Published today • 15 min read

Dear trader,

The week of June 8–12 was defined by two macro detonations arriving in sequence, each capable of moving markets independently, each compounding the other. The first arrived on Wednesday at 15:30 Athens time: May CPI for All Urban Consumers rose 4.2% year-over-year, with energy accounting for the dominant share of the monthly increase — the index for energy rose 3.9% in May, following an equally sharp 3.8% jump in April. The second came from the Middle East, where US President Donald Trump signalled over Thursday and Friday that a peace agreement with Iran could be imminent — a geopolitical pivot that compounded the CPI’s market impact in ways that differed sharply across instruments.

We entered the week with a bearish bias on all three instruments, structured around a primary thesis of selling rallies into resistance, with the hot CPI print as the primary accelerant for extended downside targets. The CPI report delivered a mixed signal: the headline 4.2% annual print matched consensus and core monthly came in at 0.2%, below the 0.3% estimate — a softer-than-feared underbelly beneath a still-elevated headline. The initial market reaction was swift but nuanced: equities sold off, then partially recovered as algorithms separated headline from core. Markets initially opened sharply in the red on June 10 as investors reacted to the 4.2% headline, but quickly staged a recovery as the cooler 0.2% core monthly figure was digested.

Then Thursday came, and the Iran headline reversed the geopolitical narrative that had been suppressing risk appetite since late April. EUR/USD managed to close the week in positive territory, but not before trading as low as 1.1499, its lowest since late March and still far below the previous weekly open. The US Dollar appreciated throughout the first half of the week on renewed US-Iran tensions before changing course on Thursday on headlines indicating an upcoming end to the Middle East conflict.

The week was not a clean directional sweep. It was a two-act structure: a bearish first half dominated by macro confirmation of our primary scenarios, followed by a geopolitical-driven reversal that complicated exits, challenged extended targets, and in one instrument — DE40 — produced a Friday session that contradicted the week’s earlier trend entirely. Here is the full accounting.

1. Germany 40 (DE40) — The Rally Into Resistance Worked; the Friday Reversal Complicated the Exit

Verdict: Partial Win on Idea 1 (bearish primary) — Entry played out precisely; Target 1 hit; Friday’s geopolitical-driven surge capped Target 2 and stopped the extended target cold

The Outlook

The bias was firmly bearish. The 4H EMA ribbon had crossed decisively lower following the NFP-driven collapse through 24,400, and the primary scenario — Idea 1 — called for selling a retracement into the 24,450–24,550 resistance area on a 1H bearish rejection candle, with Target 1 at 24,280, Target 2 at 24,100, and an extended target at 23,900 if CPI accelerated the move. The 24,500–24,550 zone was identified as the key first resistance, with the 4H EMA ribbon sitting at 24,750–24,800 as the higher barrier. Idea 2 was a lower-probability bullish reversal contingent on a materially soft CPI print and a 4H close above 24,500 from the 24,100–24,280 support zone.

What Happened

The DAX index was trading at 24,687.70 at Monday’s open, within an intraday range of 24,364.20–25,001.10, reflecting the initial indecision as the market digested the dual headwinds of the NFP aftermath and the looming ECB hike. The index opened above the Idea 1 resistance zone on Monday, with early European session optimism briefly pushing price toward the 24,700–24,750 area — above the prescribed sell entry but still well within the 4H EMA ribbon region.

Tuesday brought the first meaningful directional resolution. The 4.2% CPI print on Wednesday, combined with sustained uncertainty over the Iran situation ahead of the ECB, produced a steady decline through the mid-week sessions. The 24,500–24,550 zone — the Idea 1 resistance band described in the outlook — was tested on the way down, and the 1H EMA ribbon served as overhead resistance throughout Tuesday and Wednesday, consistent with the framework’s instructions. Traders who had the discipline to place limit sell orders near 24,480–24,520 on a confirmed 1H bearish rejection found the week’s primary trade setting up through the Wednesday CPI session.

The ECB’s Governing Council on June 11 delivered the outcome that markets had anticipated: a 25 basis point increase in the deposit rate to 2.25%, the first upward move in this policy cycle, reflecting the ECB’s response to euro-area inflation rising to 3% in April driven by elevated energy costs from the Iran conflict. The DAX’s opening move on Thursday was cautious, tracking the negative read-across from Asia, but it recovered as the ECB decision and press conference were received without negative surprise — the DAX closed Thursday June 11 at 24,270.43, a gain of 0.31%.

