Equity Analysis:

Australia ASX 200 Index

Market Overview:

The S&P/ASX 200 rose 21 points, or 0.2%, on Wednesday to close at 8,808, snapping a four-session losing streak. Sentiment improved after headline inflation for May came in relatively benign, although the core reading was slightly firmer. Across Asia, markets broadly advanced as U.S. equity-index futures edged higher amid easing tensions in the Middle East and a gradual normalization of tanker traffic through the Strait of Hormuz. Later this week, investors will focus on the U.S. Personal Consumption Expenditures (PCE) Price Index and final GDP data. Gains in the local market were broad-based across technology services, healthcare, consumer, and business sectors, while energy and mining stocks underperformed. Three of the four major banks rose between 0.1% and 1.2%, while WiseTech Global rebounded 14.5% after its previous decline.

Technical Analysis:

On Wednesday, the ASX 200 printed a small bullish candle and ended four consecutive sessions of losses, showing relative resilience despite broad weakness across Japanese, Korean, Hong Kong, and A-share markets. Market breadth remained uneven: the advance-decline ratio was 1.2:1, with 84 stocks rising and 103 falling, showing clear stock-level divergence. The index was mainly supported by resource and financial heavyweights. At present, the ASX 200 has formed a small-bodied recovery candle with a long lower shadow, suggesting solid buying interest after a test of the 100-day moving average. This is a stabilizing repair candle after a decline, but there is no high-volume breakout signal; it should be treated as a rebound and repair rather than a trend reversal. The RSI (14) reads 51.6, within a neutral range and neither overbought nor oversold. After falling toward 47 over the previous four sessions, it has recovered slightly, showing fading bearish momentum, but bullish follow-through remains insufficient and there is no clear one-way trend signal. The MACD stands at 38.5, with the red histogram continuing to narrow and the fast and slow lines moving closer together. On the daily chart, bullish momentum continues to weaken, with no clear golden cross or death cross; a range-bound structure remains evident.

China Shanghai Composite Index

Market Overview:

On Wednesday, the Shanghai Composite rose 0.11% to close at 4,111, while the Shenzhen Component gained 1.24% to 16,051. Both benchmarks rebounded from the previous session as investors returned to technology stocks after a broad global sell-off. Investors were also looking ahead to quarterly results from U.S. memory-chip maker Micron Technology. Several AI-related and semiconductor stocks led the recovery, including Cambricon Technologies (2.83%), Hygon Information Technology (6.34%), SMIC (6.94%), Naura Technology (3.02%), and Shengyi Technology (1.55%). On the trade front, China has effectively halted exports of certain tungsten products to Japan this year, while shipments of rare-earth magnets in May fell to their lowest level since May 2025, when Beijing first introduced its global export-control regime. Diplomatic tensions between China and Japan have persisted following Japanese Prime Minister Sanae Takaichi’s comments on Taiwan last November, and the restrictions remain in place.

Technical Analysis:

The Shanghai Composite closed Wednesday at 4,110.81, up 0.11%, with Shanghai-market turnover of RMB 1.514193 trillion, roughly RMB 80 billion lower than Tuesday. The intraday range was 4,075.49-4,117.28, and the index closed as a small bullish candle with a long lower shadow. After Tuesday’s heavy-volume sell-off and large bearish candle, Wednesday opened lower, tested the downside, and then stabilized in a choppy recovery. The long lower shadow near 4,075 showed strong buying support and a clear exhaustion of bearish momentum. However, the close at 4,110.81 failed to reclaim the 5-day moving average at 4,111.96, indicating that short-term bulls remain weak. This is a low-volume stabilization and repair move after a decline, not a reversal rally. The index has now entered a 4,070-4,150 consolidation box, with 4,175 acting as a dense overhead supply zone from the latest stage high. The 4,100 level has shifted from previous support into a short-term bull-bear pivot; without volume, upside attempts are likely to meet resistance and pull back. Near-term outlook: the Shanghai Composite is likely to continue oscillating within 4,070-4,150 with limited repair momentum. Only sustained expansion in turnover across both markets and a firm hold above 4,112 would open the way for a fresh rebound. If support at 4,067 breaks, the correction could extend toward the 4,030 area.

