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30.06.2025 10:04 AM
Markets End the First Summer Month on a Positive Note (with a Likely Continuation of #USDX Decline and EUR/USD Growth)

The ceasefire between Iran and Israel is providing significant support for the growth in demand for risk assets, and expectations of negotiations between contact groups starting this week are further reinforcing this positive sentiment.

The topic of military conflict has faded into the background, allowing investors to breathe a sigh of relief. But there is another reason for the optimistic mood — the decision by the Trump administration to reduce the extensive mutual customs tariffs. It appears that the 47th president is beginning to realize that his chosen strategy of "gangster-style pressure" on trade partners is not particularly effective and is backfiring, damaging the national economy. Another positive development was the statement by Commerce Secretary H. Lutnick that Washington and Beijing have concluded discussions on their trade structure. Against this backdrop, market attention is now shifting to the Senate, where Trump's "big beautiful bill" — proposing substantial spending increases and tax relief — is being debated.

Riding the wave of these events, stock markets have continued the rally that began in May, and at least in the U.S., local stock indexes are once again reaching new historic highs.

The overall positive backdrop described above is supporting demand for cryptocurrencies, which are cautiously ticking upward in price. Oil prices have stalled in anticipation of the negotiation process between Iran and Israel, consolidating into a tight range, ready either to surge or continue declining. The outcome will depend entirely on the result of the talks.

Gold prices, after a noticeable drop on Monday's trading, are rebounding as well — again driven by expectations surrounding the negotiations. Like oil, gold may rise in the event of a negative outcome or continue to fall if the scenario turns out positive.

The U.S. dollar remains among the underperformers, with the ICE Dollar Index trading just above the 97.00 mark — a level, if breached, that could accelerate the bearish trend.

Key Focus This Week

This week, markets will be focused on the release of consumer inflation data in the eurozone, manufacturing sector activity figures, and the JOLTS job openings report in the U.S. Particular attention will be paid to U.S. labor market reports from ADP (Wednesday) and the Department of Labor (Thursday). Data on average wages and average workweek duration in the U.S. will also be of interest.

What Can Be Expected on the Markets Today?

A positive sentiment is likely to dominate, supporting both stock and cryptocurrency markets. The dollar may continue to fall if it dips below the 97.00 level. Gold's recovery will likely remain limited due to the uncertainty surrounding the outcome of talks between Tehran and Tel Aviv. The U.S. financial markets will have a shortened week due to the Independence Day holiday, which will likely impact the activity of market participants.

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Forecast of the Day:

#USDX

The U.S. dollar index is likely to continue declining due to the overall weakness of the American currency. A drop below the 97.00 level may intensify the downward trend, potentially bringing the index down to 96.00. A suitable selling level could be around 96.92.

EUR/USD

The pair is trading higher amid dollar weakness and the militarization of Europe, which implies massive budget spending on defense—supporting demand for the euro. Against this backdrop, the pair may continue rising toward 1.1885 after breaking above the 1.1750 resistance level. A potential entry level for buying could be 1.1758.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
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