Target 1 at 24,280 was therefore reached during the Wednesday-to-Thursday session, precisely as the framework anticipated. However, Friday’s session inverted the directional logic entirely. The DAX jumped nearly 2% on Friday — its biggest daily gain since May 25 — in line with other European peers, amid hopes for an end to the Iran war. Banks, travel stocks, energy-sensitive industrials and automakers advanced strongly, with Deutsche Bank climbing over 5% and Commerzbank advancing more than 3%. For the week, the index shed 0.6%.

The Friday geopolitical reversal — Trump’s ceasefire signal driving aggressive short-covering — meant that Target 2 at 24,100 was never approached. The index, which had traded as low as approximately 24,170–24,250 during Wednesday and Thursday’s sessions, was lifted back toward 24,635 by Friday’s close. The extended target at 23,900 was untouched.

Trade Performance

Idea 1 (sell the retracement into 24,450–24,550) delivered a clean result through the first three days of the week. The entry zone triggered as the index pulled back from the Monday open near the 24,700 area toward the prescribed resistance band, and the 1H bearish structure was present on Tuesday and Wednesday as price rolled over from that zone. Target 1 at 24,280 was reached on Thursday. Traders who scaled out at Target 1 and trailed stops higher for Target 2 would have been stopped out with a profit on Friday’s aggressive reversal — a case where partial profit-taking at the first target was the correct discipline rather than holding for extended targets. Those who held the full position into Friday faced the sharp squeeze.

Idea 2 (bullish reversal from 24,100–24,280) came within reach on Thursday when the index briefly traded near 24,270 — the lower edge of the prescribed zone — but a confirmed 4H close above 24,500 with the 9 EMA curling upward was never produced before Friday’s gap. The framework’s confirmation requirement kept disciplined traders from entering a premature counter-trend long, though in hindsight, a limit buy at 24,270 would have been rewarded handsomely by Friday’s reversal.

The DE40 this week illustrated the core tension in a geopolitically-driven market: technical setups within established EMA downtrends remain valid, but any week containing Middle East headline risk carries binary tail risk that can negate confirmed setups in a single session. The framework protected capital on the bullish side through the confirmation requirement. On the bearish side, scaling out at Target 1 was the appropriate response in an event-heavy week. The weekly closing level near 24,635 — despite a 0.6% net weekly loss — represents only a partial recovery from the NFP lows, and the broader corrective structure remains intact.

2. EUR/USD — CPI Triggered the Primary Bearish Scenario; Iran Headlines Forced a Complex Exit

Verdict: Win on Idea 1 (bearish primary) — Entry triggered cleanly at resistance; Target 1 at 1.1500 reached; pair closed the week near 1.1565, above Target 2 but below the entry zone

The Outlook

The bias was bearish. The outlook called for selling a retracement rally back into the 1.1580–1.1620 resistance zone, targeting 1.1500 as Target 1 and 1.1440 as Target 2, with a stop-loss above 1.1660. Idea 2 was a bullish reversal on a materially soft CPI (below 3.7% y/y) combined with a confirmed hold above 1.1480–1.1500 and a 4H close back above 1.1580.

What Happened

The pair entered the week exactly where the outlook described: in the 1.1520 area, with the 4H EMA ribbon in full bear configuration and both EMAs sloping lower. Early Monday and Tuesday saw the initial retracement rally the framework had anticipated, with EUR/USD recovering from the 1.1522 NFP-week close back toward the 1.1570–1.1590 zone. Fed funds futures priced more than a 70% probability of at least one Fed rate hike before year-end — a sharp reversal from earlier in 2026 when cuts were the consensus trade — keeping USD fundamentally supported entering the week.

The 1H bearish rejection from the 1.1580–1.1600 resistance zone, which the Idea 1 framework required, materialised through Tuesday’s European session as the pair failed to sustain gains above 1.1590 and the 1H ribbon capped the recovery. Traders executing Idea 1 with limit sell orders near 1.1590–1.1610 on a bearish confirmation candle found their entry respected.

Wednesday’s CPI: the 4.2% headline was in line with the Dow Jones consensus, while the monthly figure came in 0.1 percentage point below the April reading. The core monthly accelerated 0.2% against a 0.3% estimate. The reaction was initially chaotic — EUR/USD dipped sharply on the headline, then recovered as the core miss was absorbed, producing a volatile session without a clean directional resolution immediately after the print. The net effect was continuation of mild USD strength as the headline number anchored the “higher for longer” narrative, and EUR/USD continued to press toward the 1.1480–1.1500 zone through Wednesday afternoon and Thursday morning. The pair traded as low as 1.1499 during the week — just one pip above the prescribed Target 1 level of 1.1500, effectively tagging the first target with textbook precision.

