold should remain at the core of every strategy in the coming sessions.

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Credit Agricole maintains a positive outlook on the USD for the medium term, expecting a recovery in the second half of 2025 and into 2026. This optimism is based on supportive fiscal policies, easing financial conditions, and persistent inflation.

Factors Driving Usd Recovery
The anticipated recovery is driven by a predicted rebound in US growth during late 2025 and 2026. Factors include the extension of personal income tax cuts, reduced trade tensions, and looser financial conditions.

Persistent inflation may limit the Federal Reserve’s capacity to cut rates, which could enhance the USD’s appeal. Credit Agricole expresses skepticism about claims regarding a shift away from the dollar as a reserve currency, viewing these risks as overstated without a credible alternative.

US policy signals regarding the USD also contribute to the positive outlook. Treasury Secretary Bessent has advocated for a strong USD, and there has been a reduction in attacks on Federal Reserve independence, both seen as contributing to stability.

Despite discussions about structural risks, Credit Agricole believes in the fundamental strength of the dollar. The USD’s status as a reserve currency and its yield advantage are seen as intact, bolstering the bank’s positive medium-term stance.

In straightforward terms, the existing content presents a clear and bullish case for the US dollar over the medium term, pointing to robust support from fiscal policy, economic growth prospects, and restrained monetary easing. The reasoning here hinges on an expectation that expansion in economic output—supported by specific legislative and trade developments—will underpin currency strength. Inflation, while usually seen as a drag, is reframed in this context as a stabiliser, because it puts constraints on deep interest rate cuts, thereby maintaining relatively high yields for foreign investors. That high yield—better than many peer economies—can attract capital flows into USD-denominated assets.

Policy Framework and Market Impacts
Now, consider also the remarks from Bessent, who effectively reinforces the idea that policy continuity remains intact, adding a layer of political reassurance to the mix. Stability in monetary institutions, paired with measured backing for the dollar from top finance officials, reduces uncertainty for market participants. The fact that the right to set interest rates remains unchallenged also signals that the usual mechanism for currency valuation stays preserved. What you’re left with is a policy framework that creates few holes for downside surprise.

In the near term, then, many of the factors holding up the dollar are not speculative but already visible—funding support, income tax positioning, and controlled messaging from policymakers who seem eager to avoid unexpected moves.

Looking ahead, we should closely track how sustained inflation shapes not just broad expectations but also actual Fed positioning. If inflation readings refuse to move decisively lower, it likely delays interest rate cuts beyond what was priced in just weeks ago. Rate differentials may then widen further between the US and others, making the dollar relatively more attractive still.

As we consider price dynamics in derivative markets, implied volatility remains low across multiple tenors. That suggests two things: first, underlying expectations about sharp policy shifts remain muted; second, the skew towards upside dollar protection remains profitable at relatively better terms. Strategy-wise, our bias should favour structures that take advantage of a grinding, upward dollar trend, while protecting against short-term retracements.

This is especially relevant if you’re holding any exposure outside the US. Alongside outright positioning, we believe calendar spreads across USD pairs, particularly those sensitive to real yield differentials, bear watching—especially if data begins to align with the growth projections mentioned earlier. There’s already some visibility into these projections becoming reality, so options pricing still favours early positioning before the larger moves materialise.

We should also not ignore the broader reserve debate. While headlines occasionally circle around ideas of a shifting monetary order, recent evidence remains sparse at best. No currency has been furnished with the capital controls, legal transparency, and deep markets that support global demand on the same scale. As such, it’s reasonable to treat alternative reserve narratives as noise for now.

Most discouraging for dollar bears is that, despite waves of discussion around fiscal fragility or long-term imbalances, actual demand for the greenback has remained resilient, especially during geopolitical strain or macro stress. For us, that behaviour points to ingrained positioning that’s not about to unwind suddenly.

In calendar terms, the coming months may show limited surface volatility. But the positioning payoff is likely being built now. In our own assessment, incorporating upside bias structures and maintaining bullish dollar exposure while the curve remains relatively shallow offers both flexibility and carry, with room to adjust if data surprises to the downside. As near-term policy remains on hold, the space for market conviction is opening.

No narratives or theories displace actual capital flow—and that, thus far, continues to support the direction we see ahead.

