|

Positive risk sentiment returns

lmportant news this week:

Markets stabilize as risk sentiment improves

Markets are showing signs of stabilization after recent volatility. The S&P 500 has recovered above the 7,300 level after successfully bouncing from technical support at 7,281, which coincides with the 50-day moving average on the daily chart. While the broader correction may not be over yet, buyers continue to defend key support levels, helping sentiment improve across risk assets. The US dollar remains firm, although its strength has not been sufficient to trigger another wave of selling in equities.
Geopolitical tensions have eased somewhat, contributing to a more constructive market backdrop. Oil prices continue to move lower despite ongoing tensions between the US and Iran, suggesting that markets are reducing geopolitical risk premiums. Lower energy prices could further support risk assets if the trend continues. Meanwhile, the Japanese Yen strengthened throughout yesterday's session but has already surrendered most of those gains today, indicating that traders remain reluctant to build aggressive long-JPY positions.

Market talk

Risk sentiment has improved modestly, helped by stabilizing equities and weaker oil prices. The S&P 500's ability to hold above its daily 50-MA remains an encouraging signal for bulls, while lower oil prices reduce concerns about inflation and economic growth. FX markets continue to monitor dollar strength closely, but recent price action suggests investors are becoming more comfortable adding risk exposure again. Overall, markets appear to be shifting from a defensive stance toward cautious optimism, although geopolitical headlines remain a potential source of volatility.

Tendencies in the markets

Equities sideways, USD weaker, BTC positive, oil weaker, Silver positive, Gold positive.

Author

Frank Walbaum

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

More from Frank Walbaum
Share:

Editor's Picks

AUD/USD falls from 0.7050 amid Iran uncertainty

AUD/USD is back in the red, falling from 0.7050 in the Asian session on Friday, reversing the previous day's goodish rebound from a nearly two-month low amid a modest US Dollar uptick. Iran downplayed Trump's claim that a deal has been approved and said that key issues, including the Strait of Hormuz and frozen funds, remain unresolved. This keeps a lid on optimism, which, along with Fed rate-hike bets, revives USD demand and weighs on the pair.

USD/JPY recovers above 160.00 as Mideast woes persist ahead of BoJ

USD/JPY recovers ground above 160.00 in the Asian session on Friday. Economic risks due to uncertainty in the Middle East undermine the Japanese Yen, while lifting the safe-haven US Dollar (USD) amid the US-Iran standoff. This acts as a tailwind for the pair, though fears of intervention could limit deeper JPY losses and cap the pair's rebound ahead of the BoJ meeting next week.

Gold sticks to losses amid Iran peace deal doubts and hawkish Fed bets

Gold attracts some sellers near the $4,246-$4,247 region during the Asian session, stalling the previous day's solid recovery move from its lowest level since November 2025. Mixed signals regarding a potential US-Iran peace deal revive demand for the safe-haven US Dollar.

Pi Network: Bulls attempt comeback as bearish strength fades

Pi Network (PI) is trading at around $0.120 after a modest recovery the previous day. Despite this recent rebound, traders should be cautious as a scheduled unlock of 14.8 million PI tokens on Friday could limit the token's recovery potential by increasing market supply. Meanwhile, the technical outlook is showing early signs of fading bearish momentum, suggesting a short-term bounce.

U.S. economic outlook: The Warsh era starts with a great debate

Warsh is starting his tenure at the Fed during a transition of sorts. Given the prior FOMC statement and the countless Fed speakers we’ve heard from since then, it seems Fed officials are in the midst of shifting toward a more neutral policy stance.

4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.