As we head into Monday, June 16, 2025, global markets are positioned for a session that could see heightened volatility. Escalating Middle East tensions (recent Israel–Iran strikes) have sent oil prices up ~10% and gold to fresh highs, spurring safe‑haven demand. The USD has shown signs of fatigue amid this risk‑off tone, while the euro briefly hit multi‑year highs last week. In Asia, attention turns to Japan’s central bank meeting (BoJ likely to hold policy) and later in the week the U.S. Fed meeting (no change expected at 4.5%). Overall, markets face a cocktail of geopolitical angst and looming Fed/BOJ/BoE decisions, keeping currency swings well‑supported and traders on edge.
EUR/USD: Price Pauses at 1.1550 Resistance
The EUR/USD pair remains in a tight range after rallying to a three‑year high. On the 5‑min chart, the euro spiked near 1.1620 last week before reversing sharply. Key resistance sits around 1.1575–1.1620 (the last swing high) and support is roughly 1.1500 (psychological round‑number). Technical indicators reflect this consolidation: MACD appears to be flattening from recent highs, and Stochastic is sliding down from overbought levels. RSI is near neutral (around 50), suggesting neither side has clear momentum right now. Price action shows failed breakouts – bulls lost steam near 1.1620 and bears have yet to seriously breach 1.1500 – indicating an indecisive market after last week’s big moves. The euro’s recent strength (it was the week’s top performer) may limit a USD rally even as risk sentiment wavers.
Trading Strategy
Neutral/balanced. Two scenarios arise:
- Bullish scenario: If EUR/USD holds above 1.1500, bulls may re‑enter on dips. A long entry around 1.1510–1.1520, targeting the 1.1575–1.1600 zone, could work, with a stop-loss below ~1.1480. This aims for the next resistance at ~1.1580–1.1600.
- Bearish scenario: Conversely, a decisive break below 1.1500 opens room toward ~1.1440. A short entry on a clear break of 1.1500 (or on rallies into 1.1550), targeting ~1.1440–1.1450, can be considered, with a stop above ~1.1540. Such a move would target the prior low from mid‑June.
Key levels: Resistance ~1.1575 (major peak), 1.1620 (channel top); Support ~1.1500 (round number), 1.1475 (recent low).
GBP/USD: Pound Finds Near‑Term Ceiling
GBP/USD also looks rangebound after testing higher ground. The cable climbed to about 1.3630 last week but has since pulled back to the mid‑1.35s. Technically, yesterday’s chart shows a resistance cluster near 1.3600–1.3630 that held the advance. Support resides near 1.3520 (recent swing low). Momentum indicators show waning bullish strength: MACD is flattening, RSI is dipping below 50, and Stochastic is returning from overbought, hinting that the 1.3630 rally may have run its course. On the upside, fresh highs would be needed to reignite buys, but on the downside, oversold readings might limit downside. Note also that the Bank of England is expected to hold rates later this week, and markets are pricing possible rate cuts ahead, which is a mild headwind for the pound.
Trading Strategy
Neutral. Consider trading the range or fading extremes:
- Bullish reversal: A bounce play around 1.3530–1.3540 could work if buyers step in. For example, a long entry near 1.3530 targeting 1.3600–1.3630, with a stop under ~1.3500, aims for the upper channel resistance.
- Bearish continuation: If 1.3520 support breaks, look for further weakness. A short below 1.3510, with a target near 1.3450 (next support) and a stop above ~1.3580, would play to continued yen/dollar strength in risk‑off conditions and pressure on sterling.
Key levels: Resistance ~1.3600–1.3630; Support ~1.3520, then ~1.3480.
USD/JPY: Double‑Top Forming at 144.70s
The USD/JPY pair shows a classic double‑top near 144.70 and weakness since. Technically, JPY strength has emerged after repeated failures by USD/JPY to close above 144.70. Support lies near 143.75–143.80 (recent low). Momentum has turned cooler: RSI has rolled down from overbought and now hovers in mid-range, while the MACD histograms have faded. Stochastic is not far from neutral after the last rally. The BoJ’s likely decision to keep policy steady (0.5% rate) offers little new, but hawkish guidance could keep the yen bid. Given geopolitical jitters, the yen’s safe‑haven status may pressure USD/JPY further.
Trading Strategy
Neutral-to-bearish. Look for a break of the double‑top pattern:
- Bearish play: A short entry around current levels (144.30) or on a rally toward 144.70 could target a slide to ~143.00–143.30, with an initial stop above 144.80. If 143.80 support cracks, the next major floor is ~143.20.
- Bullish counter: Only a clear breakout above 144.75 (double‑top) would negate the bearish view. In that case, a long above 144.75 targeting ~145.30, with a stop near 144.35, would be considered – but the bias today favors a yen recovery.
Key levels: Resistance ~144.70 (double top), 145.00; Support ~143.75, then 143.20.
Market Outlook
In sum, Monday’s session is likely to be choppy as markets digest the overnight developments in the Middle East and await the week’s policy meetings. Traders will keep a close watch on energy prices (oil’s 10% jump) and any spillover from safe‑haven flows into yen or gold. Key risks include any escalation in Iran–Israel conflict (boosting oil/yen) and surprises in central bank guidance (especially from BoJ or Fed). Given the narrow trading ranges in FX over the past day, breakouts around the levels above will be telling. Overall, expect cautious trading with tight stops: while fundamentals (Fed on hold, central bank divergence) suggest a gentle trend, the geopolitical risk premium means sudden spikes or reversals are possible. Steady US data and positive risk sentiment could see the USD/SJPY test its highs, whereas a risk sell‑off might weaken risk‑sensitive EUR and GBP, allowing USD to find footing.