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White House Press Secretary Karoline Leavitt clarified President Donald Trump’s position on tariffs with China. Trump remains committed to maintaining a 10% baseline tariff and believes the US needs concessions from China.

The tariffs will also apply to the UK, and there are no plans for Trump to unilaterally reduce tariffs, dismissing any suggestion of an 80% concession. Additionally, Trump expressed confidence in US Treasury Secretary Bessent’s role in discussions with China.

The White House Stance

Leavitt addressed misconceptions that Trump might act for personal gain, reinforcing that any tariff decisions will not follow such motivations. The White House intends to allow Congress to resolve issues surrounding the State and Local Tax (SALT) deduction.

The information serves an informational purpose and should not be deemed as financial advice or recommendations. Thorough research is advised before making any investment choices, understanding the inherent risks and responsibilities involved.

This update offers a fairly direct snapshot of tariff-related policy from the Trump administration. We’re told clearly that the 10% tariff on Chinese imports is not going anywhere—for now at least. It’s not a threat, it’s a floor. Firm. Predictable. But that doesn’t mean there isn’t room for pushback from trading partners. Domestic traders should treat it as a fixed cost embedded in the structure of imports, not as a negotiating tactic likely to vanish overnight.

The mention of an 80% concession being off the table sets real boundaries on possible outcomes. There are no open signals here that unilateral de-escalation will occur, and calls for relaxation of tariffs from major trading partners—including the UK—can be expected to meet resistance. As Bessent steps further into the role, there seems to be no appetite from the executive branch to deviate from this posture, at least publicly. Nothing soft is expected from her brief.

Policy And Market Signals

In interpreting the reference to motivations, these weren’t throwaway lines. The White House is keen to control hearsay. The clarification that decisions will not be made out of self-interest closes off any line of speculation that might point in that direction. From a trading desk standpoint, the message here is that policy volatility, at least in the short term, shouldn’t stem from internal political calculations. That simplifies position-holding when monitoring Washington.

Now, on SALT deductions and Congressional control—this offers less insight into the derivative space directly, but signals an important distinction between trade policy and tax policy. We see a deliberate separation of powers. This also tells us that policy drivers won’t all be lumped together. One corridor at a time. One policy category at a time. That should help in identifying which legislative developments to watch and which ones to park, at least temporarily.

For those of us watching order book dynamics and option spreads, the tone from this release suggests minimal policy slippage or change of heart in the very near-term. Expect tariff risk to remain priced in. Expect headline reaction rather than structural shifts.

Careful observation, discipline in hedging, and selectivity in macro-triggered derivatives remain appropriate. There’s not likely to be a reset button hit midway through negotiations with China or the UK. We would also note that while statements like these often aim to dial down speculation, the market’s tendency is to lean forward. Still, there’s no fresh powder here—it’s all within expected bounds, for now.

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The Dow Jones Industrial Average (DJIA) fell below 41,250 as the US and China prepare for preliminary trade talks in Switzerland. A definitive deal is expected to take months, according to Chinese delegates.

US President Donald Trump has suggested reducing Chinese goods tariffs from 145% to 80%. Both levels are similarly restrictive on trade, affecting the US economy’s reliance on cheap goods.

The Federal Reserve Policy

The Federal Reserve maintained interest rates in May, with officials avoiding direct monetary policy discussions. Traders anticipate another rate cut in July, though odds for rate holds are rising, now at 40%.

The Dow Jones is sliding after failing to surpass the 200-day Exponential Moving Average near 41,600. Despite this, it has rebounded over 12.5% from its April low below 37,000.

Assembled from 30 major US stocks, the DJIA is price-weighted. Criticised for limited representation, it differs from indices like the S&P 500.

The Dow Theory assesses market trends by comparing DJIA and DJTA directions. It involves identifying three phases: accumulation, public participation, and distribution.

Trading The DJIA

Trading the DJIA involves ETFs, futures, and options, allowing diverse exposure. Caution is advised due to associated market risks and uncertainties.

