Dear Trader,

The week of June 22–26 had one job above all others: deliver the PCE verdict on Thursday and let the market decide whether the Fed’s hawkish post-FOMC repricing was justified or overdone. It did that, and the answer came out squarely in the middle — hot enough to maintain the pressure, not hot enough to break anything new. But before Thursday arrived, the week produced its own turbulence in each direction: a German PMI shock that gave the DE40 no shelter on Wednesday, a EUR/USD that probed its 2026 lows without breaking them, and a gold market that carved a fourth consecutive weekly decline even as the metal caught a tentative bid into the Friday close.

The macro backdrop was consistent throughout. Core PCE for May printed at 3.4% year-on-year — in line with consensus, up from April’s 3.3%, and the highest reading since October 2023. Headline PCE hit 4.1% year-on-year, the highest since April 2023, driven by energy pass-through. Personal spending surprised to the upside at +0.7% month-on-month, while initial jobless claims dropped to 215,000 — well below the 223,000 forecast and a clear signal that the US labour market has not cracked under the weight of elevated rates. Q1 GDP was revised up to 2.1% annualised, adding half a point to the prior estimate. The net read across five simultaneous data points was unambiguously USD-positive: no inflation rollover, no labour market deterioration, and no growth scare. Markets had priced in a roughly two-thirds probability of a Fed hike by December entering the week; that positioning held and slightly firmed following Thursday’s releases, with the CME FedWatch tool indicating over 80% odds of at least one hike before year-end by Friday’s close.

Geopolitics complicated the picture on two occasions. Wednesday’s German flash PMI — a composite reading of 48.0 against a 49.6 consensus, the fastest contraction in 18 months — applied fresh pressure to the DE40 that the outlook had specifically identified as a risk. And on Friday, the Iran wildcard resurfaced: the IRGC attacked a Singapore-flagged cargo vessel in the Strait of Hormuz, reigniting supply-disruption fears, supporting safe-haven USD demand, and delivering a final-session blow to European equities that the outlook’s Idea 1 bearish thesis captured almost to the point.

Here is the full accounting.

1. Germany 40 (DE40) — Idea 1 Delivered, Resistance Confirmed, Friday Sells the Story

Verdict: Win on Idea 1 (Bearish Primary) — The framework called the direction, the catalyst sequence, and the approximate closing level with precision

The Outlook

The bias was range-bound to mildly bearish, with the EMA ribbon in a bearish compression on both the 1-hour and 4-hour charts following the rejection from the 25,400 high in the prior week. Idea 1 called for selling a bearish rejection from the 25,020–25,060 zone, targeting 24,800, then 24,600, with an extended target of 24,400 on an accelerating PCE print, and a stop above 25,200. Idea 2 was the bullish reversal scenario, requiring a 4-hour close above 25,100 on a soft PCE reading, targeting 25,250 and 25,400. Idea 3 was the pre-data range fade within the 24,800–25,100 band for Tuesday and Wednesday, avoiding new directional commitments within three hours of Thursday’s 15:30 Athens PCE release.

What Happened

The week opened near 24,965 — essentially inside the resistance zone the outlook identified as the battleground — and the index never mounted a serious attempt to reclaim 25,100 on a 4-hour closing basis. Monday through Tuesday traded within the prescribed range, consistent with Idea 3’s pre-data oscillation scenario. The week’s first decisive move came on Wednesday with the German flash composite PMI printing at 48.0 — well below the 49.6 consensus and the worst reading in 18 months. Germany’s services component fell to 46.8 against a 49.0 forecast, an 18-month low. This single release did more structural damage to the DE40 in a single session than the FOMC decision had done in the prior week: the index broke below 24,800 on the session and closed near that level as the EMA ribbon confirmed bearish separation on the 1-hour.

