Powell Takes the Stand: Markets Await Fed Testimony Amid Cooling Middle East Tensions | Weekly Analysis (June 23–27, 2025)

Market Sentiment Overview

Geopolitical tensions cooled as Trump granted Iran a “last chance” two-week deadline, reducing safe-haven demand and pressuring the Dollar. Gold retreated below $3,400 while the S&P 500 eyes record highs amid massive foreign inflows ($138 billion expected this year). The EUR/USD consolidated around 1.1500 after its sharp correction, while GBP/USD staged a comeback from monthly lows despite the BoE’s dovish shift. Focus turns to Powell’s congressional testimony and Friday’s crucial PCE inflation data as markets assess Fed policy direction.

Currencies

USD Index: Technical Breakdown Confirms Bearish Momentum (98.36)

Current Trend: Strongly Bearish Market Sentiment: Very Negative

The DXY’s technical breakdown is now complete, trading at 98.36 well below all major moving averages. The geopolitical premium has faded as Middle East tensions cooled following Trump’s two-week Iran deadline. The RSI shows bearish momentum despite overbought conditions, suggesting further downside potential. Powell’s congressional testimony Tuesday-Wednesday becomes crucial, with markets virtually pricing no July cut (35% September probability). Friday’s PCE data (Powell estimated 2.3% headline, 2.6% core) could determine near-term direction.

Potential Resistance: 99.35, 100.37

Potential Support: 97.02, 96.00

EUR/USD: Strong Bullish Trend Intact Above All MAs (1.1521)

Current Trend: Strongly Bullish Market Sentiment: Very Positive

EUR/USD maintains its robust bullish structure at 1.1521, trading above all moving averages and hitting upper Bollinger Bands. Despite RSI showing overbought conditions, the bullish momentum remains intact. The pair continues to benefit from Dollar weakness despite ECB officials signaling the end of the cutting cycle. Monday’s Eurozone PMI data will be crucial for the continuation of the uptrend.

Potential Resistance: 1.1613, 1.1724

Potential Support: 1.1388, 1.1287

GBP/USD: Mixed Signals as Correction Deepens (1.3447)

Current Trend: Correcting Market Sentiment: Mixed

GBP/USD shows mixed technical signals at 1.3447, trading below short-term moving averages but above longer-term MAs. The pair is currently at lower Bollinger Bands following a bearish candle formation. The BoE’s dovish shift (6-3 vote split) initially pressured Sterling, but technical oversold conditions suggest potential for recovery. Governor Bailey’s testimony on Tuesday remains a key catalyst.

Potential Resistance: 1.3524, 1.3638

Potential Support: 1.3357, 1.3246

Stocks

S&P 500: Healthy Uptrend Continues Above All MAs (5,973.75)

Current Trend: Strongly Bullish Market Sentiment: Very Positive

The S&P 500 maintains its healthy uptrend at 5,973.75, trading above all moving averages with bullish momentum intact. Technical indicators show the index in the middle Bollinger Bands with room for further upside. The rally continues to be supported by massive foreign inflows ($138 billion expected in 2025), though concentration in the “Magnificent 7” remains a concern. Equal-weighted S&P remains 5% off peaks, highlighting narrow leadership.

Potential Resistance: 6,053.30, 6,137.40

Potential Support: 5,869.14, 5,781.79

Oracle (ORCL): Technical Reversal Signals at Key Resistance (205.13)

Current Trend: Potentially Reversing Market Sentiment: Cautious

Oracle shows potential reversal signals at 205.13 despite its strong uptrend above all moving averages. The stock is displaying bearish signals at the upper Bollinger Bands with declining momentum indicators. Despite a recent 13% surge in AI cloud momentum, technical indicators suggest a pause or pullback may be due. The 70% cloud infrastructure growth guidance continues to attract investor attention.

