| The dollar gained ground against safe-haven currencies as Middle East tensions showed signs of easing, while Fed rate cut signals provided mixed market direction. Here's where key markets stand. USD: Three-Week High Against YenThe dollar rose to a three-week high against the yen and gained on the Swiss franc Friday amid signs Middle East tension is easing after Iran backed continued discussions with Europe on its conflict with Israel. The dollar index is poised to rise 0.6% this week despite remaining flat on Friday. Iran's Foreign Minister Abbas Araqchi said Tehran backed further talks with Germany, France, Britain and the EU following Geneva discussions. However, Iran stated it would not discuss its nuclear program while under Israeli attack. Fed Governor Chris Waller's comments suggesting rate cuts could come as soon as July based on recent inflation data provided some dollar headwinds. "The market's already expecting two rate cuts. That was just confirmed by the Fed this week," notes Joseph Trevisani at FX Street. Despite recent gains, the dollar remains down about 9% this year due to ongoing trade war concerns as Trump's early July tariff deadline looms. EUR: Bullish Momentum BuildingThe euro rose 0.3% to $1.1534 Friday, maintaining bullish momentum toward week's end. Traders expect more momentum with less reliance on Fed policy direction. Next week could see the market opening toward 1.14600 before a potential rally occurs. The euro benefited from falling oil prices (Brent crude dropped over 2% to around $77), which supports net oil-importing economies like the eurozone. GBP: Holding Key SupportSterling held its level above 1.3400 with traders expecting a bounce from this support level, targeting 1.3600 once more. The pound traded flat at $1.3471 on Friday but was set for a weekly loss as uncertainty over the Israel-Iran conflict fueled safe-haven demand. Weak UK retail sales data showing the sharpest drop since December 2023 and the Bank of England's hold at 4.25% had little effect on the pound. The BoE's 6-3 vote split for a cut can be interpreted as marginally dovish, reinforcing market conviction for an August rate cut. "The pound was only lightly touched by a consensus Bank of England hold yesterday," notes ING FX Strategist Francesco Pesole. GBPJPY: Testing 196.50 ResistanceThe pound-yen traded above the 196 mark, with buyers targeting 200. However, short-term resistance remains around 196.50 – a break above this level would trigger bullish momentum toward the psychological 200 level. The yen fell 0.29% to 145.88 per dollar despite its traditional safe-haven appeal, as easing Middle East tensions reduced demand for the Japanese currency. The dollar's three-week high against the yen reflects the complex dynamics of safe-haven flows during geopolitical events. GOLD: Retracement Despite TensionsGold made a short retracement to end the week, with traders expecting geopolitical tensions to have little lasting impact on the commodity. Traders are now targeting 3200 in the coming days, suggesting a more bearish outlook for the precious metal. BITCOIN: Struggling at $110KBitcoin remains in a maze as it refuses to trade above the $110,000 mark. The possibility exists that the market could pause at $102,000 before another short-term rally, reflecting ongoing uncertainty in crypto markets. Week Ahead: Watching Diplomatic ProgressThe coming week will focus on whether diplomatic talks between Iran and European nations gain traction, potentially further easing Middle East tensions. President Trump's decision on U.S. involvement in the conflict, expected within two weeks, remains a key risk factor. With the Fed signaling potential July rate cuts while maintaining inflation concerns, dollar direction may depend more on geopolitical developments than monetary policy in the near term. Hey! Got plans Monday? Clear a spot because we’re going live with a special guest you seriously don’t want to miss. This isn’t your average webinar—we’re diving into strategies, insights, and real value you can actually use. ✨ Seats are limited, so SAVE YOUR SPOT NOW before it’s gone. Regards,
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