Oil Spikes, Aussie Dips Amid Tensions | 12th June, 2025

Oil Surges, Aussie Falls

On June 12, 2025, global markets are navigating a complex landscape of escalating Middle East tensions, US-China trade deal developments, and heightened expectations for a Federal Reserve rate cut in September (68% probability). EUR/JPY pulls back to 165.80 from an eight-month high, reflecting USD weakness (DXY at 98.30) and safe-haven JPY demand. AUD/USD tests 0.6500, declining amid Israel-Iran tensions despite softer US CPI (2.4% YoY vs. 2.5% expected). EUR/USD surges to 1.1530, a two-month high, driven by USD selling and ECB hawkishness. USD/JPY drops below 144.00, pressured by JPY strength and Fed rate-cut bets. Gold (XAU/USD) holds near $3,340, while silver (XAG/USD) rises to $36.30, both supported by geopolitical risks. WTI crude jumps to $67.00, fueled by Middle East tensions and an EIA stockpile drop (-3.644M barrels). Key catalysts include US PPI, Initial Jobless Claims, and US-China trade updates, with tariff uncertainties and Iran nuclear talks in focus.

EUR/JPY Forecast

Current Price and Context

EUR/JPY trades at 165.80, pulling back from an eight-month high of 166.43, driven by JPY safe-haven demand and USD weakness.

Key Drivers

Geopolitical Risks: Escalating Israel-Iran tensions and US embassy evacuations in Iraq bolster JPY as a safe-haven, pressuring EUR/JPY.

US-China Trade Talks: Trump’s claim of a “done” deal (55% US tariffs vs. 10% China) awaits Xi’s approval, adding uncertainty. China’s six-month rare-earth export licenses signal leverage, capping EUR/JPY upside.

Monetary Policy: ECB’s hawkish signals (nearing end of rate cuts) support EUR, while BoJ’s tightening expectations (3.6% inflation) bolster JPY. Fed rate-cut bets (68% for September) weaken USD, indirectly impacting EUR/JPY.

US Economic Data: Softer CPI (2.4% YoY) and upcoming PPI (forecast unavailable) drive USD weakness, supporting EUR/JPY’s bullish bias.

Japanese Economy: Revised Q1 GDP at 0% and inflation at 3.6% YoY reinforce BoJ hawkishness, limiting JPY downside.

Technical Outlook

Trend: Bullish, within an ascending channel. RSI above 50 supports upside, but pullback suggests caution.

Resistance: 166.43 (eight-month high), then 167.50 (channel’s upper boundary).

Support: 164.92 (9-day EMA), then 163.18 (50-day EMA) and 162.10 (channel’s lower boundary).

Forecast: EUR/JPY may test 166.43 if trade tensions ease. Strong PPI could push to 164.92; Middle East escalation may drive 163.18.

Sentiment and Catalysts

Market Sentiment: X posts show EUR/JPY at 165.73, with bearish momentum if JPY strengthens further. LongForecast predicts 168 by June’s end.

Catalysts: US PPI, Initial Jobless Claims, US-China trade updates, Middle East developments, BoJ signals.

 Australian Dollar Forecast (AUD/USD)

Current Price and Context

AUD/USD trades at 0.6500, testing support amid Middle East tensions, despite USD weakness from softer CPI.

Key Drivers

Middle East Tensions: Israel-Iran escalation and US evacuation plans dampen risk sentiment, pressuring risk-sensitive AUD.

US-China Trade Talks: Trump’s trade deal (pending Xi’s approval) and China’s rare-earth restrictions impact AUD, given Australia’s trade ties with China (CNY743.56B surplus).

Australian Data: Consumer Inflation Expectations at 5% (vs. 4.1% prior) signal RBA caution, but trade balance surplus (5,413M vs. 6,100M expected) limits AUD gains.

US Economic Data: Softer CPI (2.4% YoY) boosts Fed rate-cut odds (68% for September), weakening USD and supporting AUD. PPI data is key.

RBA Policy: Dovish RBA (3.85% cash rate, projected 3.20% by 2027) caps AUD upside.

Technical Outlook

Trend: Bullish bias weakening, testing channel’s lower boundary. RSI above 50 but near 9-day EMA (0.6492).

Resistance: 0.6538 (seven-month high), then 0.6687 (eight-month high) and 0.6720 (channel’s upper boundary).

Support: 0.6492 (9-day EMA), then 0.6490 (channel’s lower boundary) and 0.6419 (50-day EMA).

Forecast: AUD/USD may hold 0.6490 if CPI-driven USD weakness persists. Middle East escalation could push to 0.6419; trade deal approval may drive 0.6538.

Sentiment and Catalysts

Market Sentiment: X posts note AUD/USD at 0.6492, with downside risk from geopolitical tensions. CoinCodex sees 0.67 by Q3 2025.

Catalysts: US PPI, Initial Jobless Claims, US-China trade updates, Middle East developments.

 EUR/USD Forecast

Current Price and Context

EUR/USD trades at 1.1530, a two-month high, driven by USD selling and ECB hawkishness.

Key Drivers

US Economic Data: Softer CPI (2.4% YoY vs. 2.5% expected) and 68% Fed rate-cut odds for September weaken USD, boosting EUR/USD. PPI data awaited.

ECB Policy: Hawkish signals (end of rate cuts nearing) support EUR, contrasting with Fed’s dovish outlook.

US-China Trade Talks: Trump’s tariff threats (unilateral rates in two weeks) add USD uncertainty, supporting EUR/USD.

Geopolitical Risks: Middle East tensions indirectly bolster EUR as a safe-haven relative to USD.

