WTI Slides as Geopolitical Risks Ease | 1st July, 2025

Oil Slips, Risk Lifts

On July 1, 2025, global markets open the new month in a cautiously risk-on mood as tensions in the Middle East ease. WTI crude oil slips below $64.50, erasing earlier gains as safe-haven demand fades and supply concerns diminish. Silver (XAG/USD) struggles under $36.00, reflecting a lack of follow-through from bearish traders. Commodity-linked currencies like the Australian Dollar and New Zealand Dollar remain subdued despite a softer USD, weighed by weak China PMI data. Meanwhile, the Japanese Yen eases slightly from multi-week highs as USD/JPY stabilizes. Traders now turn their attention to key upcoming events including US ISM Manufacturing PMI and FOMC meeting minutes for further direction.

Silver Price Forecast (XAG/USD)

Current Price and Context

Silver (XAG/USD) trades just below the $36.00 level, struggling to gain traction as geopolitical tensions ease and investor risk appetite grows. Despite recent dips, bearish pressure appears limited, suggesting indecision in the market ahead of key US data and Fed signals.

Key Drivers

Geopolitical Risks: Easing Middle East tensions have reduced demand for safe-haven assets like silver, pressuring prices near technical support.

US Economic Data: Upcoming US ISM Manufacturing PMI and employment figures could influence USD strength and silver’s near-term direction.

FOMC Outcome: Market participants await clues from this week’s Fed minutes. A dovish tone may provide temporary silver support, while a hawkish stance could renew selling.

Trade Policy: US-China and North American trade updates remain quiet, keeping global commodity flows relatively stable.

Monetary Policy: Expectations of rate stability in 2025 are limiting silver’s upside despite weaker USD momentum.

Technical Outlook

Trend: Neutral to bearish near-term.

Resistance: $36.15, followed by $36.60 and $37.00.

Support: $35.60, then $35.00 and $34.45.

Forecast: XAG/USD may remain rangebound between $35.60–$36.15 until a strong directional catalyst emerges. A clean break below $35.60 could open downside toward $35.00.

Sentiment and Catalysts

Market Sentiment: Mixed sentiment across metals; silver traders show caution due to softer USD and risk-on equities.

Catalysts: US ISM data, Fed minutes, bond yields, and further updates on geopolitical risk.

WTI Oil Forecast (Crude)

Current Price and Context

WTI crude oil trades near $64.40 after losing momentum below the $64.50 level. The pullback follows reduced geopolitical tension between Israel and Iran, easing supply fears and curbing the risk premium built into energy markets. Despite signs of improving demand, oil remains pressured amid broader uncertainty over global growth and Fed policy direction.

Key Drivers

Geopolitical Risks: De-escalation in the Middle East lowers the immediate threat to oil supply, causing WTI to retreat from recent highs.

US Economic Data: Stronger demand seen in last week’s US inventory data is now counterbalanced by cautious sentiment ahead of this week’s macro releases.

FOMC Outcome: Traders await clarity from upcoming Fed minutes, which could influence demand expectations tied to economic activity.

Trade Policy: No new supply disruptions or trade curbs reported, keeping oil flows stable across key regions.

Monetary Policy: A stable rate outlook in the US offers little new support for crude, with inflation risks seen moderating.

Technical Outlook

Trend: Bearish short-term bias with failed attempt to hold above $65.00.

Resistance: $64.85, followed by $65.50 and $66.30.

Support: $64.00, then $63.25 and $62.60.

Forecast: WTI could test $63.25 support if downward momentum persists. A rebound above $64.85 may shift the bias back toward $65.50.

Sentiment and Catalysts

Market Sentiment: Cautious bearish sentiment as the market reassesses supply risk amid soft global demand signals.

Catalysts: Middle East headlines, US crude inventories, ISM Manufacturing PMI, and Fed policy commentary.

AUD/USD Forecast

Current Price and Context

The Australian Dollar (AUD/USD) trades near 0.6640, holding onto modest losses as the US Dollar remains weak and traders digest mixed signals from China. Risk sentiment is supported by lower geopolitical tensions, but weak Chinese Caixin Manufacturing PMI is capping Aussie upside.

Key Drivers

Geopolitical Risks: Easing conflict in the Middle East has lifted broader risk appetite, which typically supports the Aussie, though the effect is muted today.

US Economic Data: Traders are awaiting US ISM Manufacturing PMI and Fed updates, which may sway the greenback’s performance against the Aussie.