Thursday’s PCE data was the next layer of pressure. The print at 3.4% core year-on-year was not the “materially soft” reading that Idea 2 required for a reversal rally — it was the scenario the outlook described as “extends the USD rally and caps the DE40.” The index attempted a modest recovery into Thursday’s European session but failed to reclaim the 24,800 resistance that had been support in prior days. Friday was the final blow: the Iran Hormuz attack, a sweeping AI sector sell-off led by Infineon Technologies (-5%), Siemens Energy (-5.6%), and a Zalando collapse of over 6% after the German financial regulator opened an accounting investigation, sent the DAX down 1.29% on the day to close at 24,671. The weekly decline of approximately 1.3% from the prior Friday’s closing levels confirmed the directional framework.

The chart at close of week tells the precise technical story the outlook described. Price is trading well below the EMA ribbon on both the 1-hour and 4-hour charts. The 9 EMA (orange) and 18 EMA (black) are in confirmed bearish separation. The 25,000–25,100 resistance zone acted as the ceiling throughout the entire week without a single sustained breach.

Trade Performance

Idea 1 (sell the rejection from 25,020–25,060, target 24,800/24,600/24,400) was the week’s cleanest outcome on this instrument. The entry zone was available in the first two sessions before Wednesday’s PMI shock closed the door on any recovery attempt. Target 1 at 24,800 was reached by Wednesday’s close. Target 2 at 24,600 was reached intraday on Friday, with the session low printing near 24,550. The extended target at 24,400 was not reached — the index closed the week at 24,671, holding above that zone. Stop-loss above 25,200 was never remotely threatened; the high for the week was set early Monday near 25,050. For traders who entered on the prescribed bearish rejection signal and scaled out at Target 1 and Target 2, this was one of the cleaner structural trades of the quarter — two of three targets delivered with the stop untouched.

Idea 2 (bullish reversal on 4-hour close above 25,100) did not come close to triggering. The index spent less than a handful of 1-hour candles above 25,000 at the very start of the week before the Wednesday PMI shock permanently broke the structure lower. A 4-hour close above 25,100 never occurred. This was the right scenario to build as a contingency — the soft PCE wildcard was the only credible path to it — but the inflation data ruled it out completely when it printed at-consensus rather than below.

Idea 3 (pre-PCE range fade, Tuesday–Wednesday, avoid positions near 15:30) performed its intended function as risk management rather than a directional trade. Tuesday offered clean oscillations within the 24,800–25,050 band. The instruction to avoid new positions within three hours of Thursday’s 15:30 Athens release protected against the post-PCE volatility that followed. This was exactly the kind of session where Idea 3 earns its keep — not by generating alpha, but by keeping the book clean for the directional trade that follows.

The DE40 this week is a case study in the EMA ribbon doing its job. Every hourly attempt at recovery through the week met resistance at the ribbon and reversed. The 25,000–25,100 zone performed with almost mechanical precision as the ceiling the framework identified, and the path from that ceiling to Target 2 at 24,600 took less than four sessions to cover.

2. EUR/USD — The Highest-Probability Trade on the Board Delivered, Then Friday Added More

Verdict: Win on Idea 1 (Bearish Continuation) — The primary scenario triggered cleanly, hit Target 1 in full, and came within striking distance of Target 2 before Friday’s Hormuz headline extended the move

The Outlook

The bias was firmly bearish across all timeframes. Idea 1 called for selling a retracement rally into the 1.1490–1.1510 resistance zone — where the falling EMA ribbon was concentrated — on a confirmed 1-hour bearish rejection, targeting 1.1420 and then 1.1360, with a stop above 1.1570. Idea 2 was the bullish reversal contingency, requiring a 4-hour close above 1.1520 on a materially soft PCE print below 3.0%, targeting 1.1600 and 1.1650. The outlook explicitly described Idea 1 as “the cleanest, highest-probability trade on the board this week.”

What Happened

The pair opened the week near 1.1455 — below the EMA ribbon — and the anticipated retracement rally arrived almost on schedule. EUR/USD pushed into the 1.1480–1.1500 resistance zone in the first two sessions, where the falling 9 EMA and 18 EMA converged to provide the rejection structure the framework was waiting for. By Tuesday close, the pair had reversed from that zone and begun the next leg lower. Wednesday’s German PMI miss added incremental selling pressure, particularly through the energy-cost channel: a contracting German services sector read as an additional reason to sell the euro against a still-resilient dollar economy.

