Circle Internet Group’s shares have skyrocketed from $31 to $180, representing a stunning 477% increase since its public listing. Recently, the stock jumped 20% in just one Wednesday. This surge follows the U.S. Senate’s passage of the GENIUS Act, which creates regulations for stablecoins that are pegged to the U.S. dollar. Circle, the company behind USD Coin (USDC), stands out in this emerging market.

Circle Payments Network

Circle also runs the Circle Payments Network, which makes moving digital assets easier. Once implemented, this new law is predicted to boost the U.S. economy. The GENIUS Act, supported by U.S. Sen. Kirsten Gillibrand, aims to promote financial innovation while ensuring the U.S. dollar remains dominant. The bill is awaiting approval in the U.S. House, where changes may occur. Similar proposals, like the Clarity Act and the Stable Act, are also being discussed. A regulatory framework for stablecoins is expected to take shape soon. Circle and Coinbase could both benefit from these developments. However, investors from the recent IPO should watch out for potential stock price fluctuations. Staying updated on upcoming earnings reports is crucial.

Legislative Impact

Circle Internet Group’s share price has significantly increased from its IPO price of $31 to the current $180, a rise of over four times in a short period. This increase coincides with important legislation regarding stablecoin regulation. The key event was the Senate’s approval of the GENIUS Act. This bill aims to clarify the rules for U.S. dollar-backed stablecoins, which are digital currencies linked directly to the U.S. dollar. For Circle, as the issuer of USD Coin (USDC), this is a positive development. The Circle Payments Network is designed to make it easier to move digital assets, which will help integrate digital currencies more widely into traditional finance and new fintech. Now, keen attention is needed on the GENIUS Act as it moves through the House of Representatives. Legislative processes can take time and may face changes, which could affect the benefits of the law. It might be premature to assume that the current bill’s favorable conditions will remain intact until fully approved. Gillibrand’s backing reflects widespread bipartisan support, though cooperation between government branches can often be challenging. Meanwhile, the Clarity Act and the Stable Act could either compete with or blend into the GENIUS Act. Depending on how these bills evolve, the coverage for digital currency could be either strengthened or weakened. For those trading derivatives, this situation presents both opportunity and risk. Rapid increases in stock price often lead to greater interest in call options, especially those with shorter expiration dates, causing heightened volatility. News linked to government actions can affect prices significantly, so vigilance is critical. Delays or changes in legislation may lead to quick market downturns. Traders focused on volatility might want to consider calendar spreads before key legislative dates, such as committee hearings or votes. A longer strategy might include using straddles, which can profit from substantial price movements in either direction, especially after a 477% rise. Circle’s partnerships with other platforms like Coinbase widen its operational reach, but they also mean that news about one company might impact the other’s price and volatility. This connection could grow as reforms become law. Earnings reports are more important now than ever. They not only reveal revenue and cost expectations but also provide insights into how management views the changing legal landscape. Key insights are often found in management commentary and Q&A sessions. Additionally, monitoring interest rates and the strength of the dollar can help assess the demand for stablecoins compared to traditional money. It’s essential to keep a close eye on spreads—both for credit and options. As always, be cautious with leverage when underlying assets have seen massive price increases, especially when future price movements depend on ongoing legislative negotiations. Create your live VT Markets account and start trading now.