The Dow’s retreat beneath the 41,250 threshold comes as both Washington and Beijing prepare for early-stage talks in Switzerland. Though this sounds promising, Chinese officials have already indicated that a concrete accord will take time—possibly stretching into months. That’s not speculation; it reflects the methodical, drawn-out nature of trade frameworks. During these initial meetings, there’s every chance negotiators will focus on groundwork rather than breakthroughs.

Tariffs remain the elephant in the room. The current proposition, discussed publicly by Trump, to reduce tariffs from 145% to 80%, might seem like a generosity on paper. But in practical terms, both figures remain exceptionally punitive. Tariffs at either level limit access to low-cost imports, which in turn squeezes businesses dependent on overseas components. Ultimately, we are staring at a potential bottleneck in consumption, at a time when supply chains are still regaining equilibrium.

Markets dislike mysteries—particularly around interest rates. The Federal Reserve opted for no change in May and chose to sidestep detailed forward guidance. Until last week, a rate cut in July still appeared somewhat expected by the market. But the recent shift in sentiment, pushing the probability of a rate hold up to 40%, is telling. It means we’re seeing renewed confidence—or perhaps uncertainty is receding slightly after months of relentless speculation over inflation data.

We can’t ignore how the Dow failed to sustain momentum above the 200-day Exponential Moving Average. That technical level, nestled around 41,600, has become more than a simple reference point. With prices backing away after testing it, we’re seeing sellers regain traction. Still, the bounce off April’s low just below 37,000 indicates a meaningful recovery—over 12.5% stronger in just a few weeks. It’s volatile, yes, but not directionless.

This index, made of 30 heavyweight American stocks, remains price-weighted. That means companies with higher share prices have more influence over its movement, regardless of their actual scale. It’s one reason why some question its utility compared with broader indices such as the S&P 500. This isn’t a flaw, just something to be wary of when analysing relative strengths.

Dow Theory gives us a longer-term view by comparing the Dow Jones Industrial Average with its counterpart, the Transportation Average. Agreement between both tends to reinforce the trend’s reliability. These trends usually develop in three stages: we see initial smart money inflows (accumulation), then broader buying by the public (participation), and eventually topping out as institutional investors begin to exit (distribution). Based on current moves, it feels like we’re perhaps drifting between stage two and three—but confirmation will come from broader signals, particularly the Transports.

For those operating within derivatives markets, the Dow remains accessible via various instruments such as ETFs, index futures, and options. Flexibility here allows for hedging or outright speculation depending on risk tolerance. However, exposure also heightens vulnerability to whipsaws caused by unexpected political headlines or central bank hints. We’ve emphasised the need to avoid overleveraging into resistance areas, especially when global negotiations add a fog of headline risk. Keep positions responsive, particularly with implied volatility readings indicating uncertainty is far from resolved.

Pay attention to levels that have recently acted as both ceilings and floors. When technicals meet macro stories—such as trade policy and monetary direction—the reaction can overshoot or break down with little warning.

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The White House Press Secretary is conducting a briefing before the US/China meetings. In the session, it was stated that Trump will not independently reduce tariffs on China.

Trump had previously mentioned numbers like 80% and 145%, but these were not concrete figures. A baseline tariff of 10% will continue to be applied to the UK.

Overview Of Us China Trade Meeting

The meeting aims to discuss the trade relations between the US and China. However, firm decisions on tariff reductions are not expected imminently.

What this means in plain terms is that pressure is building into the talks, though not for immediate outcomes. The announcement that tariffs on China will not be withdrawn without broader agreement signals a continued hold on existing trade terms. Key figures like the 80% and 145% mentioned earlier were largely rhetorical. They reflect an approach to negotiation more than actual policy action—numbers used as leverage rather than as announcements carrying legal weight. For now, the existing 10% baseline applied elsewhere remains unchanged.

This matters for us because it injects a layer of predictability, albeit in one direction. Volatility around tariffs—specifically, abrupt shifts or headline-driven retractions—will probably not be part of the picture in the next two to three weeks. That simplifies some of the complexity we usually bake into positions that are sensitive to short-term sentiment. But it does not lower the need to stay adaptive in case sentiment shifts during the negotiation windows.

From what was said by the officials present, including the statements made by the Press Secretary, it’s apparent that delays in altering tariff structures are part of a broader holding pattern. This creates a side-channel of calm, particularly for commodities and manufacturing sectors that are typically first to move when trade recalibrations occur.

