Dear Trader,

Market Overview & Key Events

The week of June 22–26 opens in the immediate shadow of last week’s FOMC decision, where new Fed Chair Kevin Warsh and the committee held rates unchanged at 3.50%–3.75%, citing persistently elevated energy-driven inflation and a resilient labour market as reasons to stay on hold. The hawkish tone of the June 16–17 statement — combined with a dot plot that pushed any rate cut expectations firmly into 2027 — triggered a sharp and broad USD rally across the final two sessions of last week. EUR/USD collapsed from the 1.1600 area all the way to a low near 1.1420 before staging a tentative recovery to the current 1.1455 zone. Gold was shaken down from the 4,380 area to a weekly low near 4,030 before recovering partially toward 4,180. The DE40 absorbed the blow more stoically, consolidating in the 24,800–25,100 range and currently printing near 24,965 — torn between a supportive European economic backdrop and the headwind of a stronger USD compressing export earnings.

The dominant event of this week is Thursday, June 25, which is a high-impact data day of exceptional density. At 15:30 Athens time, markets will simultaneously receive the Final Q1 GDP reading (consensus 1.6%), Initial Jobless Claims (consensus 225K), Advance Durable Goods Orders for May (consensus +0.2%), Personal Income and Spending for May, and most critically, the Core PCE Price Index for May — the Fed’s preferred inflation gauge. Core PCE came in at +3.3% year-on-year in April, and Wells Fargo economists project headline PCE to accelerate to 4.1% year-on-year in May driven by energy pass-through costs. A print at or above consensus would be the final nail in the coffin for any remaining rate-cut hopes in 2026, validating Warsh’s hold posture and adding fresh downside pressure to EUR/USD and gold. A surprise to the downside — core PCE printing near 3.0% or below — would be the only credible catalyst for a meaningful reversal rally across all three instruments.

Friday brings the final UoM Consumer Sentiment reading for June, which will serve as a secondary check on whether the US consumer is beginning to crack under the weight of elevated energy prices and borrowing costs. Wednesday sees S&P Global PMI preliminary readings, which will be watched for any deterioration signals in European growth — a negative surprise here would add to EUR/USD’s bearish case.

On the geopolitical front, the US-Iran situation remains structurally unresolved. Nuclear talks were abruptly cancelled last week, and fresh uncertainty surrounds the durability of the partial Strait of Hormuz reopening agreement. Any flare-up in Middle East tensions would be immediately gold-positive, risk-negative for the DE40, and add pressure to the euro through energy cost channels. The Iran wildcard cannot be dismissed; it remains the most potent unscheduled risk of the week.

1. Germany 40 (DE40) — Range Under Compression, Bearish Tilt

Technical Landscape

The 4-hour chart captures a market that staged a powerful rally from the June 11 lows near 24,000 all the way to a high near 25,400 in the week ending June 19, before rotating back down sharply into the 24,800–25,000 area into the close. The EMA ribbon is currently in a precarious neutral-to-bearish configuration: the 9 EMA (yellow) has been declining from the peak and is now converging with the 18 EMA (black), which itself is rolling over. Price is trading just below the yellow 9 EMA and near the black 18 EMA, essentially inside the ribbon — a compression that typically precedes a directional break. The weekly candle closed with a significant upper wick from the 25,400 high, indicative of supply pressure at that level.

On the 1-hour chart, the picture is one of compressed sideways action over the final two sessions of last week, with both EMAs now flattening and intertwined around the 24,950–25,000 zone. The 1-hour ribbon briefly turned bullish during the mid-week rally but has since curled back toward neutral. Price is oscillating around the 24,950–25,000 handle — a psychologically important level that has repeatedly acted as a battleground. The most recent 1-hour candles show indecision with mixed bodies and wicks in both directions. This is a coiling structure ahead of Thursday’s data barrage.

Most Likely Bias: Range with Bearish Tilt

The bias for the week is range-bound to mildly bearish. The rejection from 25,400 and the EMA ribbon compression on both timeframes reflect a market searching for direction. The path of least resistance, in the context of a hawkish Fed and a strong USD, tilts mildly lower — particularly if Thursday’s PCE print accelerates the existing downtrend narrative. However, the DE40 has proven resilient relative to its peers; European equity valuations are not as rate-sensitive as US tech-heavy indices, and German industrials benefit structurally from a weaker euro. A clear break in either direction is most likely triggered by Thursday’s macro data.