US Fiscal Concerns: Trump’s tariff policy and $4T bill fuel USD volatility, aiding EUR/USD.

Technical Outlook

Trend: Bullish, above 1.15. RSI nearing overbought levels suggests caution.

Resistance: 1.1530 (current high), then 1.1550 and 1.1600.

Support: 1.1450, then 1.1400 and 1.1300.

Forecast: EUR/USD may test 1.1550 if PPI is soft. Strong PPI could push to 1.1450; trade uncertainty may drive 1.1600.

Sentiment and Catalysts

Market Sentiment: X posts show EUR/USD at 1.1511, with bullish momentum. J.P. Morgan sees 1.08 by December 2025.

Catalysts: US PPI, Initial Jobless Claims, US-China trade updates, Middle East developments.

 USD/JPY Forecast

Current Price and Context

USD/JPY trades near 144.00, down 0.35%, pressured by JPY safe-haven demand and USD weakness.

Key Drivers

Geopolitical Risks: Israel-Iran tensions and US evacuations in Iraq bolster JPY, pressuring USD/JPY.

US-China Trade Talks: Trump’s tariff threats and China’s rare-earth restrictions add USD uncertainty, supporting JPY.

Monetary Policy: BoJ’s tightening expectations (3.6% inflation) contrast with Fed’s 68% rate-cut odds for September, weakening USD/JPY.

US Economic Data: Softer CPI (2.4% YoY) and falling Treasury yields (2-year at 4.01%) drag USD lower. PPI data is critical.

Japanese Economy: Stable GDP (0% Q1) and inflation (3.6% YoY) support JPY.

Technical Outlook

Trend: Bearish, below 144.55-144.50. Negative oscillators favor downside.

Resistance: 144.55 (Asian session peak), then 145.00 and 145.45 (two-week high).

Support: 143.70 (Asian session low), then 143.00 and 142.62-142.60.

Forecast: USD/JPY may test 143.70 if PPI is strong. Weak PPI could push to 143.00; Middle East escalation may drive 142.60.

Sentiment and Catalysts

Market Sentiment: X posts show USD/JPY at 143.96, with bearish momentum. LongForecast sees 147 by June’s end.

Catalysts: US PPI, Initial Jobless Claims, US-China trade updates, Middle East developments, BoJ signals.

 Gold Price Forecast (XAU/USD)

Current Price and Context

Gold (XAU/USD) trades near $3,340, supported by geopolitical risks and USD weakness.

Key Drivers

Geopolitical Risks: Israel-Iran tensions and US evacuations in Iraq drive safe-haven demand, supporting gold.

US Economic Data: Softer CPI (2.4% YoY) and 68% Fed rate-cut odds weaken USD, boosting gold. PPI data is key.

US-China Trade Talks: Trump’s tariff threats add uncertainty, supporting gold as a hedge.

US Fiscal Concerns: Trump’s $4T bill and tariff policy fuel volatility, aiding gold.

Monetary Policy: Fed’s dovish outlook contrasts with ECB/BoJ tightening, supporting non-yielding gold.

Technical Outlook

Trend: Bullish, near weekly highs. RSI above 50 supports upside.

Resistance: $3,352-$3,353, then $3,377-$3,378 and $3,400.

Support: $3,323-$3,322, then $3,300 and $3,288-$3,287 (200-period SMA).

Forecast: Gold may test $3,352 if PPI is soft. Strong PPI could push to $3,300; Middle East escalation may drive $3,400.

Sentiment and Catalysts

Market Sentiment: X posts suggest gold resilience at $3,340, with $3,500 possible if risks escalate. Long Forecast projects $3,600 by Q4 2025.

Catalysts: US PPI, Initial Jobless Claims, US-China trade updates, Middle East developments.

 WTI Crude Oil Forecast

Current Price and Context

WTI crude trades at $67.00, near two-month highs, driven by Middle East tensions and an EIA stockpile decline.

Key Drivers

Middle East Tensions: Israel-Iran escalation and US evacuations in Iraq raise supply concerns, boosting WTI.

US Oil Inventories: EIA reports a -3.644M barrel drop, tighter than the +100K expected, supporting WTI.

US-China Trade Talks: Trump’s “done” deal awaits confirmation, but tariff uncertainty could drag WTI if demand falters.

OPEC+ Output: July hike of 411,000 bpd caps gains due to oversupply fears.

US Economic Data: PPI could signal demand trends, impacting WTI.

Technical Outlook

Trend: Bullish, above $63.50. RSI near 60 suggests further upside.

Resistance: $67.50, then $68.00 and $70.00.

Support: $66.00, then $63.20-$63.30 and $60.00.

Forecast: WTI may test $67.50 if tensions persist. Strong PPI could push to $63.20; trade deal approval may drive $68.00.

Sentiment and Catalysts

Market Sentiment: X posts show WTI at $67.00, with $70 possible by Q4 2025 per Long Forecast.

Catalysts: US PPI, Initial Jobless Claims, US-China trade updates, Middle East developments, OPEC+ updates.

 Wrap-up

On June 12, 2025, markets are driven by Middle East tensions, lifting WTI crude ($67.00), gold ($3,340), and silver ($36.30), while pressuring AUD/USD (0.6500). EUR/JPY (165.80) pulls back, EUR/USD (1.1530) surges, and USD/JPY (144.00) dips amid USD weakness (DXY at 98.30). US PPI, Initial Jobless Claims, and US-China trade updates are critical, with Israel-Iran risks and Fed rate-cut bets (68% for September) adding volatility.

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