Potential Resistance: 220.00, 226.00

Potential Support: 195.67, 189.54

Nike (NKE): Oversold Bounce from Deep Downtrend (59.78)

Current Trend: Oversold Recovery Market Sentiment: Cautiously Optimistic

Nike shows signs of an oversold bounce at 59.78, despite remaining in a deep downtrend below all moving averages. The stock displays potential reversal signals with oversold stochastic and a bullish candle formation. Thursday’s Q4 earnings (expected EPS 12 cents vs 99 cents year-ago) will be crucial, with turnaround challenges including brand heat issues, tariff pressures, and declining consumer engagement.

Potential Resistance: 61.87, 64.10

Potential Support: 57.07, 54.75

Commodities

WTI Crude Oil: Bullish Breakout at Upper Bollinger Bands (75.51)

Current Trend: Strongly Bullish Market Sentiment: Very Positive

Oil demonstrates strong bullish momentum at 75.51, trading at the upper Bollinger Bands with a bullish RSI suggesting continued upward movement. The energy complex continues driving broader market sentiment despite cooling Middle East tensions. Iran’s nuclear program deadline and potential US involvement maintain risk premiums. Technical indicators confirm oil remains “the sheriff” of market movements, with crude’s influence far outweighing traditional fundamentals.

Potential Resistance: 77.12, 80.15

Potential Support: 73.56, 70.26

Gold: Consolidation Phase with Bearish Divergence (3,368.47)

Current Trend: Consolidating Market Sentiment Mixed

Gold shows consolidation at 3,368.47 within its strong long-term uptrend, but technical indicators reveal bearish divergence with declining stochastic and RSI. The precious metal pulled back from the upper Bollinger Bands as geopolitical tensions eased following Trump’s Iran deadline announcement. Despite the correction, the long-term bull run remains intact (+114% since November 2022 lows), with monthly gains in 13 of the last 16 months. Powell’s testimony and PCE data will be key catalysts for direction.

Potential Resistance: 3,434.23, 3,498.03

Potential Support: 3,272.19, 3,200.81

Key Events This Week (June 23–27, 2025)

Critical Economic Releases

• Monday: Global PMI data (Australia, Japan, Eurozone, UK, US preliminary June figures)
• Tuesday: Powell Congressional Testimony (House Financial Services), BoE’s Bailey testimony, Canada CPI
• Wednesday: Powell Senate Testimony, Australia CPI, Czech CNB rate decision
• Thursday: US Durable Goods Orders, Final Q1 GDP, Nike (NKE) earnings, Initial Jobless Claims
• Friday: US PCE Price Index for May (Powell estimates: 2.3% headline, 2.6% core), Canada GDP

Central Bank Speakers & Geopolitical Factors

• Powell’s Two-Day Testimony: Markets seek clarity on Fed policy amid uncertainty
• Iran Deadline: Two-week window for nuclear program negotiations
• Trade Tensions: July 9 EU deadline looms, US-Japan talks stalled
• BoE Guidance: Governor Bailey’s comments on future rate path

Corporate Earnings Focus

• Nike Thursday: Turnaround challenges, tariff impact, brand heat recovery
• Tech Sector: Continued AI infrastructure demand momentum
• Foreign Investment: Record $138B inflows supporting US equity markets

Week Ahead Outlook

Powell’s congressional testimony dominates the week as markets seek clarity on Fed policy direction amid economic uncertainty and geopolitical risks. His comments on tariff impacts, labor market health, and rate cut timing could significantly move USD and broader markets. Friday’s PCE data provides the final piece of the inflation puzzle before the Fed’s blackout period.

The cooling of Middle East tensions reduces immediate safe-haven demand but energy markets remain the “sheriff,” with oil prices continuing to drive broader market sentiment. Nike’s earnings offer insights into consumer health and tariff impacts on major corporates.

Risk management remains crucial as markets navigate between optimistic foreign inflows into US equities and underlying concerns about economic growth, geopolitical stability, and central bank policy divergence. The narrow leadership in equity markets and elevated valuations suggest potential for volatility despite the overall bullish trend.