Category: Commodities

  • NY Session Tactical Brief – Wednesday, 27 May

    Regime: Mixed. VIX sits at 16.59, while US 2Y yields are edging higher and the DXY hovers around 98.95, signaling risk-off sentiment battling positive momentum.

    Today’s market themes:

    • Strait of Hormuz tension eases: Oil prices plummet on reports of progress restoring shipping through the Strait, impacting commodity currencies.
    • Australian CPI miss: Cooler-than-expected Australian inflation data pressure the AUD, raising RBA policy questions.
    • RBNZ telegraphs tightening: The Reserve Bank of New Zealand holds steady but signals future rate hikes, boosting the Kiwi.

    The setup: Oil’s sharp drop after Iran’s signal about Strait of Hormuz shipping is cascading through markets. Watch CAD and commodity FX for further weakness if oil sustains its losses. A break below $87.80 in WTI could trigger a further sell-off.

    Watch list (native time per event):

    • 11:30 AEST AUD: CPI y/y (forecast 4.4%, prior 4.6%)
    • 14:00 NZT NZD: Official Cash Rate (forecast 2.25%, prior 2.25%)
    • 09:00 JST JPY: BOJ Gov Ueda Speaks

    Bias by asset:

    • DXY:
      • Direction: Sideways.
      • Domestic (US): Fed signaling mixed / inflation expectations remain sticky.
      • Cross: Oil impact / safe-haven demand ebb and flow.
      • Levels: Support 98.80 / Resistance 99.20.
    • EUR/USD:
      • Direction: Neutral.
      • Domestic (EU): ECB hawks vs doves battle / Bund yields rangebound.
      • Cross: DXY weakness offset by risk-off flow / US-DE 10Y widening.
      • Levels: Support 1.1630 / Resistance 1.1680.
    • GBP/USD (Cable):
      • Direction: Bearish.
      • Domestic (UK): BoE cut expectations building / Gilt yields under pressure.
      • Cross: DXY strength cap / US-UK 10Y divergence.
      • Levels: Support 1.3400 / Resistance 1.3480.
    • USD/JPY:
      • Direction: Bullish, but watch intervention.
      • Domestic (JP): BoJ cautious / Ueda verbal intervention / JGB constrained.
      • Cross: US 10Y supportive / risk-on flow offset by intervention threat.
      • Levels: Support 159.00 / Resistance 159.50.
    • USD/CAD (Loonie):
      • Direction: Bullish.
      • Domestic (CA): BoC dovish / CAD vulnerable to oil rout.
      • Cross: DXY strength / US-CA 10Y supportive.
      • Levels: Support 1.3800 / Resistance 1.3850.
    • AUD/USD (Aussie):
      • Direction: Bearish.
      • Domestic (AU): Weak CPI raises RBA pause risk.
      • Cross: DXY strength / US-AU 10Y negative spread / China uncertainty.
      • Levels: Support 0.7100 / Resistance 0.7180.
    • NZD/USD (Kiwi):
      • Direction: Bullish.
      • Domestic (NZ): RBNZ hawkish signal / OCR supports.
      • Cross: DXY strength offset by domestic policy tailwind.
      • Levels: Support 0.5850 / Resistance 0.5920.
    • USD/CHF (Swissy):
      • Direction: Bullish.
      • Domestic (CH): No fresh domestic catalyst — sensitive to US response.
      • Cross: DXY strength / safe-haven fading.
      • Levels: Support 0.7820 / Resistance 0.7880.
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): Mixed.
      • Domestic: Relative BoE/ECB/BoJ stance driving flows.
      • Cross: DXY chop / risk sentiment mixed.
      • Levels: Monitor individual charts for key levels.
    • XAU (Gold):
      • Direction: Bearish.
      • Domestic (asset-specific): Rising real yields hurt gold / CB demand slows.
      • Cross: DXY strength / reduced safe-haven bid.
      • Levels: Support 4450 / Resistance 4500.
    • XAG (Silver):
      • Direction: Bearish.
      • Domestic (asset-specific): Industrial demand concerns / Gold underperformance.
      • Cross: DXY strength / risk aversion fading.
      • Levels: Support 7350 / Resistance 7500.
    • WTI / Brent:
      • Direction: Bearish.
      • Domestic (asset-specific): Strait of Hormuz progress weighs / EIA build risk.
      • Cross: DXY strength headwind / global growth worries.
      • Levels: WTI Support $87.50 / Resistance $90.00.
    • Copper:
      • Direction: Bearish.
      • Domestic (asset-specific): China growth concerns / LME inventories rise.
      • Cross: DXY impact / global growth proxy weakens.
      • Levels: Support 630 / Resistance 640.
    • SPX:
      • Direction: Sideways.
      • Domestic (US): Earnings season tapering / Fed watch / yield sensitivity.
      • Cross: VIX stable / global growth concerns offsetting.
      • Levels: Futures support 7530 / resistance 7570.
    • NDX:
      • Direction: Sideways.
      • Domestic (US): Mega-cap results mixed / real yield pressure building.
      • Cross: Higher rates sensitivity / VIX benign.
      • Levels: Support 30000 / Resistance 30400.
    • US30 (Dow):
      • Direction: Sideways.
      • Domestic (US): Cyclical earnings mixed / bond yields a factor.
      • Cross: Sentiment dependent on yields / relative valuation.
      • Levels: Support 50500 / Resistance 50800.
    • UK100 (FTSE):
      • Direction: Bullish.
      • Domestic (UK): Sterling weakness helps / commodity strength supports.
      • Cross: Global risk on / US data impact.
      • Levels: Support 23300 / Resistance 23550.
    • DAX:
      • Direction: Neutral.
      • Domestic (DE): No fresh domestic catalyst — sensitive to US response.
      • Cross: US tech influence / DXY impact / risk tone.
      • Levels: Support 25200 / Resistance 25400.
    • Nikkei:
      • Direction: Bearish.
      • Domestic (JP): JPY intervention risk / profit-taking after rally.
      • Cross: US tech / risk off.
      • Levels: Support 64500 / Resistance 65500.
    • BTC:
      • Direction: Sideways.
      • Domestic (asset-specific): ETF flows slowing / funding rates elevated.
      • Cross: DXY impact / risk correlated.
      • Levels: Support $75000 / Resistance $76000.