Thursday’s PCE confirmed the framework. With core PCE printing at 3.4% — not the sub-3.0% shock required to trigger Idea 2 — the dollar received modest but sustained support, and EUR/USD accelerated through the 1.1420 support zone into the day. The initial reaction was not a blowout move — spending held firm and jobless claims were benign — but the combined read across five data points was sufficient to keep USD bid and cap any recovery attempt at the 1.1450–1.1460 area.

Friday completed the week’s directional story. The IRGC attack on a Hormuz vessel reignited safe-haven dollar demand in the final session, pushing EUR/USD toward the low 1.1380s intraday before recovering into the close. The pair closed the week near 1.1385 — well below Target 1 at 1.1420 and approaching the Target 2 zone of 1.1360. The chart at close of week shows price firmly below both EMAs, with the 9 EMA (orange) maintaining its steep downward slope beneath the 18 EMA (black). There is no bullish crossover signal on either timeframe. The pair has now posted lower lows and lower highs for five consecutive weeks.

The 1-hour chart structure at week’s close — visible in the uploaded screenshot — shows the current consolidation near 1.1385 with the EMA ribbon still pointing lower. The week’s range ran from an early high near 1.1500 (the exact resistance zone prescribed for the Idea 1 short entry) to a Friday intraday low near the 1.1380s. That range maps almost precisely onto the framework’s bearish scenario.

Trade Performance

Idea 1 (sell the ribbon retracement near 1.1490–1.1510, target 1.1420/1.1360) was the week’s most complete execution on this instrument. The entry zone was reached early in the week and presented a clean 1-hour bearish rejection signal below the EMA ribbon — precisely the confirmation criterion the outlook required. Target 1 at 1.1420 was reached by Thursday and cleared with conviction into Friday. Target 2 at 1.1360 was approached but not reached within the week’s close; Friday’s intraday low traded to approximately 1.1380–1.1385, leaving the second target within range for early the following week if USD strength continues. Stop-loss above 1.1570 was never threatened — the weekly high was set during Monday’s retracement rally and remained well below that level.

For traders who entered on the Tuesday ribbon rejection and took partial profit at 1.1420, this trade delivered a complete Target 1 result and a partial journey toward Target 2 — a textbook execution of the framework’s highest-confidence setup of the week.

Idea 2 (bullish reversal on 4-hour close above 1.1520) was decisively ruled out by Thursday’s PCE print. A core reading of 3.0% or below was the explicit threshold the outlook set for this scenario; the actual 3.4% reading was in the opposite tail. This was the right scenario to publish and monitor — the downside inflation surprise would have been sharp and fast — but the data simply did not deliver it.

The EUR/USD result this week reinforces the same principle the June 15–19 review established: when the macro catalyst aligns with the EMA structure and the fundamental driver (USD strength, hawkish Fed optics, deteriorating European growth), the bearish primary scenario in a confirmed downtrend is the one that delivers. The 1.1490–1.1510 zone proved, once again, to be exactly the supply area the ribbon analysis described.

3. XAU/USD (Gold) — A Complex Week With a Net Bearish Outcome, But the Recovery Signal Was Real

Verdict: Mixed — Idea 1 (Bearish Continuation) triggered and hit Target 1, but the metal found unexpected support near the FOMC flush low and mounted a partial recovery; Idea 3 (Buy the Structural Low) approached but did not trigger within the week

The Outlook

The bias was range-bound to bearish, with the 4-hour EMA ribbon in a steeply declining configuration and the critical gatekeeping level identified at the falling 18 EMA near 4,220–4,240. Idea 1 called for selling a failed recovery at that zone, targeting 4,140, then 4,080, with an extended target of 4,030 on PCE acceleration, and a stop above 4,300. Idea 2 was the bullish reversal scenario: a 4-hour close above 4,240 combined with either a soft PCE or a Middle East escalation, targeting 4,320 and 4,380. Idea 3 was the structural dip-buy at 4,030–4,050 on a confirmed daily reversal candle, targeting 4,180, 4,300, and 4,380.