Key Levels to Watch

Resistance starts at 25,050–25,100, the immediate zone where the EMA ribbon sits on the 1-hour and where price has been consistently rejected across the second half of last week. A clean 1-hour close above 25,100 with both EMAs turning higher would represent the first genuine signal of recovery. Above that, 25,200–25,250 is the next meaningful overhead cluster — a zone of prior consolidation bodies from the week ending June 19. The 25,350–25,400 area is the week’s ceiling and represents the key high-probability supply zone; only a materially soft PCE reading or a significant geopolitical de-escalation event would send price back to test it.

On the downside, 24,800–24,850 is the first meaningful support shelf, corresponding to the 4-hour EMA ribbon area and where buyers stepped in repeatedly during the prior week’s consolidation. A sustained 4-hour close below 24,800 opens the door to 24,600–24,650, a structural support level that aligns with prior swing lows from mid-June. The critical medium-term support sits at 24,350–24,400, which was the base of the recovery rally that started June 11 — a break here would represent a meaningful structural deterioration.

Trade Ideas

Idea 1 — Bearish (Primary Scenario)

A failed attempt to reclaim the 25,050–25,100 resistance zone ahead of or following Thursday’s PCE release. Look for a 1-hour bearish rejection candle — a shooting star or bearish engulfing — forming below the EMA ribbon with both moving averages rolling lower.

• Entry: Sell around 25,020–25,060 on confirmed 1-hour bearish rejection
• Target 1: 24,800 · Target 2: 24,600 · Extended Target: 24,400 if PCE accelerates above consensus
• Stop-Loss: Above 25,200 (above the 4-hour ribbon and prior consolidation zone)
• Rationale: The recent rejection from 25,400, the EMA ribbon compression pointing toward a bearish resolution, and a macro environment dominated by USD strength and hawkish Fed optics all support selling into resistance. A hot PCE print on Thursday is the primary catalyst accelerant. The risk to this trade is a surprise soft PCE combined with a geopolitical de-escalation headline — size down before 15:30 Athens time on Thursday.

Idea 2 — Bullish Breakout (Alternative Scenario)

A soft PCE print — core reading below 3.0% year-on-year — triggers a broad risk-on reaction. Entry requires a confirmed 4-hour close above 25,100 with the 9 EMA crossing above the 18 EMA and both pointing higher.

• Entry: Buy on the 4-hour close above 25,100, or a dip entry near 24,800 on a confirming bullish hammer with EMA support
• Target 1: 25,250 · Target 2: 25,400
• Stop-Loss: Below 24,600
• Rationale: The medium-term structural trend from the April and June lows remains upward. A material inflation surprise to the downside would reset Fed rate-cut expectations aggressively and trigger broad risk-on flows into European equities. This is a lower-probability scenario but offers clean structure and a favourable reward if it plays out.

Idea 3 — Pre-PCE Range Fade (Tuesday–Wednesday)

In the two sessions before Thursday’s data, the DE40 is likely to oscillate within the 24,800–25,100 range. Fade the extremes with tight stops and reduced position size, targeting 150–200 point moves on either side. Avoid new directional commitments within 3 hours of the 15:30 Athens PCE release on Thursday.

2. EUR/USD — Structural Downtrend, Short Rallies

Technical Landscape

The 4-hour chart presents a textbook macro downtrend. From the mid-May highs near 1.1800, EUR/USD has traced a clean series of lower highs and lower lows across five weeks of trading. The most recent leg was the most violent — a collapse from 1.1630 all the way to the 1.1420 area following the hawkish FOMC decision on June 17–18. The 9 EMA (yellow) is steeply below the 18 EMA (black) on the 4-hour chart, and the black 18 EMA itself continues to slope lower — a confirmed bearish ribbon configuration. The brief recovery to the current 1.1455 zone has not reclaimed either moving average; price remains trapped below the ribbon, which sits around 1.1490–1.1520. This is a textbook bear flag structure forming on the 4-hour.

On the 1-hour chart, the collapse from 1.1630 to 1.1420 produced the bulk of the damage in a single vertical sequence of red candles over the June 17–18 session. There has since been a modest recovery — bouncing from the 1.1420 low toward 1.1480 — but the 1-hour EMA ribbon remains in full bear configuration, with both moving averages sloping lower and price unable to close above either of them with any conviction. The current 1-hour structure shows tentative stabilisation around 1.1455 but no bullish crossover signal, no higher high, and no meaningful accumulation — just a relief bounce within a downtrend.

