Risk improving, USD firm

Important news this week

Thu, 25th, 03:30 CET AU Employment Change / Unemployment Rate.
Thu, 25th, 14:30 CET US Core PCE Price Index / Final GDP.

Dollar strength becomes a headwind for markets

The US dollar continues to strengthen, creating a more challenging environment for risk assets. Historically, sustained dollar strength tends to tighten financial conditions and can weigh on equities, commodities, and emerging market currencies. While markets are not yet in full risk-off mode, the stronger greenback is becoming increasingly difficult to ignore. Investors are now questioning whether recent gains across asset classes can be maintained if the dollar rally extends further.
Equity markets remain largely sideways. The S&P 500 is holding recent gains, but momentum has slowed considerably, while technology stocks are beginning to underperform. After months of AI-driven gains, some investors appear to be taking profits and rotating into more defensive sectors. Crypto markets have managed a modest rebound from important support levels. Bitcoin continues to defend the 60,000 USD area, and the recent recovery broadly mirrors the stabilization seen in the Nasdaq. However, conviction remains limited as traders await fresh catalysts.

Market talk

Markets appear to be entering a transition phase. While risk assets are no longer surging higher, they are not breaking down either. End-of-month portfolio rebalancing flows could create temporary volatility and even trigger a short-term pullback across equities and FX markets. However, if current support levels hold, traders may begin looking for fresh opportunities early next month. For now, dollar strength remains the dominant theme, while equities, crypto, and commodities continue to search for direction. The next major move will likely depend on whether the US dollar extends its rally or begins to lose momentum.
USDJPY remains one of the key FX pairs to watch. The pair is approaching major resistance around 162, a level that could attract increased attention from Japanese authorities. A first attempt higher may face profit-taking or intervention concerns before the broader trend resumes. Meanwhile, GBPAUD remains in focus as the Australian Dollar struggles under the weight of weaker economic data and softer risk sentiment.

Tendencies in the markets

• Equities correcting, USD stronger, BTC weak, oil weak, Silver weak, Gold weak.