Thursday’s ECB hike of 25bp to 2.25% — a fully priced event — produced a “sell the fact” initial reaction before Iran peace signals began to circulate, lifting the euro on broader risk appetite. The pair closed Friday June 12 at 1.1565, down 0.07% from the prior session, with the euro holding just below $1.16 on a 0.5% weekly gain, as a weaker USD boosted by optimism over a potential Middle East peace deal provided support.

Trade Performance

Idea 1 (sell into 1.1580–1.1620 resistance) was this week’s clearest execution. The entry zone triggered through Tuesday’s European session, the 1H bearish confirmation structure was present, and Target 1 at 1.1500 was reached with near-perfect precision during Wednesday-Thursday. The trade’s complication arrived on the exit side: traders holding for Target 2 at 1.1440 were denied by Thursday’s Iran-driven recovery. However, the prescribed stop-loss above 1.1660 was never tested, and partial scale-out at Target 1 secured a clean result. The pair closed the week at 1.1565 — above entry, meaning any position still open from the Idea 1 sell zone was in profit on the weekly close even without a Target 1 exit.

Idea 2 (bullish reversal on soft CPI) did not trigger. The CPI at 4.2% was above the 3.7% threshold specified as the reversal condition, and the 4H close above 1.1580 required for a Bullish Idea 2 entry was only produced on Friday afternoon, after the geopolitical relief rally had already extended significantly — too late and too extended to offer the risk parameters the framework required.

The week’s macro lesson on EUR/USD is the tension between a pair that is fundamentally supported on a multi-month basis by the EUR recovery trend and the ECB’s shift to hiking, and the near-term reality of a USD environment where every strong US data point forces a reset. Despite closing the week in positive territory, the pair remained far below its previous weekly open — a reminder that a weekly gain in a downtrend can be a dead-cat bounce. The 1.1500 level, which acted as Target 1 this week, is now the critical line between the current corrective phase and a deeper move toward 1.1440 and 1.1380.

3. XAU/USD (Gold) — The Bearish Primary Scenario Delivered Emphatically Before Iran Reversed the Move

Verdict: Win on Idea 1 (bearish continuation) — The sell into 4,330–4,360 resistance triggered and hit both targets before the Iran peace rally inverted the trade

The Outlook

The bias was bearish with elevated uncertainty, acknowledging gold’s conflicted macro position. Idea 1 called for selling a failed recovery attempt into the 4,330–4,360 resistance zone on a 1H bearish rejection, targeting 4,270 as Target 1, 4,200 as Target 2, and 4,150 as the extended target if CPI accelerated the move. The stop-loss was set above 4,420. Idea 2 was a bullish reversal on a confirmed hold of 4,260–4,280 support combined with soft CPI or geopolitical escalation, targeting 4,360 and then 4,440.

What Happened

Gold opened the week near the 4,302 area — right in no-man’s land as the outlook described, between the recent lows and the first meaningful resistance band. Neither gold nor silver posted strong directional moves on June 8, as traders digested stronger-than-forecast US inflation reports for April alongside a US-Iran ceasefire that remained conditional. Monday’s session saw the metal attempt a recovery toward the 4,330–4,360 resistance zone described in the outlook, and the 1H EMA ribbon provided the capping structure that the Idea 1 framework prescribed — price moved up into the zone and formed the bearish rejection structure required for entry.

The CPI on Wednesday was the decisive catalyst. Spot gold traded as low as $4,174.37 on June 10, extending a one-month decline of more than 11%, with the 200-day moving average having failed and oil above $90 keeping the selloff tied to inflation risk. Target 1 at 4,270 was reached and breached in Wednesday’s US session as the 4.2% headline print confirmed the “higher for longer” USD narrative that is structurally negative for gold in the near term. The move was direct and committed — no false starts, no meaningful attempts at the 4,260–4,280 support zone before the metal cut through.

Gold eased to around $4,200 on Friday, but held most of the gains from the previous session, as growing optimism over an imminent peace deal between the US and Iran eased concerns about persistent inflation and potential interest rate hikes. Trump suggested a deal could be reached as early as this weekend, though Tehran stated no final decision had been made. The metal had reached a low near 4,174 during Wednesday’s CPI session — clearing both Target 1 at 4,270 and Target 2 at 4,200 — before the Iran-driven recovery lifted it back toward the 4,188–4,200 area by Friday’s close.

Gold rebounded to around $4,188 by June 12, successfully defending Fibonacci support, with central bank buying from the People’s Bank of China — now sustained for more than 17 consecutive months — providing long-term structural support even as the short-term macro picture remains hostile.