Most Likely Bias: Bearish

The bias is firmly bearish across all timeframes. The combination of a confirmed EMA downtrend on both the 1-hour and 4-hour, a macro backdrop defined by Warsh’s hawkish hold, elevated US inflation expectations, and the structural vulnerability of the eurozone to energy-driven cost pressures leaves the path of least resistance pointing lower. The pair is approaching an important zone around 1.1420–1.1440 that has provided temporary support twice in recent weeks, but the case for a structural reversal from here is weak without a significant fundamental surprise. A hot PCE print on Thursday would accelerate the downtrend, while a soft reading would trigger a sharp but likely temporary short-covering rally.

Key Levels to Watch

Resistance begins at 1.1490–1.1520, where the 4-hour EMA ribbon is falling and price has been consistently rejected over the prior two sessions. This is the line in the sand for bears — a 4-hour candle close above 1.1520 with EMAs beginning to turn up would be the first credible shift in short-term momentum. Above that, 1.1570–1.1600 represents the pre-FOMC consolidation zone and the key structural level whose loss confirmed the recent breakdown — any recovery here would face heavy supply. The 1.1630–1.1650 area is where the more significant overhead resistance lies; reaching here would require a dramatic fundamental reversal.

Support sits first at 1.1420–1.1440, the double-bottom zone from the prior two tests and Friday’s low. A clean 4-hour close below 1.1420 would be a significant bearish development, opening the door to 1.1350–1.1370, which is the next visible structural demand zone from May’s price history. Below that, 1.1280–1.1300 represents the medium-term structural support — a level not tested since earlier in the Iran conflict period.

Trade Ideas

Idea 1 — Bearish Continuation (Primary Scenario)

A retracement rally back into the 1.1490–1.1520 resistance zone — likely early in the week as the post-FOMC dust settles and short-term traders square positions. Look for a 1-hour bearish rejection candle forming at or below the falling EMA ribbon, with the 9 EMA unable to cross above the 18 EMA.

• Entry: Sell around 1.1490–1.1510 on confirmed 1-hour bearish rejection below the ribbon
• Target 1: 1.1420 · Target 2: 1.1360
• Stop-Loss: Above 1.1570 (above the prior support-turned-resistance zone)
• Rationale: Selling into resistance within a multi-week EMA downtrend on both timeframes, backed by fundamental USD strength and a Fed that has just emphatically ruled out near-term cuts. A hot PCE reading on Thursday would be the accelerant for Target 2 and beyond. This is the cleanest, highest-probability trade on the board this week.

Idea 2 — Bullish Reversal (Alternative Scenario)

A PCE print materially below expectations — core reading at or below 3.0% year-on-year — triggers aggressive USD unwinding. Confirmation requires a 4-hour close back above 1.1520 with the 9 EMA beginning to curl upward through the 18 EMA.

• Entry: Buy on 4-hour close above 1.1520, or a limit entry near 1.1430 on a confirmed bullish reversal candle (hammer, morning star) at the support zone
• Target 1: 1.1600 · Target 2: 1.1650
• Stop-Loss: Below 1.1370
• Rationale: If inflation data surprises to the downside, the speed of the recent sell-off means short-covering flows would be swift and sharp. The 1.1420–1.1440 double-bottom zone is a technically logical reversal area. This remains the lower-probability scenario but warrants monitoring closely around Thursday’s 15:30 Athens data window.

3. XAU/USD (Gold) — Post-FOMC Flush, Complex Recovery

Technical Landscape

Gold’s 4-hour chart tells a dramatic story of a bear flush followed by a partial recovery. The metal dropped in near-vertical fashion from the 4,380 area all the way to a low near 4,030 — a decline of roughly $350 — driven by the hawkish FOMC shock and the associated USD surge. The sell-off brought both EMAs into a steeply declining configuration: the 9 EMA (yellow) crossed sharply below the 18 EMA (black), and both point lower at a significant angle. Following the low near 4,030, gold has recovered strongly back toward the 4,180 area — a roughly $150 bounce — but this recovery has so far been contained below the falling 18 EMA (black), which now sits near 4,220–4,240 on the 4-hour chart and represents the key gatekeeping level for any further recovery attempt.