    Positioning watch: CFTC data shows crowded short positions in GBP and JPY, suggesting squeeze risk if data surprises positively. AUD and Copper are crowded longs, vulnerable to disappointment.

    The pain trade: A strong US data print today, particularly on inflation, would force a repricing of Fed expectations, hammering bonds and risk assets as the DXY surges.

  • Gold Slides as Real Yields Steady, Mideast Tensions Ease – Wednesday, 27 May

    Where we are: Gold (COMEX) is currently trading at 4476.0, down 1.46% on the day, and below the overnight range of 4454.6-4560.1. The current price is well below yesterday’s New York close, reflecting the ongoing pressure. The metal seems to be struggling to find a foothold amid a confluence of factors.

    What’s driving it: The primary driver appears to be the stability in US real yields, currently at 2.16%, following recent declines that had supported gold. Breakeven inflation remaining steady at 2.4% is also providing limited upside catalyst for the metal, especially as risk appetite has returned. This has been further compounded by perceived easing of geopolitical tensions in the Middle East, as gold’s safe-haven appeal diminishes.

    • Federal Reserve minutes from the discount rate meeting on April 20 and 29 revealed no immediate concerns over inflation or economic slowdown, reducing bets on near-term rate cuts and diminishing gold’s appeal as an inflation hedge.
    • Net non-commercial positioning in gold remains modestly long, at +159,833 contracts, and is at only the 6th percentile, suggesting there is room for further long liquidation.
    • Goldman Sachs raised its S&P 500 target to 8,000, signaling confidence in risk assets and further diminishing the relative attractiveness of gold.

    NY session focus: Watch the 08:30 ET data releases carefully; any surprises in core inflation or jobless claims could reignite volatility in real yields and provide a short-term directional catalyst. Key levels to watch are 4450 as immediate support and 4500 as resistance. The trade that’s working right now is fading rallies as the market continues to price in diminished geopolitical risk and stable real yields. The major risk is a sharp deterioration in the Middle East situation, reigniting safe-haven demand. The pain trade for Gold is a sharp rally in US equities.