China’s Economy: China’s weaker-than-expected Caixin Manufacturing PMI (51.2 vs. 51.5 expected) adds pressure to AUD given Australia’s trade dependency.

Trade Policy: Trade conditions remain stable, but markets remain sensitive to any signals from Beijing or Washington.

Monetary Policy: The RBA is expected to remain cautious, while the Fed’s perceived loss of independence could weigh on the USD longer-term.

Technical Outlook

Trend: Consolidation bias; short-term pressure remains below 0.6660.

Resistance: 0.6665, then 0.6700 and 0.6725.

Support: 0.6620, then 0.6590 and 0.6565.

Forecast: AUD/USD may remain rangebound ahead of US data, with downside risk toward 0.6620 if China concerns persist.

Sentiment and Catalysts

Market Sentiment: Cautiously neutral with a slight bearish tilt; traders eye China data and Fed clues.

Catalysts: US ISM data, China services PMI, Fed commentary, and risk trends.

JPY Forecast (USD/JPY)

Current Price and Context

The Japanese Yen (USD/JPY) trades near 145.90, retreating slightly from multi-week highs after a sharp surge earlier in the session. Despite the pullback, the yen maintains a bullish tone as the US Dollar weakens across the board amid ongoing concerns over Fed independence.

Key Drivers

Geopolitical Risks: Diminishing tensions in the Middle East reduce demand for traditional safe havens, slightly softening the yen’s intraday strength.

US Economic Data: Market focus shifts to US ISM Manufacturing PMI and upcoming Fed signals, which may reintroduce volatility to USD/JPY.

FOMC Outcome: Traders remain wary of Fed credibility risks following political pressure on the central bank. Any further deterioration could weigh on the dollar and favor JPY.

Trade Policy: U.S.–Japan trade remains stable, but Trump’s recent comments on auto trade raise new questions about bilateral friction.

Monetary Policy: BoJ continues its dovish stance, but global risk aversion and dollar weakness are supporting yen gains.

Technical Outlook

Trend: Bullish bias with near-term exhaustion.

Resistance: 146.20, then 146.75 and 147.40.

Support: 145.50, then 145.00 and 144.20.

Forecast: USD/JPY may consolidate between 145.50–146.20 in the short term, with further downside if USD pressure continues.

Sentiment and Catalysts

Market Sentiment: Yen sentiment remains constructive amid weaker dollar tone and political concerns in the US.

Catalysts: US ISM Manufacturing PMI, Japanese wage data, and continued updates on Fed independence.

NZD/USD Forecast

Current Price and Context

NZD/USD is trading just under 0.6100, slipping modestly after China’s Caixin Manufacturing PMI came in below expectations. The Kiwi remains pressured by concerns over regional growth and limited upside catalysts, while the weaker USD offers partial support.

Key Drivers

Geopolitical Risks: Easing tensions in the Middle East support overall market calm, but have little direct impact on NZD pricing.

US Economic Data: Weaker USD due to Fed credibility concerns has limited NZD downside, but incoming US data will be critical for direction.

China’s Economy: China’s Caixin Manufacturing PMI slowed to 51.2 in June, down from 51.7 previously, stoking concerns over New Zealand’s key export partner and dragging on the Kiwi.

Trade Policy: No immediate changes in trade terms, but sensitivity to China’s economic health remains a factor.

Monetary Policy: RBNZ is expected to stay on hold; Fed’s independence issues and potential dovish tilt offer a temporary tailwind to NZD.

Technical Outlook

Trend: Bearish bias below key 0.6100 handle.

Resistance: 0.6115, then 0.6150 and 0.6180.

Support: 0.6070, then 0.6035 and 0.6000.

Forecast: NZD/USD may test 0.6070 support if China sentiment worsens. A break above 0.6115 would improve short-term tone.

Sentiment and Catalysts

Market Sentiment: Cautiously bearish due to China data; downside may be limited by weaker USD.

Catalysts: US ISM Manufacturing PMI, China’s services PMI, and regional risk appetite.

Wrap-up

Crude oil weakens to $64.40 as geopolitical pressure abates, setting a softer tone for commodity markets. Silver fails to reclaim momentum above $36.00, while antipodean currencies remain vulnerable amid mixed macro data. The Yen pares gains but retains bullish posture. With risk sentiment cautiously improving, all eyes are now on US macro indicators, China’s growth pulse, and Fed policy rhetoric to shape short-term market momentum.

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