Equity markets are entering the week with cautious optimism as a mix of diplomatic breakthroughs, trade progress, and geopolitical de-escalation breathes new life into risk sentiment. After enduring months of heightened volatility and headline fatigue, the latest developments—ranging from new trade deals to ceasefire agreements—are offering markets a rare window of relative calm.

The most prominent catalyst came from President Trump, who sought to boost market confidence by encouraging Americans to “buy now,” citing a major economic boom ahead. His statements were supported by progress on the U.S.-UK trade agreement and renewed discussions with China, painting a picture of an economy ready for new expansion. According to the White House, the UK deal alone could generate $6 billion in tariff revenues and $5 billion in new exports—figures intended to support the ongoing market rally.

The UK trade agreement is already in effect, providing tariff exemptions on key goods such as aluminum and steel. Meanwhile, discussions with China are ongoing. Last week’s talks in Switzerland, referred to by Trump as a potential “total reset,” aimed to de-escalate tariffs and improve access for U.S. companies to Chinese markets. Although no formal agreement has been signed yet, the markets are trading with optimism that progress is near.

Geopolitical shifts are also contributing to this supportive backdrop. A ceasefire between India and Pakistan, while fragile, has temporarily reduced tensions in a historically sensitive region. Russia’s request for direct talks with Ukraine has sparked renewed optimism for a resolution in the ongoing Eastern European conflict. While there have been reports of minor violations following the ceasefire agreement between India and Pakistan, the markets appear to be more focused on the overall diplomatic climate rather than on these isolated incidents.

Price Movements of the Week

Markets are trading this week with a strong focus on shifting macroeconomic dynamics, as traders assess technical zones and structural trends amid improving global sentiment and an active central bank calendar. Although risk appetite has returned in select areas, current price action still reflects a transition phase—not yet fully bullish, nor overtly defensive.

The U.S. Dollar Index (USDX) has slipped from the 100.60 resistance area ahead of critical U.S. CPI data. Forecasts place CPI at 2.4% and Core CPI at 2.8%. If inflation data underperforms, the index could remain capped below 102.00, where bearish technical patterns are beginning to form.

EURUSD has rebounded from the 1.1200 zone, signaling a mild bullish tone. A consolidation here may pave the way for higher moves, while any pullback toward 1.0970 could trigger renewed interest from euro bulls.

GBPUSD recovered after dipping below 1.32333 but still requires confirmation to sustain bullish momentum. The upcoming UK GDP figure (expected at 0.0%) and BoE Governor Bailey’s comments will be critical in determining if this recovery holds.

USDJPY extended its advance, climbing toward 146.60 and 147.40. Traders are watching for signs of either exhaustion or continuation, with the pair supported by stable U.S. yields and dovish commentary from the Bank of Japan.

USDCHF is testing the 0.8370 region. A move above could lead to 0.8530, though this area may attract bearish setups if risk-off flows resurface.

AUDUSD is rebounding off 0.6380 but lacks conviction. Should it drop again, 0.6260 remains a crucial level for potential bullish price action. The Aussie remains highly responsive to developments in China and broader risk sentiment.

NZDUSD mirrors AUDUSD’s trajectory, lifting off 0.5870 but lacking strong follow-through. A retreat could bring 0.5800 into focus for long-side setups.

USDCAD is consolidating around 1.3945, with resistance targets at 1.4055 and 1.4140. While the Canadian dollar has found some support from firm oil prices, near-term oil resistance may limit further gains.

USOIL is trending upward toward the 62.05 resistance level. If momentum persists, 63.15 becomes the next significant zone. However, with global tensions easing, the risk premium in crude prices could face headwinds unless new supply issues emerge.

Gold is drifting lower in line with softer inflation expectations. The 3,230 area is being monitored as a support level, with 3,120 eyed as the next zone of interest. Gold’s bearish structure may persist unless inflation surprises to the upside or geopolitical risks re-escalate.

Silver has fallen from the 33.20 zone and could test 31.657 or 30.95 before regaining bullish interest. Like gold, silver is tracking the broader macro narrative of cooling inflation and moderated risk.

Bitcoin moved close to all-time highs, buoyed by macro tailwinds and renewed optimism. A consolidation near 99,600 could attract new buyers. Ether (ETH) surged over 18% in two days, breaking above 1,900 and targeting 2,340 and 2,780 based on momentum strength.

S&P 500 remains on an upward trajectory, with resistance zones at 5,775 and 5,830 in focus. Fed Chair Powell’s comments later this week, along with inflation data, could influence whether the rally continues or stalls. Nasdaq is similarly strong, eyeing the 20,560 to 21,230 range.

Natural gas hit a new swing high, and a pullback to 3.50 may offer a bullish entry. Traders continue to monitor seasonal demand and broader commodity flows.

Nvidia continues its climb toward 120.40, with its intrinsic value pegged at 130. Amazon is trending toward 195.80, while Microsoft may push past 448.30 and challenge 456.03, provided consolidation patterns remain supportive.

This week’s price action highlights a market in flux—caught between renewed optimism and underlying caution. Traders remain sensitive to macro signals and technical structures as they seek clarity in a shifting global landscape.

Key Events of the Week

On Tuesday, markets will turn sharply toward inflation and monetary policy developments:

1. U.S. CPI y/y is expected to hold at 2.4%, with Core CPI y/y forecast to drop slightly from 2.8%. A softer reading could fuel expectations of a Fed policy pivot later this year.
2. BoE Governor Andrew Bailey is also scheduled to speak. His tone will be closely analyzed for forward guidance, especially with UK inflation softening.

A trio of key events will dominate market attention on Thursday:

1. UK GDP m/m is forecast at 0.0%, compared to the previous 0.5%. A flat figure could raise fresh concerns over post-Brexit economic momentum.
2. U.S. PPI m/m is projected to rise 0.2% after last month’s -0.4% reading, offering insights into upstream price pressure.
3. Fed Chair Jerome Powell will deliver remarks later in the day. Depending on CPI and PPI outcomes, his comments may shift market expectations for interest rates. A dovish tone may lift equities, while a hawkish stance could support the dollar.

While geopolitical tensions take a back seat this week, the focus has squarely shifted to inflation trends and central bank cues. With traders watching key data releases and policy speeches, price action across markets will depend on whether the easing narrative holds or if the tightening cycle still has further to go.

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