On the 1-hour chart, the structure of the recovery is encouraging in isolation but cautionary in context. After bottoming near 4,030 on June 19, price rallied sharply to the 4,380 area by June 17 — but this was the pre-FOMC high, and the subsequent FOMC flush brought it right back down. The current 1-hour structure shows a mini recovery from the 4,120–4,140 zone, with the 9 EMA (yellow) having just crossed above the 18 EMA (black) on the 1-hour — a tentative short-term bullish signal. However, price is trading near 4,180 with the 1-hour ribbon pointing up but shallow, and the dominant 4-hour configuration remains bearish. This creates a multi-timeframe conflict: short-term momentum attempting to recover within a medium-term downtrend.

Most Likely Bias: Short-Term Range / Medium-Term Bearish

The bias is range-bound to bearish, with meaningful uncertainty driven by the geopolitical wildcard. In the near term, gold faces the headwind of a strong USD, elevated real yields following the hawkish FOMC hold, and the possibility that PCE data Thursday further cements the “no cuts in 2026” narrative. However, gold’s relationship with this macro cycle is not clean — as an inflation hedge, a hot PCE print creates a conflicted signal (USD positive but inflationary), which historically produces choppy, directionless gold price action rather than a clean directional break. The most important variable this week is the fate of US-Iran nuclear talks: any confirmed escalation or breakdown in diplomatic progress would be sharply gold-positive regardless of USD strength.

The 4,180–4,200 zone is currently acting as the battleground. A sustained 4-hour close above 4,220 — which would place price above the falling 18 EMA — would be a meaningful structural shift. Without that, the path of least resistance remains lower.

Key Levels to Watch

Resistance sits first at 4,220–4,240, which is where the falling 4-hour 18 EMA (black) currently resides, and where price action stalled during last week’s partial recovery. This is the critical level: a 4-hour close above 4,240 with both EMAs beginning to flatten and turn higher would signal that the immediate downtrend is losing momentum. Above that, 4,300–4,320 represents the next structural overhead zone from the mid-June consolidation, and 4,360–4,380 is the pre-FOMC high — the week’s ceiling and a level only reachable on a significant fundamental reversal.

Support begins at 4,140–4,160, the zone from which the current 1-hour recovery has bounced. A break below this area on the 1-hour — particularly with the 9 EMA recrossing below the 18 EMA — would signal the short-term recovery is over. Below that, 4,080–4,100 is intermediate support, with the critical structural floor at 4,030–4,050 representing last week’s FOMC flush low. A clean 4-hour close below 4,030 would be technically significant and open the door toward the 3,960–4,000 zone.

Trade Ideas

Idea 1 — Bearish Continuation (Primary Scenario)

A failed recovery attempt at the 4,220–4,240 resistance zone — where the falling 4-hour 18 EMA sits — offers a high-probability short entry. Look for a 1-hour bearish rejection candle forming at or below this zone, with the 4-hour EMA ribbon still pointing lower.

• Entry: Sell around 4,215–4,235 on confirmed 1-hour bearish rejection below the 4-hour ribbon
• Target 1: 4,140 · Target 2: 4,080 · Extended Target: 4,030 if PCE data reinforces USD strength
• Stop-Loss: Above 4,300 (above the prior consolidation zone)
• Rationale: Selling into the falling 4-hour EMA ribbon remains the technically sound approach within an established medium-term downtrend. A hot PCE print Thursday confirms the “rates higher for longer” narrative, which is fundamentally negative for non-yielding gold. The risk is a geopolitical escalation headline or a dramatically soft PCE — manage size carefully into Thursday.

Idea 2 — Bullish Recovery (Alternative Scenario)

A confirmed 4-hour close above 4,240 — breaking price above the falling 18 EMA — combined with either a soft PCE print or a Middle East escalation headline that reignites gold’s safe-haven bid. The 1-hour bullish EMA crossover already in place provides early technical backing for this scenario.

• Entry: Buy on the 4-hour close above 4,240, or a limit entry near 4,140–4,160 on a confirmed 1-hour bullish reversal candle
• Target 1: 4,320 · Target 2: 4,380
• Stop-Loss: Below 4,080
• Rationale: The $350 flush from 4,380 to 4,030 is a significant move that has likely cleared most leveraged longs. With the 1-hour EMA now showing a bullish cross, a recovery is technically feasible — and gold’s structural medium-term bull case (de-dollarisation, central bank buying, geopolitical risk premium) has not been fundamentally broken by a single Fed hold. A soft PCE or geopolitical shock would provide the fuel. The stop below 4,080 keeps the risk controlled relative to the target.

