Errante’s The Week Ahead: 23^rd – 27^th June 2025

Highlights of the Week

• Geopolitical Risks Escalate: Markets on edge as the US weighs military action against Iran, increasing volatility across global assets.
• Key Inflation Data: Canada’s CPI (Tuesday), Australia’s CPI (Wednesday), and US Core PCE (Friday) will provide crucial insights into central bank policy outlooks.
• Major Central Bank Speeches: Testimonies from Fed Chair Powell and BoE’s Governor Bailey could influence USD and GBP volatility amid policy uncertainty.

What Now?

The Iran-Israel conflict remains the central driver for market risk, particularly in oil and safe haven flows. Brent crude surged above $73, and further escalation could drive a new leg higher. The risk premium in the dollar, yen, and gold remains elevated, and traders should be wary of headline-driven swings. President Trump is expected to decide on US involvement in Israeli strikes within the next two weeks, a scenario that could spark another bout of risk aversion. US equity futures fell more than 1% last week as investors rotated defensively into safe havens—pushing gold higher and supporting the yen.

On the rates front, Japan’s Ministry of Finance is preparing to reduce super-long bond issuance, a move designed to support the JGB market as global yields remain volatile. The Bank of Japan’s stance is still relatively dovish, in contrast to the tightening bias in the West, helping to cap yen losses despite global risk-off swings.

Meanwhile, money markets are recalibrating for slower inflation in North America, with Canada’s CPI and US Core PCE both expected to reinforce the “peak rates” narrative. However, labor data and central bank testimony will be key swing factors, especially as the Federal Reserve remains non-committal about the pace and timing of policy normalization.

Eurozone PMIs kick off the week and will be closely watched for evidence of recessionary headwinds or any sign of stabilization. Softer data could accelerate ECB rate cut bets, potentially adding downside pressure to the euro.

Market Events and Announcements

(GMT +3)

Monday, 23^rd June

• 10:15 – EUR: French Flash Manufacturing/Services PMI
• 10:30 – EUR: German Flash Manufacturing/Services PMI
• 11:30 – GBP: Flash Manufacturing/Services PMI
• 16:45 – USD: Flash Manufacturing/Services PMI

Tuesday, 24^th June

• 15:30 – CAD: CPI m/m, Median/Trimmed CPI y/y
• 17:00 – GBP: BoE Gov Bailey Speaks
• 17:00 – USD: Fed Chair Powell Testifies

Wednesday, 25^th June

• 04:30 – AUD: CPI y/y
• 17:00 – USD: Fed Chair Powell Testifies

Thursday, 26^th June

• 14:00 – GBP: BoE Gov Bailey Speaks
• 15:30 – USD: Final GDP q/q, Unemployment Claims

Friday, 27^th June

• 15:30 – CAD: GDP m/m
• 15:30 – USD: Core PCE Price Index m/m

Market Insights: Key Charts to Watch

Gold (XAU/USD) – Daily Chart

Sideways Within Bullish Channel, Watching $3,434 Resistance

Gold continues to consolidate within its well-defined bullish channel, currently trading near $3,364. After repeated rejections at $3,434–$3,440, the metal finds intermediate support at the mid-channel zone around $3,300.

RSI is neutral at 53, showing consolidation, while MACD and Stochastics both indicate waning bearish momentum.

Forecast:

As long as the $3,293–$3,245 support band holds, risk skews sideways to higher, with a potential retest of $3,434 and then $3,500. A close above $3,434 would likely spark a rally toward the upper channel and Fibonacci extensions at $3,543.

Downside risk:

Below $3,293 opens $3,245 and then $3,100.

Key Levels:

• Resistance: $3,434, $3,500
• Support: $3,364, $3,293, $3,245

Narrative:

Geopolitical risk and US inflation data (Core PCE Friday) will be the primary catalysts for directional moves.

USD/JPY – Daily Chart:

Tests Downtrend Resistance as Safe-Haven Flows Mix with BoJ Dovishness

USD/JPY has rebounded to challenge the channel top at 145.75. Price is currently capped by the upper boundary of the long-term downtrend channel.

RSI at 56 and Stochastics in overbought territory, but MACD remains positive, suggesting further upside is possible if risk aversion fades.

Forecast:

Sustained closes above 145.75 open the path to 146.56 (Fib) and then 148.13, with momentum favoring continued gains unless geopolitics spark renewed yen demand.

Downside risk:

A move below 144.44 would indicate a return to the lower channel and possibly 142.79.

Key Levels:

• Resistance: 146.56, 147.13, 148.13
• Support: 144.44, 142.79

Narrative:

USD/JPY direction will be dictated by Fed testimony, US Core PCE, and Middle East developments.

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