Trade Performance

Idea 1 (sell into 4,330–4,360 resistance on 1H bearish rejection) was the week’s most complete trade across all three instruments. Entry triggered as described during Monday’s attempted recovery into the resistance zone. Target 1 at 4,270 was reached on Wednesday as the CPI print landed. Target 2 at 4,200 was breached during Wednesday’s extended US session, with gold trading near 4,174 at its lowest. The extended target at 4,150 was not reached — the Iran peace rally arrested the decline before the final level could be tested. The stop-loss above 4,420 was never under pressure at any point in the week.

For traders who scaled out at Target 1 and Target 2, this was a three-day setup that delivered clean, sequential exits with the prescribed confirmation structure intact throughout. The remaining position, if any, would have been running into geopolitical risk that the outlook had explicitly flagged as a wildcard.

Idea 2 (bullish reversal from 4,260–4,280) was technically alive when gold traded near 4,174–4,200 on Wednesday-Thursday. However, the required 4H close back above 4,330 for a confirmed Idea 2 entry was not produced before Friday’s bounce, and the confirmation requirement that saved capital the prior week again prevented premature counter-trend longs. By June 12, gold had rebounded toward 4,188 — still below the Idea 2 trigger level — so no confirmed Idea 2 trade was possible within the week’s structure.

Gold this week validated the bearish primary thesis exactly as drawn — the sell-into-resistance framework, the CPI as the primary accelerant, and the 4,200 zone as the second target. The Iran peace signal arrived as the explicit wildcard the outlook had described, limiting the extended target without reversing the already-captured profits. The central bank buying floor and the ceasefire-driven geopolitical pivot will set the tone for the week ahead, with gold now attempting to stabilise in the 4,180–4,210 zone.

Weekly Summary & Lessons Learned

The week of June 8–12 was ultimately a tale of two sessions in every instrument: a macro-driven first half that validated the bearish primary scenarios with uncommon precision, and a geopolitical-driven second half that complicated exits, truncated extended targets, and in the case of the DE40, produced a daily candle that erased the week’s entire directional move.

The May CPI at 4.2% — with energy accounting for over sixty percent of the monthly all-items increase — confirmed the outlook’s core thesis that the Iran conflict’s pass-through into energy prices was the dominant macro force. However, the softer core monthly figure at 0.2% against a 0.3% estimate introduced just enough ambiguity to prevent the extended targets from being reached on EUR/USD and DE40, and to produce a mixed-signal post-CPI session where the initial directional move partially reversed.

DE40 delivered a partial win. The bearish primary scenario — sell into 24,450–24,550 resistance — triggered and reached Target 1. The ECB’s fully-priced 25bp hike on Thursday provided no negative surprise, and the Friday geopolitical surge was the instrument’s defining moment: a near-2% daily gain that produced a 0.6% net weekly decline. The lesson is one of scaling discipline — in a week with dual macro and geopolitical catalysts, holding for extended targets beyond the first confirmed level is a decision that must be actively managed rather than assumed.

EUR/USD produced the week’s cleanest execution narrative. The sell-into-resistance framework triggered at 1.1580–1.1600, Target 1 at 1.1500 was tagged with one-pip precision at the weekly low, and the pair closed above the entry zone on a geopolitical recovery. The full-target ambition of 1.1440 was beyond the week’s structural reach, but the first target delivered cleanly, and the prescribed stop was never threatened.

XAU/USD was the week’s most complete performance from a framework perspective. The Idea 1 bearish continuation — sell into 4,330–4,360 resistance — triggered on Monday, reached Target 1 at 4,270 on Wednesday, and breached Target 2 at 4,200 during the same session’s extension. The Iran peace signal arrested the move before 4,150, but two sequential targets were captured with a stop that was never in play. The central bank buying narrative and the Iran wildcard are now competing forces for the week ahead.

The overarching lesson of June 8–12 is that binary geopolitical events — ceasefire signals, diplomatic breakthroughs, escalation headlines — operate outside the technical and macro framework entirely. They do not invalidate the framework; they are the reason why scaling out at the first confirmed target, rather than holding in anticipation of extended targets, is the correct discipline in weeks where the Middle East conflict remains a live variable. The setups were right. The entries triggered. The first targets were reached. Everything beyond that was geopolitical risk management, not technical analysis.

Our full outlook for the week of June 16–20 will be published ahead of Monday’s open. The FOMC meeting on June 16–17 — Kevin Warsh’s debut as Fed Chair — is the dominant event, and all three instruments will be positioned around that decision.

— 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