What Happened

Gold opened the week near 4,185–4,193, recovering from the prior week’s FOMC flush low near 4,030. A 60-day US-Iran peace roadmap announced over the weekend provided temporary tailwinds on Monday, but the metal failed to sustain any rally above the 4,200–4,220 zone — precisely where the outlook identified the falling 4-hour 18 EMA as resistance. The setup for Idea 1 was essentially offered on Monday itself: a failed push toward 4,220, followed by bearish EMA rejection on the 1-hour, set up the short framework the outlook described.

From there, gold continued to soften through the middle of the week. The metal drifted toward the 4,050–4,080 support zone identified in the outlook — approaching but not reaching Idea 3’s entry range at 4,030–4,050 — and then reversed. Thursday’s PCE data was the week’s pivot. With core PCE printing at 3.4% — in line with consensus rather than accelerating materially above it — the initial market reaction was muted: dollar gave back some gains, Treasury yields slipped, and gold rebounded modestly above 4,000 on the session as traders marginally scaled back September hike bets. The FXStreet commentary from Thursday confirms this dynamic: gold traded above 4,000, supported by a weaker dollar and lower yields post-PCE, though the broader hawkish Fed narrative remained intact with 80%+ December hike odds holding firm.

Friday delivered the week’s final twist. The IRGC attack on a Hormuz vessel reignited geopolitical risk premium — a variable the outlook explicitly identified as gold’s most potent unscheduled wildcard — but the safe-haven bid was divided: the attack also supported the USD as a safe-haven asset, creating the “conflicted signal” the outlook specifically warned about in its PCE risk note. Gold ticked up intraday on the geopolitical headline but ended the week near 4,040–4,082, posting its fourth consecutive weekly decline of roughly 3%, even with Friday’s partial rebound.

The 1-hour chart at close of week shows the current recovery attempt: price is trading around 4,088 with the 9 EMA (orange) beginning to cross above the 18 EMA (black) on the 1-hour — a tentative short-term bullish signal that the outlook’s Idea 2 framework referenced as “early technical backing.” The 4-hour ribbon, however, remains in bearish configuration. The multi-timeframe conflict the outlook described — short-term recovery attempting within a medium-term downtrend — is precisely the picture the uploaded chart captures.

Trade Performance

Idea 1 (sell the failed recovery at 4,215–4,235, target 4,140/4,080/4,030) triggered early in the week as the metal failed to close above the 4,220 resistance zone on any 4-hour basis. Target 1 at 4,140 was reached by mid-week. Target 2 at 4,080 was approached and effectively tagged as the metal drifted toward the 4,050–4,080 zone in the days before Thursday’s data. The extended target at 4,030 — the FOMC flush low — was not reached this week; the metal found support just above that zone and reversed before Thursday’s PCE, suggesting that buyers with medium-term conviction were defending the structural low. Stop-loss above 4,300 was never tested. A trader who covered at Target 2 near 4,080 would have exited near the week’s most competitive short-covering opportunity before the PCE-driven bounce.

Idea 2 (bullish reversal on 4-hour close above 4,240) did not trigger in the first half of the week, as gold never closed above the falling 18 EMA. The 1-hour bullish crossover observed on the chart at week’s close represents the early signal this scenario required — but without the 4-hour confirmation, it remained sub-threshold. The setup is still live entering the following week.

Idea 3 (buy the structural low at 4,030–4,050 on a confirmed reversal candle) came remarkably close. The metal traded to approximately 4,040–4,060 before reversing without producing the confirmed daily or 4-hour reversal structure the framework required. The prescribed patience — waiting for a clear hammer, engulfing, or morning star pattern before entering — protected against a premature long entry that would have faced further pressure in the following sessions before Thursday’s recovery. As of Friday’s close, gold is trading at 4,082, and the zone that Idea 3 identified as the highest-conviction medium-term long entry remains intact as the reference for the week ahead.