Trade Policy Implications

We should also note that while the conversation is focused on China, the inclusion of the UK within the scope of existing tariffs is meaningful. It suggests that policy coherence is being maintained in regions beyond the key bilateral meeting. For shorter-term strategies, especially those tied to cross-border manufacturing inputs and contractual price locking, expect pressure to remain concentrated on import margins.

There’s no suggestion of backchannel reductions or soft rollbacks. So the base scenario calls for maintaining positions that absorb friction from moderate trade slowdown rather than building into narratives of détente. Tools hedged to price in upward movement on the back of softened tariffs may sit idle slightly longer. Adjusting those legs or neutralising spreads where timing is exposed might help reduce whipsaw risk during early sessions immediately following any post-meeting statements.

The general stance from the session also keeps US policymaking away from reactive tariff changes. This adds an anchor to volatility expectations, especially in afternoon sessions that may previously have reacted to surprise tweets or off-cycle updates. With those impulses removed, transaction volume could tilt towards pre-scheduled data instead of unscheduled headlines.

We continue to model implied responses to three-day swing ranges rather than one-session spikes. Pay attention also to turnover levels and open interest in near-dated options tied to freight-sensitive instruments. Flatline expectations may leave these unusually thin, presenting opportunities in positioning against exaggerated moves due to low liquidity rather than news-driven re-pricing.

Careful alignment to news cycles, leaning more on calendar-based catalysts than speculation, seems the way forward for now. We’re using weighted averaging in valuation across a wider band, to avoid skewing too early toward policy changes that are yet to materialise from the meetings. Let short momentum unfold—don’t press until liquidity signals support it.

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The Baker Hughes US oil rig count has decreased from 479 to 474. This provides insight into current oil drilling activities in the United States.

EUR/USD has held above 1.1250 but remains at risk of posting small weekly losses. The pair finds some support as traders exercise caution ahead of upcoming US-China trade talks.

Gbp And Us Trade Talks

GBP/USD has extended its recovery, approaching 1.3300, influenced by shifts in focus towards US-China trade negotiations. This comes amid a period when the BoE has adopted a cautious outlook.

Gold is experiencing gains above $3,300 amid ongoing geopolitical tensions in various regions. The situation has contributed to safe-haven demand for gold, bolstering its current position.

In the coming week, focus will be on the US CPI report to assess tariff impacts. Developments in trade talks with China, alongside economic indicators from the US, UK, and Japan, will be closely monitored.

A new UK-US trade deal aims to lower tariffs and signals flexibility, though wider implications for US tariff policy remain unclear. This may affect perceptions of international trade relations moving forward.

Energy Market Trends

The recent dip in the Baker Hughes US oil rig count from 479 to 474 points to a slight slowdown in American drilling efforts. While this isn’t a drastic falloff, it subtly shifts the supply outlook—especially if the trend persists over the next few weeks. For those watching energy-linked assets or inflation-linked instruments, we could see slight pricing adjustments should oil output expectations soften further. In short, reduced activity here may feed into broader interpretations of energy market momentum with possible knock-on effects in pricing pressure assumptions.

The EUR/USD remaining above 1.1250 reflects ongoing stability, but the pair seems to be lacking strong direction. Traders appear reluctant to take decisive positions ahead of concrete outcomes from US-China discussions. With the common currency showing resilience, it seems there’s still underlying support—possibly anchored in policy divergence. However, weekly performance may still edge lower if US data remains firm. In that case, the dollar would regain some composure, prompting short-term European pullbacks against it.

Meanwhile, sterling has regained some ground, pushing towards 1.3300. This bounce cannot be seen in isolation, as sentiment is spinning off attention to global trade dialogues. While the Bank of England maintains its restrained stance, we see rate expectations in the UK stalling. As such, recent moves in cable likely stem from broader risk appetite and relative dollar softness, rather than any profound UK economic shifts. Should external trade narratives sour, any rebound in GBP might struggle to continue without domestic backing.

Gold trading above $3,300 reflects continued appetite for defensive positioning. Regional tensions—both economic and military—have contributed to heightened interest in stores of value. In these conditions, the metal seems sensitive less to interest rate pathways, more to real-time geopolitical shifts. We’ve noticed that inflows have sustained despite rising yield environments, hinting that the current bid is about preserving value in uncertain times rather than reacting to central bank direction outright.