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EUR/CAD is holding steady above 1.5750, with resistance possibly at 1.5845, a high not seen in nine weeks. The Relative Strength Index (RSI) crossing above 50 shows a positive trend, while immediate support is close to the nine-day Exponential Moving Average (EMA) at 1.5717. The currency pair has increased for five straight days and is currently trading near 1.5780 in Asian markets. The daily chart suggests upward momentum within a rising channel, surpassing the 50-day EMA. Short-term gains are supported by the 14-day RSI remaining above 50. The pair may aim for 1.5845, and a break above that could lead to the channel’s upper limit at 1.5920. If prices drop below the support level at 1.5717, the next target could be 1.5650. A break below this support might push the pair down to the 11-week low of 1.5483. The Euro is also gaining strength against the Swiss Franc, with percentage changes among major currencies reflecting this. Against the US Dollar, it’s down by -0.23%, yet it gains 0.25% against the New Zealand Dollar. Currency movements vary, with the base currency selected from the left column and the quote from the top row, indicating specific percentage changes. Currently, the euro is firmly positioned against the Canadian dollar, especially over the last week. The price’s stay above 1.5750 and five days of continuous gains signal strong momentum rather than a mere reaction. Technically, remaining above the important 50-day EMA suggests that traders are embracing a trend rather than fleeing from volatility. The climb of the RSI above the midpoint of 50 indicates growing buying pressure, but it has not yet reached overbought levels. This is significant, as long as the RSI stays strong without hitting extremes, there is potential for further upside. The next challenge is near 1.5845, and if it overcomes that, 1.5920 would be the target at the channel’s peak. Support levels are also important to watch amid this positivity. The 1.5717 mark, aligning with the nine-day EMA, shouldn’t be ignored. If prices drop below this level—which is a possibility—it could lead to selling down to 1.5650. Monitoring price behavior around that level is crucial, as a break below could extend losses towards 1.5483, a level not seen in over two months. This trend isn’t limited to just one pair. The euro shows strength more broadly. For example, it is rising against the Swiss franc. When a base currency strengthens against safe-haven currencies, it often indicates improved sentiment or shifting capital. Meanwhile, it faces only slight pressure from the US dollar. These comparisons help assess general trends and market sentiment. For those tracking the larger market, percentage changes across various pairs—especially displayed in a matrix—reveal areas of strength or weakness. It’s evident that not all movements are equal. The more erratic shifts against the New Zealand dollar suggest speculative flows or uncertainty. Nevertheless, these data points provide valuable insights. In the near term, we will keep monitoring strength while being attentive to any pullbacks through 1.5717. The divergence between short-term and longer-term EMAs indicates that prices are moving away from their baseline. As always, we seek confirmation rather than reacting impulsively.

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Eurostoxx futures are up by 0.9% in early European trading, hinting at a possible recovery for European stocks after three days of losses. However, this increase is cautious due to ongoing developments in the Middle East. In the US, S&P 500 futures have slipped by 0.1% as the market prepares to reopen. German DAX futures have also gained 0.9%, while UK FTSE futures are up by 0.5%. This current situation suggests a tentative change in market sentiment for European equity futures, following a brief pullback earlier this week. The 0.9% rise in Eurostoxx futures, alongside the same gain in the DAX and a smaller rise in the FTSE, shows that buying interest is back, but it is measured. Market activity seems to be influenced not just by momentum but also by a re-evaluation of recent pressures, especially those outside Europe. The 0.1% drop in S&P 500 futures might seem small, but it highlights the fragile sentiment in the US, particularly with lower trading volumes due to the holiday. Traders haven’t fully reacted to the recent geopolitical changes, especially in the Middle East, leading to careful risk-taking. Fortunately, tensions have not escalated further, which likely helped stabilize European markets. For now, short-term strategies must consider external factors. If buying continues beyond the European open, resistance levels in sector indices might be tested again, but implied volatility remains at a level indicating cautious optimism. Volume metrics, especially in the options market, still show a conservative approach. Looking forward, we should monitor the DAX and Eurostoxx futures as they approach their early April highs. A significant move past these levels could lead to a reassessment of hedges across different maturities. Additionally, as US markets reopen, there may be a quick return to focusing on economic data and Federal Reserve comments, especially given the quieter liquidity calendars in the coming sessions. Recent movements should not be seen as a reversal unless there is broader participation in cash equities. We are watching to see if this initial futures jump is supported by activity in banks, industrials, and consumer discretionary stocks when markets open. Any lag in these sectors will be evident in breadth statistics and could limit upside potential. In terms of risk management, it’s important to note that current option skews in key European indices are flat compared to recent averages, suggesting this recovery is more technical than thematic. Strategies focused solely on volatility decay might need adjustments, especially near weekly expiry windows, where gamma spikes can surprise traders during the day. Now, our focus will be on how dealers hedge in response to strength. If futures continue to rise into midweek, it might prompt covering of short-dated call positions established during last week’s downturn, leading to localized increases in volume and price, particularly near key round numbers. Lastly, we have not seen strong reallocation flows into European equities on a global scale. Fund-level data expected later this week may provide better insights into sustained interest. Until then, anticipate trading to be reactive rather than committed, with daily movements indicating a technical retracement rather than a broad shift in appetite.