  • Oil Plummets as Supply Fears Ease – Wednesday, 27 May

    Snapshot: WTI Crude is down 5.14% to $88.69, driven by reports of progress in restoring shipping through the Strait of Hormuz. The Fed’s April discount rate meeting minutes are a secondary factor, suggesting continued vigilance on inflation. No major US data before the NY open.

    • Watch for further confirmation of Hormuz Strait traffic; breach of $87.80 (day low) signals further downside.
    • Risk: Secretary Rubio warns that any peace agreement could still take several days to complete.

    Bias into NY: Bearish. Easing supply concerns are likely to pressure US Oil further, targeting a break of the $87.80 intraday low, with the DXY hovering near 99.00 offering little support.

  • North Sea Crude Collapses on Iran Deal Hopes – Wednesday, 27 May

    Snapshot: Brent is trading at 92.52, down 4.03% after Iranian state television signaled a commitment to restoring shipping through the Strait of Hormuz. The potential for increased supply and eased geopolitical tensions is weighing heavily on prices. No major US data releases before the NY open.

    • Breaching the 92.00 level could trigger further downside, targeting the 90.00 handle.
    • Focus will be on any official confirmation from the US side regarding the Iran deal, which could amplify the current move.

    Bias into NY: Bearish, with a break below 92.00 likely as the market prices in the prospect of increased Iranian oil supply and easing of geopolitical risk. DXY strength is a secondary headwind near term.

  • NY Session Tactical Brief – Tuesday, 26 May

    Regime: Risk-off as higher real yields trigger broad USD strength, with VIX hovering at 16.76 and US 10Y at 4.486%.

    Today’s market themes:

    • Real-rate repricing: Rising US real yields exert downward pressure on risk assets and commodity prices, favoring USD strength.
    • AUD CPI impact: Australian inflation data sets the tone for RBA policy expectations, with potential for a squeeze on crowded AUD longs.
    • RBNZ decision: RBNZ decision and monetary policy statement in focus.

    The setup: US real yields continue their ascent, tightening financial conditions and prompting a broad risk-off move. The crowded AUD long is vulnerable to downside surprise from CPI, and traders will be watching the RBNZ closely. Look for opportunities to fade rallies in risk assets. Support for S&P futures at 7525.

    Watch list (native time per event):

    • 10:00 ET USD: CB Consumer Confidence (forecast 91.9, prior 92.8)
    • 11:30 AEST AUD: CPI y/y (forecast 4.4%, prior 4.6%)
    • 14:00 NZT NZD: RBNZ Official Cash Rate (forecast 2.25%, prior 2.25%)

    Bias by asset:

    • DXY:
      • Direction: Bullish.
      • Domestic (US): Fed hawkish tone / resilient US data / rising US yields
      • Cross: Global risk aversion / EUR weakness / safe-haven demand
      • Levels: Resistance 99.11, support 98.95
    • EUR/USD:
      • Direction: Bearish.
      • Domestic (EU): ECB dovishness / weak HICP / widening sovereign spreads
      • Cross: Strong DXY / widening US-DE 10Y spread / risk-off flows
      • Levels: Resistance 1.1645, support 1.1624
    • GBP/USD (Cable):
      • Direction: Bearish.
      • Domestic (UK): BoE caution / soft services CPI / underperforming Gilts
      • Cross: Strong DXY / widening US-UK 10Y spread / risk aversion
      • Levels: Resistance 1.3505, support 1.3465
    • USD/JPY:
      • Direction: Bullish.
      • Domestic (JP): BoJ ultra-dovish / no wage growth / intervention rhetoric
      • Cross: Rising US 10Y / DXY strength / risk-on supports carry
      • Levels: Resistance 159.24, support 158.90
    • USD/CAD (Loonie):
      • Direction: Bullish.
      • Domestic (CA): BoC cautious / sluggish CPI / softer WTI correlation
      • Cross: Strong DXY / widening US-CA 10Y spread
      • Levels: Resistance 1.3821, support 1.3799
    • AUD/USD (Aussie):
      • Direction: Bearish.
      • Domestic (AU): CPI miss / weaker Iron-Ore, Copper
      • Cross: Strong DXY / US-AU 10Y widening / China slowdown fears
      • Levels: Resistance 0.7176, support 0.7156
    • NZD/USD (Kiwi):
      • Direction: Bearish.
      • Domestic (NZ): RBNZ dovishness / weak dairy prices
      • Cross: Strong DXY / risk-off / US-NZ 10Y divergence
      • Levels: Resistance 0.5872, support 0.5840
    • USD/CHF (Swissy):
      • Direction: Bullish.
      • Domestic (CH): SNB active easing / low CPI / Swiss yields repressed
      • Cross: DXY strength / unwinding safe-haven positions
      • Levels: Resistance 0.7855, support 0.7827
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP Bullish, EUR/JPY Bullish, GBP/JPY Bearish
      • Domestic: Relative central bank stance / relative yields
      • Cross: DXY influence / risk appetite dynamics
      • Levels: Use individual daily ranges to guide
    • XAU (Gold):
      • Direction: Bearish.
      • Domestic (asset-specific): Rising real yields / declining breakevens / soft CB demand
      • Cross: Strong DXY / risk-off dampening safe-haven bid
      • Levels: Resistance 4615.2, support 4534.4
    • XAG (Silver):
      • Direction: Bearish.
      • Domestic (asset-specific): Weaker industrial demand / rising Gold-Silver ratio
      • Cross: Strong DXY / Risk-off flows
      • Levels: Resistance 7870.300, support 7576.000
    • WTI / Brent:
      • Direction: Bullish.
      • Domestic (asset-specific): Geopolitical tensions / OPEC policy / tight supply
      • Cross: DXY pullback/ risk-on flows
      • Levels: Brent resistance 97.07, WTI support 90.37
    • Copper:
      • Direction: Bearish.
      • Domestic (asset-specific): China growth concerns / rising LME stocks
      • Cross: DXY strength / risk-off sentiment
      • Levels: Resistance 646.9700, support 636.3200
    • SPX:
      • Direction: Bearish.
      • Domestic (US): High valuations / Fed hawkish / rising US yields
      • Cross: Elevated VIX / global growth concerns
      • Levels: S&P 500 futures resistance 7565, cash support 7463
    • NDX:
      • Direction: Bearish.
      • Domestic (US): Mega-cap earnings risk / elevated real yields / AI hype fade
      • Cross: Higher rates sensitivity / VIX volatility
      • Levels: Resistance 29972.25, support 29745.50
    • US30 (Dow):
      • Direction: Bearish.
      • Domestic (US): Cyclical slowdown / rising rates hurting industrials
      • Cross: Bond yield upside
      • Levels: Resistance 51132, support 50865
    • UK100 (FTSE):
      • Direction: Neutral.
      • Domestic (UK): No fresh domestic catalyst — sensitive to US response
      • Cross: Global risk sentiment
      • Levels: Resistance 23419, support 23169
    • DAX:
      • Direction: Bearish.
      • Domestic (DE): EU political uncertainty
      • Cross: US tech weakness / strong DXY / rising rates
      • Levels: Resistance 25360, support 25181
    • Nikkei:
      • Direction: Bearish.
      • Domestic (JP): No fresh domestic catalyst — sensitive to US response
      • Cross: US tech volatility / risk-off sentiment
      • Levels: Resistance 65309, support 64616
    • BTC:
      • Direction: Bearish.
      • Domestic (asset-specific): Funding rates too high / ETF selling / on-chain
      • Cross: DXY strength / risk-off / Nasdaq correlation
      • Levels: Resistance 77521, support 76415

    Positioning watch: CFTC data reveals crowded longs in AUD and Copper (>96th percentile) making them vulnerable to negative data surprises. There’s crowded short exposure in GBP, JPY, and Nasdaq.

    The pain trade: A dovish RBNZ or a surprise CPI beat from Australia igniting a short squeeze in AUD, JPY, and GBP while simultaneously reversing the USD rally.

  • Gold Under Pressure as Real Yields Climb – Tuesday, 26 May

    Where we are: Gold (COMEX) is currently trading at 4556.5, down -48.9 or -1.06% intraday, after a choppy overnight session spanning 4534.4-4615.2. The move lower accelerates the pullback from recent highs, and places Gold well below Friday’s NY close.