Currency Analysis:

U.S. Dollar Index

The U.S. Dollar Index hovered around 101.50 on Wednesday, trading at its highest level in more than a year, as expectations for further Fed rate hikes this year remained strong and a sell-off in Wall Street technology stocks boosted demand for safe-haven currencies. At the latest policy meeting, Fed officials left rates unchanged but signaled growing support for further tightening, while newly appointed Fed Chair Kevin Warsh reiterated his commitment to restoring price stability. Markets now price the probability of a September rate hike at about 70%, up sharply from 29.1% a week earlier. Investors are also watching this week’s Personal Consumption Expenditures (PCE) inflation report, the Fed’s preferred inflation gauge, for further clues on the monetary-policy outlook. Meanwhile, progress in U.S.-Iran peace talks has increased traffic through the Strait of Hormuz, easing tensions in global energy markets and helping reduce inflation pressure.

The latest round of dollar strength is not being driven by a single factor. A decisive hawkish shift in Fed policy, stronger-than-expected resilience in the U.S. labor market, recurring disruption from U.S.-Iran geopolitical tensions, and safe-haven flows into the dollar and U.S. Treasuries amid a pullback in global equities have all reinforced the current strong-dollar backdrop. The market has also produced a special divergence in which the dollar rises while U.S. Treasury yields fall. The bullish structure in the Dollar Index remains intact, and the index is likely to continue testing the 102.00 level. Key constraints on further dollar upside remain: first, renewed easing in U.S.-Iran tensions; second, a recovery in global risk appetite. Technically, the Dollar Index has broken out of a large long-term consolidation box and neutralized the double-top risk, with upside targets at 101.80 and then 102.14. Downside levels to watch are 101.00, the psychological round number, and 100.76, this week’s low.

Today, consider shorting the U.S. Dollar Index at 101.70. Stop loss: 101.80. Targets: 101.20 and 101.10.

AUD/USD

The Australian dollar held broadly near 0.6900, close to an eleven-week low, as a mixed inflation report had little impact on expectations for further rate hikes. The May Consumer Price Index fell 0.7% month over month, bringing annual inflation down from 4.2% to 4.0% and marking the slowest pace in three months. However, trimmed-mean inflation rose 0.4% for the month, above expectations, lifting annual core inflation to 3.6%. After raising rates three times this year, the Reserve Bank of Australia kept the cash rate unchanged this month but reiterated that it would not hesitate to tighten further if inflation remained above the 2.5% target. The mixed inflation data left markets divided, with the probability of another rate hike estimated at about 50%; any move is more likely later in the year than at the August meeting. Meanwhile, the Australian dollar fell 1.2% in the previous session as a technology-led sell-off in global equities triggered risk aversion.

On the daily chart, short-term bearish forces currently dominate. AUD/USD trades near 0.6900 and maintains a near-term bearish bias, as spot prices remain below the 100-day and 20-day simple moving averages at 0.7083 and 0.7058, respectively. The pair is still holding above the 200-day SMA at 0.6856, which provides trend support, but this has not prevented momentum from deteriorating. The 14-day Relative Strength Index (RSI) has slipped toward the oversold area near 28, suggesting that the downtrend is strengthening. On the upside, initial resistance sits at the 5-day moving average and horizontal resistance around 0.6970, followed by the psychological 0.7000 level and then a more distant resistance cluster near the 20-day simple moving average at 0.7058. Immediate downside support is seen at the 200-day simple moving average near 0.6856. A clear break below this level would expose the next bearish target at the 0.6800 handle.

Today, consider going long AUD at 0.6890. Stop loss: 0.6880. Targets: 0.6950 and 0.6960.

GBP/USD

GBP/USD lost traction during early European trading on Wednesday, falling to around 1.3170. After Keir Starmer resigned as Prime Minister, political instability in the United Kingdom weighed on sterling. Traders are preparing for the U.S. May Personal Consumption Expenditures (PCE) Price Index, due later on Thursday. Markets will focus on Burnham’s fiscal-policy stance and whether he will loosen the current fiscal rules. Any relaxation of fiscal rules could trigger a negative response from the UK bond market and pressure the pound. In addition, weaker-than-expected UK Purchasing Managers’ Index (PMI) data added to sterling’s downside pressure. UK private-sector activity contracted for a second consecutive month in June. The preliminary Composite PMI fell from 49.7 in May to 49.4, a 14-month low and below the 50 expansion-contraction threshold, indicating broad weakness among goods producers. Meanwhile, the Manufacturing PMI declined from 53.9 to a three-month low of 53.1 in June.