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Gold prices are experiencing renewed selling pressure and are currently just below $3,350. The strong stance of the US Federal Reserve is boosting the US Dollar, which in turn affects the demand for gold. Positive trends in European equity markets are also impacting gold prices. However, ongoing geopolitical tensions in the Middle East and trade uncertainties could help limit losses for the XAU/USD pair, which is expected to decline this week.

Fed Interest Rate Projections

The Fed decided to keep interest rates steady due to concerns about tariffs affecting consumer prices. Future projections include two rate cuts by 2025, and one cut each in 2026 and 2027, with inflation risks remaining a concern. The overall risk sentiment is shaky because of geopolitical tensions and trade uncertainties. Tariffs in the pharmaceutical sector could affect the markets and potentially support gold as a safe-haven investment. Geopolitical issues, especially tensions between Iran and Israel, are heightening regional conflict risks. The recent decline of the US Dollar may lend some support to gold, highlighting the possibility for dip-buying. From a technical perspective, gold prices are impacted by moving averages and critical support levels, leaving room for potential decline. Resistance levels around $3,374-$3,375 and $3,400 could pose obstacles to any recovery. Currently, gold is experiencing a new wave of downward momentum, now trading just below $3,350 per ounce. The main factor behind this drop is the Federal Reserve’s assertive tone, which has stabilized the US Dollar. When the Dollar rises, especially with firm monetary policy in place, gold typically falls, as the cost of holding non-yielding assets increases.

European Market Sentiment

In contrast, European stock markets are showing a more positive outlook. This “risk-on” sentiment usually leads investors to move funds away from safe havens, as seen in this week’s equity trends. While this may appear negative for gold, there are deeper issues worth paying attention to. The geopolitical landscape remains tense, especially with ongoing issues in the Middle East involving Iran and Israel. The risk of escalation is still present, and while markets haven’t fully accounted for this, any new developments could quickly shift sentiment. Additionally, uncertainties about trade, particularly tariffs on the pharmaceutical sector, add unpredictability. These risks are not just headlines; they directly affect inflation expectations and may influence investors’ hedging strategies. Chair Powell’s team opted to leave policies unchanged, but their economic projections hint at future developments. They expect a couple of rate cuts by 2025, followed by one cut each in 2026 and 2027. Inflation continues to be a concern, even as growth slows, which impacts not only gold but all interest-sensitive assets. A key point is that the Dollar, after reaching recent highs, has started to ease. This shift is significant for those monitoring market correlations. A weaker Dollar usually reduces pressure on metal prices, encouraging dip buyers to return. However, these buyers are often selective, stepping in near established technical zones. On the charts, gold is trading below its 50-day moving average, a common gauge for medium-term trends. The outlook for further weakness remains unless gold breaks through resistance at around $3,374 and then again around $3,400. Currently, we’re in a range that might prompt profit-taking among short sellers or gradual buying from those looking for a long-term hedge against inflation. We’re also keeping an eye on support around $3,325. If this level is breached, it could lead to more significant pullbacks. However, without new catalysts, any declines might be slow. Be alert for sudden spikes in geopolitical news, as these often trigger algorithmic buying in gold, especially when paired with a weaker Dollar. For those trading derivatives related to this market, the short-term setup favors tactical trading within ranges rather than chasing trends. Timing is especially important right now, given the delicate balance between policy expectations and real-world risk events. Create your live VT Markets account and start trading now.

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China and the EU recently held talks about trade issues, including electric vehicles. The meeting featured China’s commerce minister, Wang Wentao, and EU trade commissioner, Maroš Šefčovič, in a video conference. The main goal of this conversation was to strengthen the economic and trade relationship between the two regions. However, no specific solutions or detailed plans to address the issues were shared.