    What’s driving it: The primary headwind for gold continues to be the rise in US real yields. 10-year TIPS yields climbed 5bp as of Friday, reaching 2.18%, and the trend remains upward, diminishing gold’s appeal as a store of value. While breakeven inflation expectations are also slightly higher, up 1bp to 2.4% as of Friday, the real yield rise is dominating the narrative. Renewed US-Iran tensions are clouding the interest rate outlook according to some wires, but so far any geopolitical safety bid is being overwhelmed by the macro picture. The modest net-long positioning in gold (42.1% of OI) suggests limited squeeze potential to the upside.

    • US 10Y Real Yields at 2.18% and trending higher.
    • Net non-commercial positioning in gold sits at the 6th percentile, suggesting scope for further downside.
    • The DXY is firmer at 99.05, applying additional pressure.

    NY session focus: The key event for the US session will be the 10:00 ET release of CB Consumer Confidence (forecast 91.9, previous 92.8). Stronger data could fuel further upside in real yields and pressure gold lower, while a miss could provide a temporary reprieve. Key levels to watch are the overnight low of 4534.4 as initial support, and then 4500 as a major psychological level. On the upside, 4600 now acts as immediate resistance. The current trade is short gold against rising real yields. The pain trade is a surprise dovish signal from the Fed and a sharp reversal in US yields, triggering a short squeeze in Gold.

  • WTI Crude Bounces as Focus Shifts to Demand – Tuesday, 26 May

    Snapshot: WTI crude is trading at $92.54, up 1.67%, rebounding from recent lows. The move higher is predicated on dip-buying and a reassessment of the demand outlook, but the relatively high speculator positioning creates risk into any move lower. Eyes now turn to the 10:00 ET CB Consumer Confidence release.

    • Watch for a break above the day’s high of $93.60, which could signal further upside momentum.
    • Geopolitical tensions in the Middle East, specifically regarding US-Iran relations and potential disruptions to oil supply, remain a key risk and potential volatility driver.

    Bias into NY: Bullish above $93.00, with the caveat that speculator positioning is extended, any miss of the consumer confidence print could easily send this back below $92.00 if traders start to bail on long positions.

  • Brent Crude Climbs on Geopolitical Risk Premium – Tuesday, 26 May

    Snapshot: Brent is trading at $95.89, up $1.43, propelled higher by renewed military operations in southern Iran and rising geopolitical tensions. Today’s focus shifts to the 10:00 ET US Consumer Confidence release, which may temper gains if it prints stronger than expected.

    • A break above the intraday high of $97.07 would signal further upside, targeting $98.50.
    • Heightened tensions between the US and Iran remain a key risk, potentially leading to further supply disruptions and price volatility.

    Bias into NY: Bullish on Brent, looking for a test of $97.07, as escalating regional conflict outweighs concerns about demand; softer US yields are providing additional tailwinds.

  • NY Session Tactical Brief – Monday, 25 May

    Regime: Risk-on, supported by falling VIX (16.76) and slightly rising 10Y breakevens (2.4%) despite higher real yields (2.18%).

    Today’s market themes:

    • Oil supply disruption continues as India seeks alternative sources amidst Hormuz Strait tensions.
    • USD strength muted despite higher US real yields, signaling risk appetite.
    • Crowded positioning presents squeeze potential in GBP, JPY, Copper, and Nasdaq.

    The setup: Oil-sensitive assets are reacting to headlines regarding supply disruptions, while broader market risk sentiment remains positive, weighing on the USD. Crowded shorts in JPY and GBP against a backdrop of muted dollar strength create a setup for potential squeeze. Watch US 10Y yield reaction for risk confirmation.

    Watch list (native time per event):

    • 08:30 ET US Durable Goods Orders (forecast vs prior)
    • 10:00 ET US New Home Sales (forecast vs prior)
    • 11:00 ET US Dallas Fed Manufacturing Index (forecast vs prior)

    Bias by asset:

    • DXY:
      • Direction: Neutral
      • Domestic (US): Fed rhetoric on inflation / US data resilience / rising real yields
      • Cross: Global risk appetite / JPY and GBP strength potential
      • Levels: Support 118.80, Resistance 119.50
    • EUR/USD:
      • Direction: Neutral
      • Domestic (EU): ECB caution / Eurozone inflation watch / German yields
      • Cross: DXY weakness / US-DE 10Y narrowing / risk-on flow
      • Levels: Support 1.1620, Resistance 1.1670
    • GBP/USD (Cable):
      • Direction: Bullish
      • Domestic (UK): BoE on hold / softer inflation / Gilt yield stability
      • Cross: DXY weakness / US-UK 10Y narrowing / risk appetite
      • Levels: Support 1.2680, Resistance 1.2750
    • USD/JPY:
      • Direction: Bearish
      • Domestic (JP): BoJ inaction / wage pressure / intervention threat
      • Cross: US 10Y flattening / DXY weakness / risk-on stability
      • Levels: Support 156.50, Resistance 157.50
    • USD/CAD (Loonie):
      • Direction: Neutral
      • Domestic (CA): BoC on hold / CPI watch / WTI correlation
      • Cross: DXY strength / US-CA 10Y widening
      • Levels: Support 1.3780, Resistance 1.3850
    • AUD/USD (Aussie):
      • Direction: Neutral
      • Domestic (AU): RBA on hold / commodity prices / cautious tone
      • Cross: DXY weakness / US-AU 10Y narrowing / China watch
      • Levels: Support 0.7070, Resistance 0.7130
    • NZD/USD (Kiwi):
      • Direction: Neutral
      • Domestic (NZ): RBNZ easing priced in / Dairy prices / subdued tone
      • Cross: DXY weakness / US-NZ 10Y narrowing / risk appetite
      • Levels: Support 0.6400, Resistance 0.6450
    • USD/CHF (Swissy):
      • Direction: Neutral
      • Domestic (CH): SNB watching / CPI stable / neutral stance
      • Cross: DXY strength / safe-haven flows / risk sentiment
      • Levels: Support 0.7770, Resistance 0.7830
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP: Neutral; EUR/JPY: Bearish; GBP/JPY: Bullish
      • Domestic: Relative ECB-BoE, ECB-BoJ, BoE-BoJ policy and yields drive crosses.
      • Cross: DXY influence / overall risk sentiment / correlation dynamics
      • Levels: Monitor respective supports/resistances closely on cross charts
    • XAU (Gold):
      • Direction: Bullish
      • Domestic (asset-specific): Real yields stabilizing / Breakevens rising / Safe haven demand
      • Cross: DXY weakness / risk appetite
      • Levels: Support $4540, Resistance $4570
    • XAG (Silver):
      • Direction: Neutral
      • Domestic (asset-specific): Industrial demand / Gold-Silver ratio watch
      • Cross: DXY weakness / risk appetite
      • Levels: Support $TBD, Resistance $TBD
    • WTI / Brent:
      • Direction: Bullish
      • Domestic (asset-specific): EIA Inventory impact / OPEC / geopolitical premium
      • Cross: DXY strength / risk aversion from supply shock
      • Levels: Support WTI $110.50, Resistance WTI $113.50
    • Copper:
      • Direction: Neutral
      • Domestic (asset-specific): China stimulus / inventories low / supply concerns
      • Cross: Global growth proxy / DXY strength
      • Levels: Support TBD, Resistance TBD
    • SPX:
      • Direction: Neutral
      • Domestic (US): Earnings season / Fed watching / US yields stable
      • Cross: VIX regime / global backdrop
      • Levels: Futures support 5290, resistance 5320
    • NDX:
      • Direction: Neutral
      • Domestic (US): Mega-cap performance / real yields / AI momentum
      • Cross: Rates sensitivity / VIX stability
      • Levels: Support TBD, Resistance TBD
    • US30 (Dow):
      • Direction: Neutral
      • Domestic (US): Industrial earnings / cyclical sentiment
      • Cross: Bond yield reaction
      • Levels: Support TBD, Resistance TBD
    • UK100 (FTSE):
      • Direction: Neutral
      • Domestic (UK): Sterling influence / Gilt yields / commodity mix
      • Cross: Global risk / US tone
      • Levels: Support TBD, Resistance TBD
    • DAX:
      • Direction: Neutral
      • Domestic (DE): Bund yields / IFO watch / EU sentiment
      • Cross: US tech influence / DXY direction / risk tone
      • Levels: Support TBD, Resistance TBD
    • Nikkei:
      • Direction: Neutral
      • Domestic (JP): JPY level / JGB yields / BoJ anticipation
      • Cross: US tech / risk regime
      • Levels: Support TBD, Resistance TBD
    • BTC:
      • Direction: Neutral
      • Domestic (asset-specific): Funding rate / ETF flow / on-chain signals
      • Cross: DXY / risk regime / Nasdaq correlation
      • Levels: Support TBD, Resistance TBD