Idea 3 — Buy the Structural Low

If gold is dragged back toward the 4,030–4,050 zone — whether by a hot PCE print or broader risk-off selling — this area represents the highest-conviction medium-term long entry. Look for a clear daily bullish reversal candle (hammer, engulfing, morning star pattern on the 4-hour) at or near this zone before entering.

• Entry: Limit buy at 4,040–4,060 on confirmed bullish reversal structure
• Target 1: 4,180 · Target 2: 4,300 · Extended: 4,380 on sustained recovery
• Stop-Loss: Below 3,980
• Rationale: The FOMC flush low near 4,030 is now a well-defined technical reference. Physical buyers, central bank demand, and the structural geopolitical risk premium make this zone a logical accumulation area for medium-term positioning. The reward-to-risk from this level is among the best available in the current environment.

Risk Considerations & Key Events (Athens Time)

Thursday, June 25 — PCE, Q1 GDP Final, Jobless Claims, Durable Goods (15:30 Athens): This is the week’s dominant event — a simultaneous data dump of five high-impact releases at the same moment. Core PCE is the centrepiece: the consensus expects +0.1%–0.2% MoM and approximately 3.4% YoY. A print of 3.5%+ year-on-year extends the USD rally, reinforces Warsh’s hold posture, and adds downside pressure to EUR/USD and gold while capping the DE40. A print below 3.0% would be a market shock to the upside for risk assets. Reduce all position sizing to approximately 50% ahead of this release and let the confirmed direction following the initial volatility determine the second half of the week’s trade.

Wednesday, June 24 — S&P Global PMIs Preliminary (Europe and US, ~11:00 Athens for Europe): A deteriorating European composite PMI reading below 50 would add fundamental ammunition to the EUR/USD bear case and weigh on the DE40’s export-earnings component. A resilient reading would provide temporary support for European assets.

Friday, June 26 — UoM Consumer Sentiment Final (17:00 Athens) and Durable Goods Final: A secondary data point but important for gauging US consumer confidence in the wake of elevated energy prices. A significant miss from the preliminary reading would add incremental USD weakness at the end of the week.

US-Iran Geopolitical Overhang (Ongoing): The cancellation of nuclear talks last week and continued uncertainty around the Strait of Hormuz reopening means this risk has not been priced out. Any credible escalation or diplomatic breakthrough will override scheduled data flow in terms of intraday market impact. Gold remains the most sensitive instrument to this variable; monitor geopolitical newswires particularly ahead of the US session open and into the close.

Fed Speakers (Post-FOMC): With the FOMC meeting now concluded, Fed officials are out of blackout. Multiple governors — including Waller and Bowman — are likely to appear at various events during the week. Any dovish pivot in language following the hawkish June statement would be treated as highly significant; any further hawkish reinforcement would add to USD momentum and accelerate EUR/USD and gold downside.

Summary Outlook

The overarching theme for the week of June 23–27 is post-FOMC macro repricing ahead of a critical inflation confirmation. The Fed has spoken, the direction is clear, and Thursday’s PCE is the last major data point before markets must fully accept the “no 2026 cuts” reality — or be rescued by a genuine inflation surprise.

EUR/USD is the cleanest directional trade this week: selling into the falling EMA ribbon below 1.1520 is the highest-probability setup, with Thursday as the key catalyst and a hot PCE as the primary accelerant. The DE40 is more nuanced — European equity resilience may buffer downside, but the 25,000–25,100 zone needs to hold on a 4-hour close basis for the bulls to maintain any credibility. Gold is the most complex: structurally bearish in the short term but sitting near the FOMC flush low with geopolitical risk as a permanent wildcard. Do not carry full gold positions into Thursday without defined stops.

Position sizing discipline this week is non-negotiable. Thursday at 15:30 Athens time is a five-data-point simultaneous release — a scenario where the initial 60 seconds of price action will be violent and often misleading. Wait for confirmation. Trade the chart, not the number.

Stay disciplined. Trade the chart, not the headline.

— The FX Hermes Team

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Risk Disclaimer

This Weekly Market Outlook is for educational and informational purposes only. It does not constitute financial advice, investment recommendation, or trading signal. All scenarios and probabilities are estimates based on technical analysis and are subject to change. Trading leveraged instruments carries substantial risk of loss. Always use appropriate position sizing, stop losses, and risk management. Consult a licensed financial advisor before making investment decisions. Past performance is not indicative of future results.

Stay disciplined. Trade the chart, not the headline.– The FX Hermes Team