Managing Tensions

In simple terms, both Wang and Šefčovič are trying to keep lines of communication open while handling tensions around electric vehicles. Conducting the meeting over video call suggests a formal approach, easing the pressure of an in-person summit. Both sides aim for a collaborative tone but haven’t outlined any concrete steps forward. This suggests they are balancing complex issues behind the scenes. From our perspective, this looks like initial positioning rather than decisive progress. The EU’s concerns have prompted China to keep diplomatic discussions ongoing, even if they aren’t ready to compromise. The lack of firm agreements indicates that both sides want to prevent escalation, at least for now, especially given the current commercial uncertainties. For those monitoring pricing trends and sensitive policies, it’s important not to expect immediate changes. Regulatory issues may become more significant, especially in areas seen as critical, like automotives with battery supply chains. While major impacts might take time to surface, it’s essential to watch for technical regulatory decisions—like tariffs, standards, or national subsidies—that may not attract much media attention but can quickly influence valuations.

Strategic Sectors

In previous trade discussions, moments of stalemate have often led to sudden changes in rules or government action. Therefore, it may be wise to proceed cautiously with investments tied to import-export channels between Asia and Europe. We might see caution reflected in structured products that relate to regional manufacturing even before any public announcements. We don’t see the lack of detailed statements as a sign of inactivity; rather, it suggests a strategic choice to retain flexibility. For us, this leads to more uncertainty. Option strategies that consider this uncertainty, especially those designed for unexpected movements, may prove beneficial. Given the emphasis on long-term trade stability, and without a clear plan, we might start to notice early signals through customs data or changes in foreign direct investment. Tracking these more detailed inputs will be more useful than getting caught up in public statements. Unlike in previous years, there is now a shorter gap between policy changes and market reactions, especially regarding sectors deemed “strategic.” This means we should build exposure before clarity emerges, not after. Keep models focused on policy volatility, even if broader market indices seem stable. It’s not uncommon for disconnects between political dialogues and market behaviors to mislead retail investors. Create your live VT Markets account and start trading now.

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The EUR/JPY climbed close to 167.50 in early European trading on Friday. The Japanese Yen faced pressure due to uncertainty around when the Bank of Japan will next raise interest rates. Ongoing trade talks between Japan and the US remain unresolved, affecting the Yen’s value.

Bank of Japan’s Focus

The Bank of Japan is concerned about potential risks to Japan’s economy, particularly due to US tariffs. BoJ Governor Kazuo Ueda has indicated no immediate plans for rate hikes, which impacts the Yen. Meanwhile, a hawkish tone from the European Central Bank is supporting the Euro. Japan’s National CPI rose by 3.5% year-on-year in May, slightly down from 3.6% previously. The National CPI, excluding fresh food, was 3.7% YoY for May, up from 3.5%. The CPI excluding food and energy climbed to 3.3% YoY from 3.0%, exceeding market expectations and possibly benefiting the Yen. The Japanese Yen’s value is closely tied to the country’s economic conditions, the BoJ’s policies, yield differences between US and Japanese bonds, and overall market sentiment. The Yen is seen as a safe-haven currency, attracting investors during uncertain times. Given these recent developments, we anticipate ongoing volatility in the EUR/JPY pair moving forward. This is especially true as rate expectations become more distinct between the European Central Bank and the Bank of Japan. With Ueda showing patience on tightening policy, the significant interest rate gap is unlikely to close soon, which may weigh on the Yen. Conversely, the ECB’s strong stance supports the Euro, pushing the cross upward.