From the current market structure, UK political risk, the Fed’s hawkish stance, and broad U.S. dollar strength remain the core drivers of GBP/USD. In the short term, without fresh positive catalysts, sterling may continue to face downside pressure. Technically, GBP/USD has broken below its previous daily consolidation range, and the downtrend is gradually taking shape. Price remains below the major moving-average system, showing an overall bearish market bias. The MACD is running below the zero line, with the green histogram continuing to expand, indicating that bears remain in control. Key upside resistance is located around 1.3300, the psychological round number, and 1.3292, the 9-day moving average. If price cannot reclaim 1.3300, rebound potential is likely to remain limited. Further resistance is near 1.3356, the 20-day moving average. Downside support is at the 1.3150 level, which also marks the April low and the bottom of this year’s trading range. A daily close below this level would confirm the breakdown and open the path toward 1.3100.

Today, consider going long GBP at 1.3155. Stop loss: 1.3143. Targets: 1.3210 and 1.3220.

USD/JPY

The yen traded around 161.80 per U.S. dollar on Wednesday, still near its weakest level since 1986, as repeated verbal intervention from officials provided little support for the currency. Earlier this week, Finance Minister Satsuki Katayama said she had held talks with U.S. Treasury Secretary Scott Bessent and reaffirmed a shared commitment to coordinating foreign-exchange markets when necessary. The yen remains under pressure from U.S. dollar strength and the wide interest-rate differential between the United States and Japan. Markets are skeptical about whether Tokyo is willing to intervene again after conducting record-scale intervention nearly two months ago, which significantly reduced foreign-exchange reserves. Meanwhile, the summary of opinions from the Bank of Japan’s June meeting showed that policymakers broadly supported continued rate hikes, citing progress in underlying inflation toward the 2% target and still-accommodative financial conditions.

From a technical perspective, last week’s sustained breakout above the previous intervention zone around 160.50-160.60, combined with a recent strong rebound from the 200-day exponential moving average (EMA), favors bullish traders. At the same time, the 14-day Relative Strength Index (RSI) is near 70.50, entering overbought territory, while the Moving Average Convergence Divergence (MACD) remains positive above the zero line. This suggests firm but potentially overstretched upside momentum, so it would be prudent to wait for some consolidation before adding further exposure. Near-term support is located around the structural pivot area of 160.00-160.50. As long as USD/JPY remains above this zone, any pullback is likely to be viewed as a correction within the existing bullish structure. That said, if a sharper rally develops, the 162.00 round number is the first resistance level. A decisive break and hold above that area could open the way toward 163.50 and 165.00.

Today, consider shorting USD at 161.95. Stop loss: 162.10. Targets: 161.20 and 161.00.

EUR/USD

EUR/USD fell for a third consecutive day, and for the fifth time in the past six sessions, dropping to a more-than-one-year low during Asian trading on Wednesday. Spot prices are currently trading near 1.1360, down almost 0.15% intraday, and appear exposed to further downside amid U.S. dollar strength. Traders have increased bets that the Federal Reserve will raise rates before year-end to combat stubborn inflation. In addition, mixed headlines around Tehran’s nuclear program have kept a geopolitical risk premium in place, pushing the Dollar Index, which tracks the greenback against a basket of currencies, to a 13-month high. This has overshadowed the European Central Bank’s hawkish stance and become the key factor pressuring EUR/USD. Following Lagarde’s remarks, markets reduced expectations for further ECB tightening, although investors still expect at least one 25-basis-point rate hike this year. Meanwhile, weak economic data have added to a cautious outlook. Preliminary PMI data showed that Germany’s private-sector activity contracted at the fastest pace since 2024, while the eurozone also remained in contraction territory.