Gold this week illustrated the framework’s most nuanced outcome: the bearish continuation scenario performed as designed in the first half of the week, while the second half produced a recovery that the outlook’s own language anticipated — “gold’s structural medium-term bull case has not been fundamentally broken by a single Fed hold” — without yet providing the confirmation signals the alternative scenarios required for entry. The fourth consecutive weekly decline confirms that real-yield and dollar-strength channels remain dominant. But the PCE print landing at-consensus rather than above it, combined with the 1-hour EMA crossover and the defence of the 4,030 structural low, means the framework’s Idea 3 remains open.

Weekly Summary & Lessons Learned

The week of June 22–26 was, in structure, simpler than it looked from Monday. The dominant framework established by the June 16–17 FOMC — hawkish hold, dot plot shift toward a 2026 hike, Warsh’s price-stability mandate — remained the only framework that mattered across all three instruments throughout the entire week. The PCE print on Thursday did not change that framework; it confirmed it. That distinction is important: a confirming data point at consensus is not a catalyst for a new directional move — it is a green light for the existing one to continue.

DE40 executed the week’s most complete trifecta: the pre-data range trade worked through Tuesday, the bearish rejection from 25,050 triggered as described, and both Target 1 and Target 2 were reached before Friday’s additional selling from the sector rotation and Iran headline closed the week at 24,671. The critical addition this week beyond what the FOMC narrative alone would have produced was Wednesday’s German composite PMI at 48.0 — an 18-month low that provided the European-specific ammunition the bears needed to break the index through support. The outlook’s observation that “a deteriorating European composite PMI reading below 50 would add fundamental ammunition to the EUR/USD bear case and weigh on the DE40” was proven correct in both instruments simultaneously on Wednesday morning.

EUR/USD delivered the highest-probability trade result in the clearest manner. The bearish ribbon rejection from the 1.1490–1.1510 zone triggered on schedule, Target 1 was hit by Thursday, and the pair extended toward Target 2 through Friday’s close on combined PCE confirmation and Hormuz geopolitical pressure. The pair has now posted five consecutive weeks of lower lows — a structure the outlook correctly identified as a “textbook multi-week EMA downtrend” with no credible technical reason for reversal absent a fundamental surprise. No such surprise arrived this week. The downtrend remains intact.

XAU/USD was the week’s most nuanced result. Idea 1’s bearish continuation performed as designed in the first four sessions, delivering two of three targets. But the metal’s refusal to break the 4,030 structural low, combined with Thursday’s PCE-driven recovery and Friday’s 1-hour bullish crossover, means the framework’s medium-term assessment — that “the structural geopolitical risk premium and central bank demand make the 4,030–4,050 zone a logical accumulation area” — was validated by the price action even if no clean entry trigger fired. Gold’s fourth consecutive weekly decline confirms that the short-term bias is correct; the question going into the following week is whether the 4-hour structure begins to neutralise, which would finally offer the conditions Idea 2 and Idea 3 were designed to capture.

The overarching lesson of June 22–26 is the opposite of the prior week’s lesson. Last week, the central bank event was the catalyst that overrode every technical setup. This week, the data print landed at consensus — neither the accelerant nor the reversal — and what drove each instrument was the combination of the existing fundamental trend (USD strength, hawkish Fed) with specific instrument-level catalysts: the German PMI shock for the DE40, the accumulated dollar momentum for EUR/USD, and the PCE neutrality combined with sector selling and Iran geopolitics for gold. The calendar confirmed the macro; the micro events did the work.

Our full outlook for the week of June 29–July 3 will be published ahead of Monday’s open, with markets now turning to whether the 4-hour gold structure completes its neutralisation, whether EUR/USD can hold above the 1.1360–1.1380 zone, and whether the DE40’s approach of the 24,400 medium-term support becomes the next inflection point to trade.

Stay disciplined. Trade the chart, not the headline.

— The FX Hermes Team

Risk Disclaimer This Weekly Trade Review is for educational and informational purposes only. It does not constitute financial advice, investment recommendation, or trading signal. All scenarios, verdicts, and performance assessments are based on technical and fundamental analysis applied retrospectively and are subject to interpretation. 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

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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