As the North American session gets underway, the U.S. dollar is modestly higher, gaining less than 0.10% against the euro and British pound and about 0.20% versus the Japanese yen.
While the dollar remains well below the levels seen following yesterday’s stronger-than-expected PPI report helped by the decline following Pres. Trump’s announcement that a deal was done, today’s price action has been more back-and-forth than directional, and not seen a resumption of the US selling. That indecision has pulled the major currency pairs back into technically neutral territory.
The lack of sustained breakout momentum has returned prices to the cluster of key technical levels that have helped define the trading ranges and directional bias for much of the past month. Buyers and sellers continue to battle around those areas, but neither side has yet been able to seize lasting control.
Much like the market’s hope for progress toward a peace agreement in the Middle East, traders are still waiting for the U.S. dollar to make a decisive move out of its recent ranges. Until that happens, the major pairs remain trapped between competing technical forces.
In this video, I break down the technical outlook for the three major currency pairs, highlighting the key levels that are defining the bias, identifying the important risk points, and outlining the targets traders are watching next.
In review, Trump declared that a “great settlement” and been reached with Iran to end the three-month war, saying he expects a formal deal to be signed in the coming days (Trump’s birthday is on June 14). He also reassured Israel that any agreement will include the removal of Iran’s enriched nuclear material. The framework being discussed is a Memorandum of Understanding — not a full peace treaty — that would serve as the foundation for longer-term negotiations.
Having said that, even as the deal was being announced, US forces reportedly shot down two Iranian attack drones near the Strait of Hormuz early Friday after Iranian forces reportedly fired on a transiting vessel — a reminder of how volatile the situation remains even during active diplomacy.
As is always been the case, a successful deal requires freedom of navigation through the Strait of Hormuz, the future of Iran’s nuclear and ballistic missile program, reconstruction costs, and sanctions relief. Iran has insisted it retains the right to enrich uranium, while the US is demanding full removal of enriched material.
The deal is close but not done. Markets today will be watching closely Friday for any formal signing announcement — a confirmed MOU would likely send oil sharply lower and trigger a significant risk-on rally across equities.
In other news, SpaceX is set to make history with what is expected to be the largest IPO ever. The company is reportedly pricing shares at $135, raising roughly $75 billion, and targeting a valuation near $1.77 trillion. The stock is expected to trade on the Nasdaq under the ticker SPCX. Investor demand has been exceptionally strong, with the offering reportedly oversubscribed and significant participation from both institutional and retail investors.
For markets, the IPO could become a major liquidity event and a key test of investor appetite for high-growth, high-valuation companies. Index providers have already signaled that SpaceX could be added quickly to several major benchmarks, potentially creating significant passive fund demand shortly after the listing.
US stocks are higher with the NASDAQ currently up about 90 points, the S&P up around 30 points, and the Dow industrial average Of 282 point
Crude oil is down -3.05% or $2.67 at $85.04
This article was written by Greg Michalowski at investinglive.com.