From a technical perspective, repeated failures on the 4-hour chart to hold above the 20-period simple moving average at 1.1425, together with the break below the 1.1400 psychological level, favor bearish traders. Momentum indicators also remain weak. The 14-period RSI is hovering near the oversold area around 20, while the MACD histogram remains negative, indicating continued downside pressure. That said, the deeply oversold RSI and negative but stabilizing MACD suggest that sellers may soon show signs of fatigue. Therefore, it would be prudent to wait for short-term consolidation or a modest rebound before positioning for further downside. Any rebound attempt is likely to face strong resistance at the 20-period simple moving average of 1.1425 and the 1.1500 round number. EUR/USD would need to reclaim that level to ease current downside pressure and shift the short-term bias back toward bulls. On the downside, watch 1.1312, the May 30, 2025 low, and 1.1300, the psychological round-number level.

Today, consider going long EUR at 1.1350. Stop loss: 1.1340. Targets: 1.1400 and 1.1410.

Commodity Analysis:

WTI Spot Crude Oil

On Wednesday, crude oil fell below USD 70 per barrel to its lowest level since late February, as increased tanker traffic through the Strait of Hormuz and progress in U.S.-Iran peace talks eased supply concerns. With safety assurances from the International Maritime Organization, shipowners have become more confident in passing through the key waterway, as shown by active satellite signals. The International Energy Agency estimated that UAE oil exports were close to 85% of pre-war levels, with roughly 60 million barrels recently sold from the Persian Gulf. As a result, oil prices have fallen by about 40% from their wartime peak. The recovery in global flows overshadowed U.S. Energy Information Administration data showing that U.S. crude inventories had fallen to their lowest level since 1984, while inventories at Cushing dropped below operational minimum levels.

From a global-market perspective, the pullback in oil prices helps ease imported inflation pressure across major economies. On the daily chart, WTI crude has continued to trade within a descending channel, with prices already falling below key support areas near USD 70.00, the psychological level, and USD 72.00, the round number. The moving-average system remains in bearish alignment, and the medium-term trend is still weak. Notably, oil is currently contesting the USD 70.00 psychological level, which is often treated as an important reference point for judging the medium- to long-term trend. If price decisively breaks below the USD 70.00 support area, it may extend lower toward USD 68 or even USD 65. On the upside, resistance is seen in the USD 72.19-72.00 zone. Only a recovery above the 200-day moving average near USD 72.99 would ease current downside pressure.

Today, consider going long crude oil at 69.60. Stop loss: 69.45. Targets: 71.00 and 72.00.

Spot Gold

Gold fell below USD 4,000 per ounce on Wednesday and slid toward a seven-month low, as expectations for Fed policy tightening outweighed support from the temporary U.S.-Iran peace agreement, which helped ease inflation concerns. At the latest policy meeting, Fed officials left interest rates unchanged but indicated growing support for future rate hikes, while newly appointed Fed Chair Kevin Warsh reiterated his commitment to restoring price stability. Meanwhile, progress in talks between Washington and Tehran encouraged increased traffic through the Strait of Hormuz, reducing pressure on global energy supply and lowering inflation risk. Gold also faced additional selling pressure from the sharp decline in U.S. technology stocks, as investors cut gold positions to offset losses elsewhere in their portfolios.

From a more detailed technical perspective, gold continues to trade below the 9-day moving average at USD 4,206 and remains firmly capped by key moving-average resistance, leaving the downtrend intact. Gold is gradually approaching key support near USD 3,960, the June 24 low, and USD 4,000, the psychological level. A breakdown would point toward USD 3,960, the June 24 low, and then the USD 3,900 handle. The daily 14-day RSI remains around 31 and has not yet entered an extreme oversold reversal zone, suggesting that downside selling pressure has not been fully released and that there is no clear bottoming signal yet. At the same time, the MACD continues to generate bearish signals. Multiple technical indicators therefore confirm that short-term selling pressure may persist. For a counter-trend breakout, the first key daily resistance is the 5-day moving average near USD 4,147, which is also the first major barrier for any short-term bullish rebound. If an oversold rebound develops, further resistance is seen around the USD 4,200 level.

Today, consider going long gold at 3,995. Stop loss: 3,990. Targets: 4,060 and 4,070.