Macro Backdrop and Rate Differentials

Looking at the macro backdrop, Japan’s inflation figures provide a mixed view. Although the headline CPI dropped slightly, the core numbers—excluding food and energy—showed an increase. This discrepancy may pose challenges for the BoJ, making its cautious stance seem misaligned with economic data. However, comments from officials suggest that significant policy changes are not imminent. This could create an imbalance: positive surprises in Japanese data may have little impact, as the monetary authorities are slow to react, whereas dovish statements from Europe could lead to significant downward movements in the pair. The yield gap remains an important factor here. The difference in interest rates between the US and Japan, along with the BoJ’s slow actions, continues to put pressure on the Yen. Additionally, trade tensions with the US add vulnerability to Japan’s economic position and impact investor confidence. If there is any resolution or clarity on these trade discussions, it could provide a temporary boost. We observe that during times of global risk aversion, the Yen tends to rebound. As a safe-haven asset, it attracts investment during uncertainties, though these flows have become more selective and short-lived recently. Until Tokyo policymakers signal a readiness to act, any upward movement is likely to be constrained. In these situations, it’s crucial to monitor not just the main economic figures but also the tone and timing of any monetary policy responses. If Ueda continues to focus on downside risks while European officials maintain a more aggressive stance, the market’s direction could become increasingly one-sided. Pay close attention to the importance of interest rate differentials and developments in fixed income markets now. In the coming weeks, unexpected macro events could overshadow regular technical influences. For those tracking volatility or rate expectations, any significant departure from established policy paths could act as a catalyst. This is especially relevant in the quieter summer months, where market movements can become exaggerated due to lower participation. Therefore, we focus on both the timing and content of statements and how the market reacts. From a positioning perspective, holding extended longs in the currency pair carries the risk of sharp pullbacks, particularly if market sentiment changes or unexpected shocks occur. We view this as a potential trap for those entering late or chasing breakouts. The current market environment favors clear risk management and adaptability, rather than a buy-and-hold approach. Create your live VT Markets account and start trading now.

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FX option expiries for June 20 at 10 a.m. New York time focus on EUR/USD. Key levels to watch are 1.1500 and 1.1520, as today the dollar is weaker. These expiries could affect price movements, especially since important hourly moving averages are close by at 1.1504-16. There are headline risks linked to the Middle East that traders are keeping an eye on before the weekend. The levels mentioned, particularly around 1.1500 to 1.1520, can pull prices as the expiry approaches. With the dollar showing weakness today, prices might drift toward these levels if intraday volatility stays low. We see such levels, along with 1-hour moving averages near 1.1504 and 1.1516, as short-term magnets for price action. The mention of geopolitical risks, especially in the Middle East, suggests there could be sudden changes in market sentiment. This is especially significant on Thursdays and Fridays when traders reassess their positions before the weekend. High premiums in short-dated options often reflect these concerns. Historically, we’ve seen volatility increase ahead of uncertain geopolitical situations, even when spot prices remain stable. Traders can position around these expiry levels not just by taking direct bets, but by looking for imbalances in risk pricing. For example, they may sell options when implied volatility is high and there’s little real movement, or buy volatility (gamma) if the New York session breaks important technical levels early. The current trend of dollar weakness may encourage bullish strategies, but any long positions must confront the option barriers above. Counteracting price movements as expiry approaches has been effective when large volumes exist around realized volatility. In past cases where expiry levels coincided with technical congestion, prices often move slowly with less momentum, resulting in a decrease in implied volatility. Patience is crucial during these times; traders should avoid forcing trades based on assumptions of sudden price changes unless significant macroeconomic events suggest otherwise. In conclusion, we prepare for expiry sessions by analyzing not just the strike prices but also the time decay and how close prices are to their realized distribution. When macro news coincides with large expiries—and major levels are nearby—there’s often a situation that traders like us closely monitor.

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Gold prices in Saudi Arabia fell on Friday. The price per gram dropped to 404.90 Saudi Riyals from 407.02 SAR the day before. The price per tola decreased to SAR 4,722.66, down from SAR 4,747.40. Gold prices in the region are based on international rates and updated according to current market conditions. Local prices may vary slightly, as they serve as a reference.