Looking ahead, all eyes are turning to US inflation data. The CPI will likely provide timely evidence as to whether recent tariff measures are feeding through to the real economy. Should consumer price growth remain sticky or surprise to the upside, yield expectations could reset rapidly. This would have immediate reads onto curve pricing, volatility strategies, and short-duration hedging activity. On the other hand, if inflation shows signs of moderation, we might see rate expectations unwind in key contracts, releasing some pressure across risk assets.

The upcoming updates from trade discussions with Beijing remain a major factor. Existing positioning across several markets seem to reflect a cautiously optimistic stance, which opens some vulnerability to any disappointment in headlines. We also note the movement around bilateral trade deals, particularly those aiming to smooth tariff regimes between Western counterparts. These efforts appear to show adaptability rather than a formal pivot. Still, the broader framework of American trade policy is not yet clearly set. That can inject volatility into global asset benchmarks, should policy direction take a pronounced turn.

Overall, as we manage exposure across currencies, commodities, and rates, the mix of slower US oil activity, delicate FX ranges, firmer gold, and pending data creates an environment ripe for recalibrating hedges and rethinking positioning tactically rather than chasing momentum.

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AUDUSD is encountering resistance near key moving averages after recovering from support levels. Traders are monitoring for a breakout above these resistance levels to enhance bullish momentum.

This week, AUDUSD surpassed a significant swing area and a consolidation range limit, reaching 0.65135. The movement included an advance above the 200-day moving average at 0.64587, indicating strong buying interest.

Fed Rate Decision Impact

However, momentum weakened post-Fed rate decision, with the pair dropping below the 200-day MA. A rise met resistance at the same level on Thursday as sellers prevented further gains.

During today’s Asian session, buyers intervened at a rising trendline support. This lifted AUDUSD above the 100-bar moving average on the 4-hour chart, yet gains were restrained near the 200-hour MA at 0.64291.

Going forward, AUDUSD faces resistance near:

– 200-hour MA: 0.64291
– 100-hour MA: 0.64459
– 200-day MA: 0.64588
– Swing area: 0.6429–0.6442

Despite recent declines, the pair remains near its yearly highs. Staying above the trendline and 4-hour 100-bar MA is positive, but buyers need to consistently rise above the 200-day MA to fully regain control and sustain bullish confidence.

Current Market Sentiment

What we’ve seen up to now is a test of strength from both sides. AUDUSD, after leaning heavily on support around past consolidation limits, attempted a breakout. It managed to claw its way through a previously stubborn range and even poked above the 200-day moving average — a level often eyed in technical setups to gauge trend direction. This suggested, temporarily at least, that buying interest was gaining momentum. Buyers managed to push the pair to a new short-term high at 0.65135, marking a strong push from earlier lows.

However, after the Federal Reserve’s rate decision, the upward push lost its grip. Price action dipped again below the key 200-day moving average, suggesting a sense of uncertainty among market participants. That zone, around 0.64587, has now shifted from being a gateway to bullish continuation to a ceiling that sellers are actively defending. We saw this in clear terms when an attempt to rebound on Thursday was quickly met with resistance at that level, halting progress as offers entered the market.

Most recently, in the Asian session, demand re-emerged near an upward-sloping trendline. Technicians looking at shorter-term charts may note that this trendline has helped stabilise price swings in the past few weeks. That bounce lifted the price once more through the 100-bar moving average on the four-hour chart. Yet, gains met difficulty as the pair approached the 200-hour moving average at 0.64291 — another technical barrier where supply once again outweighed demand.

Now, what does this mean for us looking ahead? For one, there are multiple technical layers crowding the space between 0.64291 and 0.64588. The 200-hour, 100-hour, and 200-day moving averages, along with horizontal levels from past swing zones, now form a tight belt of resistance. So while bullish hopes aren’t off the table, they remain constrained beneath this cluster.

It matters little that the pair dropped off recent highs; what stands out is that AUDUSD hasn’t backed off too far. Price still trades not far beneath yearly peaks, which keeps a medium-term bullish tone alive — barely. Buyers will need to step in with more persistence and drive price clearly above the 200-day moving average on a sustained basis.

