Market Sector Scanner: Oil Drops Below $100 as Ceasefire Lifts Stocks and Gold
Markets started last week cautiously but improved after a two-week Iran ceasefire pushed oil below $100, supporting equities and weakening the U.S. dollar. Gold moved higher as demand remained strong, while USD/JPY stayed near 160 due to the wide rate gap. With limited economic data, focus remains on Iran developments and oil prices, which are likely to drive market direction this week.
Markets were cautious early last week, but improved as hopes of easing tensions in Iran supported stocks and weakened the U.S. dollar. Midweek, news of a two-week ceasefire pushed oil prices back below $100, lifted equities, and added more pressure on the dollar. U.S. inflation stayed around 3%, while consumer sentiment fell on rising cost concerns. Gold benefited from lower oil prices and continued to move higher.
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Forex Market
USD/JPY
Last Week Recap
USD/JPY dropped quickly after the Iran ceasefire announcement, but later recovered as U.S. inflation remained above 3%. The wide interest rate gap between the U.S. and Japan continues to support the pair.
Technical Picture
Bollinger Bands have narrowed, showing lower volatility, with the lower band acting as support last week. After another rejection at 160 resistance, the 10-day moving average is now pointing slightly lower.
Outlook This Week
The market looks balanced in the short term, so range trading between 158 and 160 remains the preferred strategy. In the medium term, a move lower looks more likely.
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GBP/JPY
Last Week Recap
GBP/JPY moved higher last week, rising back toward highs seen earlier in the year. The pound strengthened, helped by improved risk sentiment following the Iran ceasefire, while the yen remained weak.
Technical Picture
Prices closed above the upper Bollinger Band, suggesting the market is overbought in the short term. There is also a large gap between price and the 10-day moving average, which increases the risk of a pullback.
Outlook This Week
In the short term, a selling opportunity may appear if prices move back below the upper Bollinger Band. In the medium term, the market is improving but still likely to remain range-bound.
EUR/USD
Last Week Recap
EUR/USD had a strong week, rising steadily as weaker U.S. economic data and a softer dollar—driven by falling oil prices after the Iran ceasefire—supported the pair.
Technical Picture
Strong buying momentum pushed EUR/USD above the upper Bollinger Band for much of the week, showing strong upward pressure. The 10-day moving average has now turned higher, confirming a shift in short-term momentum.
Outlook This Week
The recent move higher has broken the previous downtrend, improving the medium-term outlook. Buying on dips near the 10-day moving average looks like the preferred strategy, although short-term traders may find opportunities to sell after extended moves higher.
Equities
U.S. Stock Market
Last Week Recap
The Nasdaq saw another strong week, with gains supported by the Iran ceasefire and renewed interest in AI-related stocks, which helped drive buying across the tech sector.
Technical Picture
The upper Bollinger Band is starting to cap short-term gains, but the 10-day moving average is trending higher, keeping the overall outlook positive.
Outlook This Week
In the short term, the Nasdaq may trade sideways to slightly lower after recent strong gains. However, the medium-term trend remains positive, suggesting that buying on dips could be a profitable strategy.
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Commodities
Gold
Last Week Recap
Gold continued to move higher last week, supported by a weaker U.S. dollar. Gains were modest, but demand remained strong, helping the market maintain its upward trend.
Technical Picture
The 10-day moving average is trending higher and continues to provide support. Price is currently trading around the middle of the Bollinger Bands, suggesting a more balanced short-term market.
Outlook This Week
Although gains were limited despite a weaker dollar, the overall trend remains positive. As long as gold stays above the 10-day moving average, focusing on buying opportunities remains the preferred strategy.
Headlines around the Iran negotiations will remain the main focus this week, as the situation is still volatile and there are concerns about oil moving through the Strait of Hormuz. There are not many major economic releases, with U.S. PPI the main highlight. Oil prices will be key for markets, as traders watch if WTI stays below $100 or moves higher again if supply concerns increase.