Importance of Gold

Gold is seen as a safe investment during uncertain times. It acts as a protection against inflation and currency devaluation since it isn’t tied to any specific issuer. Central banks, the biggest gold buyers, purchased 1,136 tonnes in 2022. Banks in emerging markets like China, India, and Turkey are rapidly increasing their gold reserves. Gold prices typically move in the opposite direction of the US Dollar and US Treasuries. Prices often rise when the stock market falls or during geopolitical tensions, as investors turn to it for safety. Gold prices are also affected by interest rates; they tend to rise when rates are low and fall when rates are high. The recent drop in gold prices to 404.90 SAR per gram reflects shifts in investor expectations as economic data influences risk-sensitive assets. While the decline from 407.02 SAR is minor, it mirrors global trends, showing gold’s sensitivity to interest rates and exchange rates, especially the US Dollar’s strength. Gold has multiple roles: it stores value, protects against inflation, and acts as a safeguard when currencies weaken. Unlike stocks or bonds, which rely on companies or governments, gold exists independently, explaining why it’s being accumulated by central banks. Last year, central bank demand was among the highest in recent years, with over a thousand tonnes added to national reserves. This demand was primarily driven by Asian and Middle Eastern institutions that historically had more diversified reserves.

Market Trends and Reactions

Treasury yields have increased due to recent US economic data, putting downward pressure on metal prices. Since gold doesn’t pay interest, rising yields make holding it less attractive, even with persistent inflation concerns. The strength of the USD, bolstered by hawkish central bank statements, also reduces demand for non-yielding assets priced in dollars. However, historically, gold tends to stabilize when expectations of tighter policies peak. Rapid changes in sentiment, such as shifts regarding rate decisions or unexpected inflation data, often result in volatile trading in derivatives. This recent change in Riyadh’s local rate may reflect a natural adjustment rather than heavy selling, as it aligns with offshore futures trends and exchange rate movements. Gold exchange markets often react hours ahead of local changes, making futures contracts crucial for precise price navigation. Traders may need to reconsider their positions, especially during mid-week events tied to policy changes or inflation data releases. If yields continue to rise without similar inflation fears, gold might stabilize or drop further. Demand from official sectors has provided some support. However, derivatives markets aren’t based solely on fundamentals. The volatility in short-dated contracts has been more reactive than speculative, suggesting that many are hedging rather than taking bets. These small daily price changes may appear insignificant, but they contribute to broader trends. Monitoring open interest levels, shifts in implied volatility, and relationships with other assets—especially credit spreads and oil—can enhance position adjustments. Currently, there’s no sign of panic in the precious metals market. Yet, if market-based expectations shift suddenly, it may be necessary to adjust leveraged futures positions. Setting tight stops can help avoid unnecessary losses during data-heavy weeks. Create your live VT Markets account and start trading now.

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New Zealand Prime Minister Christopher Luxon will meet Chinese President Xi Jinping in Beijing on Friday. Their talks will focus on improving trade and dealing with geopolitical tensions from China’s growing influence in the South Pacific. This meeting concludes Luxon’s first visit to China since he took office in November 2023. In Shanghai, he promoted New Zealand as a prime destination for Chinese tourists and students and oversaw the signing of agreements worth NZ$871 million (about $520 million).

China-New Zealand Trade Relations

China is New Zealand’s largest trading partner, making up 20% of its exports, which totaled NZ$21.5 billion in the fiscal year ending in March. Despite larger strategic issues, New Zealand is keen on strengthening its economic ties with China. Recent developments indicate a solid commitment to economic cooperation, even with ongoing political concerns. Luxon’s aim has been to present New Zealand as not just a friendly partner but as a reliable and flexible trade hub, especially in education, tourism, and primary exports. This vision is strengthened by efforts to attract Chinese investment and consumer interest, with the Shanghai visit already bringing in nearly three-quarters of a billion New Zealand dollars in deals. Beijing has responded with what seems to be practical goodwill. While both sides are aware of shifts in the region and security issues in the Pacific, the focus has mainly been on transactional benefits and consistent access. China’s economic influence remains strong. Trade ministries are prioritizing long-term predictability and mutual benefits over just volume or tariff ease.