Otherwise, each failed test at these levels becomes stronger footing for sellers. If we were watching momentum flows, repeated inability to close above such moving averages reflects fading buyer commitment. For the time being, maintaining support near the rising trendline and keeping the four-hour 100-bar moving average intact provides a decent technical base. But unless we see that base convert into upward follow-through, the risk of reversion remains.

In trading the derivative side, the focus now turns to volatility around these nearby levels. With price boxed between compressing ranges and key trend points, reaction speed will matter. Even a modest shift in tone from market-moving data or shifts in relative rates could pull the pair firmly in either direction. Buying dips only works as long as floors at the trendline continue to hold — any signs that these are weakening may open the way for sharper declines.

For now, any bullish strategies need to show they’re not just hoping but backed by resilience and price closing consistently above moving averages, not just touching them briefly before retreating. Without that, recovery attempts may remain shallow.

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The EUR/GBP pair has experienced a decline, hovering around the 0.8500 mark as trading progresses. Short-term market signals demonstrate downward pressure, while long-term moving averages suggest a more supportive environment despite present challenges.

Technically, indicators show a bearish signal with the RSI being neutral at 45, implying balanced momentum without firm directional movement. The MACD signals a sell, reinforcing the downward trend, although the Stochastic RSI Fast maintains neutrality. The Average Directional Index shows the bearish trend lacks notable strength.

Short Term Moving Averages

The short-term moving averages exacerbate the downward pressure, with the 10-day Exponential and Simple Moving Averages above and sloping down from the current price. The 20-day Simple Moving Average also trends downward, limiting recovery. In contrast, the 100-day and 200-day Simple Moving Averages are below current levels, offering broader support.

Support levels are seen at 0.8470, 0.8461, and 0.8430, while resistance is positioned at 0.8483 and 0.8497. Breaking the support level may increase the sell-off, whereas surpassing the resistance could challenge the bearish scenario.

In plain terms, this analysis highlights that EUR/GBP has been pulling back, trading close to 0.8500 but struggling to gain any meaningful traction. When we zoom into shorter periods, pressure is firmly to the downside. However, if we step back and take a wider view using long-term averages, the broader picture isn’t quite so one-sided. Those longer indicators suggest there’s still some ground beneath the pair limiting the risk of an extended fall—at least for now.

Digging into the tools that traders often lean on, the Relative Strength Index, also known as RSI, sits around 45. That’s right in the middle, which means there’s no particular momentum either way. The trend-following MACD, however, is on a sell signal. That backs the short-term move lower. The Stochastic RSI, which is sensitive to recent shifts in price, isn’t giving much either—neutral. And then we’ve got the ADX, a measure of trend strength, which tells us that even though the market is leaning bearish, it’s doing so without much force behind it.

Price And Support Levels

Now focusing on the moving averages, which often guide shorter-term sentiment—both the 10-day EMA and SMA are declining above where we are now. That paints a picture of downward momentum playing out in real time. The 20-day SMA following suit adds to that view. These shorter averages reinforce the near-term weakness because they’re acting like a ceiling. Price struggles to rise past them because they confirm sellers are currently more active.

Where things get more balanced is on the longer-term side. The 100-day and 200-day SMAs are still underneath the current price level. This signals that while recent action may be directed lower, the structure over several months still leans supportive. We can interpret this as a buffer—for now at least. It also hints that this pullback hasn’t broken larger trends yet.

As for price markers—there’s a support area around 0.8470 with more structure down near 0.8461 and then 0.8430. These levels could slow or even halt the decline if reached. On the upper side, resistance comes in at 0.8483 and then just under the round number at 0.8497. Climbing above either would be the pair’s first real test to reverse the selling pressure. A failure to break through would likely confirm continuation to the downside.

From our perspective, while recent signals lean negative, the softness in trend strength and the lack of firm directional momentum from RSI and Stochastic RSI imply that any sharp position shifts might be premature. Short-term trades are prone to quick reversals here, especially with support lurking nearby. More patience may be warranted, particularly around how the next move interacts with those technical boundaries shaping the pair right now.

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