Trade Continuity and Strategy

Looking ahead, the importance of trade, price stability, and clarity in agreements will outweigh public statements or diplomatic rhetoric in the next eight to twelve weeks. When we consider forward contracts and market risks, we see increasing confidence in trade continuity, with energy and agricultural contracts likely facing minimal disruption. For those involved in derivatives trading, this stability eases concerns about commodity-related risks amid changing political dynamics. Luxon’s focus on commercial relations during this visit suggests a more predictable environment for hedging strategies related to dairy exports, seafood, and feedstock imports. These signals provide reassurance for those linked to freight rates and soft commodity seasonal trends. If you’re examining volatility in contracts tied to the Pacific region, now is the time to reassess short-term contracts for any excessive geopolitical risks. In the realm of China-New Zealand trade, the current conditions are more stable than many may expect. Pay attention to contracts heavily reliant on Pacific trade flows, especially those expiring in mid-Q3. The tone from both leaders indicates a low desire for disruptions. If you’ve set short positions expecting sharp price movements, especially in dairy futures or tourism-related contracts, consider revisiting those strategies. Ultimately, the significance of numbers can’t be ignored. Twenty percent of New Zealand’s exports depend on reliable access to the Chinese market. This statistic influences not only exchange rates and hedging strategies but also credit flows and pricing consistency. As the discussions wrap up on Friday and details emerge, the specifics of trade commitments will be what we should focus on and react to. Create your live VT Markets account and start trading now.

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The price of West Texas Intermediate (WTI) oil is around $73.70 now due to easing tensions between the US and Iran. The White House’s comments about possible negotiations with Iran have temporarily slowed the rise in oil prices. An Ascending Triangle pattern on the hourly chart shows less market uncertainty. If the oil price breaks above June 19’s high of $75.54, it might rise to $77 and even $80.

Possibility of Downtrend

If the price drops below $71.20, it could slide to $67.85. The US Dollar Index has corrected to about 98.60 from the week’s peak, lowering demand for safe-haven assets like the US Dollar. WTI oil is known as “light” and “sweet” due to its quality. It mainly comes from the United States and serves as a benchmark for oil markets. Oil prices are affected by supply and demand, geopolitical events, and the value of the US Dollar. OPEC’s production choices also play a role. Weekly data from the American Petroleum Institute and the Energy Information Agency influences WTI prices. This data highlights supply and demand changes, affecting price fluctuations.

Impact of Recent Developments

The recent rise in WTI prices, now near $73.70, is largely thanks to a calming of US rhetoric towards Iran. As diplomatic tones improve, speculative buying has slowed, stopping a more rapid price increase. This pause, though modest, shows how sensitive the market is to expectations and confirmations. The Ascending Triangle pattern indicates improved confidence among market players. It reflects a phase of price consolidation that could lead to a breakout upward if momentum continues. We’ve noticed higher lows being formed, narrowing prices against horizontal resistance. A clear breakout above $75.54, the June 19 high, would open the door to $77 and possibly $80, provided trading volume supports this move. This level serves as a filter — above it, sellers shouldn’t outnumber buyers. However, if prices fall below $71.20, our view would shift to a defensive stance, focusing on $67.85, where previous demand has appeared. Changes in currency values are important to track too. The US Dollar Index has dropped to about 98.60 after rising earlier this week. This pullback alleviates pressure on commodities priced in dollars, making oil slightly more appealing for international buyers. Still, any downward movement in the dollar won’t alter the overall trend unless it extends significantly. Supply remains stable but is not static. Weekly updates from the Energy Information Agency and the American Petroleum Institute give us insights into current reality, reflecting or opposing broader market sentiment. Significant increases or decreases in crude inventories reveal changes in consumption and production, making these reports predictive in nature. OPEC remains a key influence, even when they’re not actively publicizing decisions. Their actions or anticipated inactions shape future pricing. The market usually reacts quickly to any changes in production, especially when inventories are tight, like in parts of the US Gulf Coast. Currently, the technical outlook leans towards an upward trend, but sustaining momentum depends on effectively overcoming short-term resistance. Trading volume, market breadth, and upcoming macroeconomic signals — including adjustments in risk sentiment and inflation estimates — will determine if bullish traders maintain control. Additionally, let’s keep an eye on spreads. A continued flattening or backwardation in futures could signal expectations of tighter supply, which would support directional trading. Create your live VT Markets account and start trading now.

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