    Positioning watch: Crowded shorts exist in JPY (4th percentile) and GBP (15th percentile), while crowded longs are in AUD (98th percentile), Copper (96th percentile), and Bitcoin (90th percentile). A positive surprise in UK or Japanese data could trigger a short squeeze in their respective currencies, while disappointment in China data could hurt AUD and Copper.

    The pain trade: A sustained break above 157.50 in USD/JPY, fueled by hawkish Fed commentary, would squeeze crowded JPY shorts and trigger broader risk-off flows.

  • Gold Rebounds Above $4,550, Testing Key Resistance – Monday, 25 May

    Where we are: Spot gold is currently trading around $4,559, recovering from last week’s losses. Bullion is pushing higher after a risk-on overnight session, spurred by increasing optimism over a potential US-Iran deal. This level places it above Friday’s New York close, and within striking distance of the $4,600 mark.

    What’s driving it: Rising US real yields continue to act as a headwind for gold, with the 10-year TIPS yield at 2.18%, up 5bp from last week. However, the prospect of easing geopolitical tensions, particularly a potential US-Iran deal, is providing a countervailing force. A weaker dollar, spurred by hopes for a deal that could see Iranian oil returning to markets, adds to the upward pressure on gold.

    • US 10Y real yields continue to climb, putting downward pressure on bullion.
    • Goldman Sachs flagging that hedge fund tech positions are near record highs suggests risk appetite is high, and provides some support to gold.
    • Net non-commercial gold positioning remains moderately long at +159,833 contracts, near the 6th percentile, suggesting there is room for longs to add to their positions.

    NY session focus: The main focus for the New York session will be the market’s reaction to further news on the potential US-Iran deal. Traders will be watching for any clarifications from the White House after President Trump’s comments about the US blockade of the Strait of Hormuz. Key levels to watch are $4,600 as resistance and $4,500 as support. The trade that’s working is buying dips on dollar weakness, but the trade that’s at risk is shorting US yields. The pain trade for gold is a hawkish surprise out of the Fed or a breakdown in US-Iran negotiations. Expect quiet price action until the 08:30 ET data.

  • WTI Crude Faces Geopolitical Headwinds – Monday, 25 May

    Snapshot: WTI Crude currently trades near $112.25, still elevated given ongoing geopolitical tensions. While there has been no fresh domestic catalyst, the recent easing of tensions in the Strait of Hormuz may present some headwinds to the commodity.

    • Watch for any further signals that the US and Iran are nearing a deal as this would put pressure on WTI.
    • The moderately long positioning in oil increases the risk of a correction if sentiment sours.

    Bias into NY: We see downside risk for WTI as the market prices in a potential resolution in the Strait of Hormuz; a break below $110 would signal further weakness. The rising US 10Y real yield (+5.0bp) also acts as a headwind.

  • Brent Crude Plunges on Iran Deal Hopes – Monday, 25 May

    Snapshot: Brent Crude futures are trading sharply lower, extending overnight losses, currently near $98/bbl. The primary driver is growing optimism surrounding a potential US-Iran peace deal, raising the prospect of increased oil supply and easing geopolitical tensions in the Strait of Hormuz.

    • Watch for a break below $97/bbl, opening the door to further downside.
    • Focus on official commentary from US and Iranian officials, as conflicting signals could trigger volatility.

    Bias into NY: Bearish. Continued positive headlines regarding the Iran deal are likely to weigh on Brent Crude, potentially pushing the price towards $95/bbl. A strengthening USD, with the broad index at 119.28, adds further pressure.

  • NY Session Tactical Brief – Friday, 22 May

    Regime: Mixed — VIX steady at 17.44 despite higher oil and Dow futures, indicating risk appetite remains selective and rate-sensitive.

    Today’s market themes:

    • USD Strength: DXY supported by relatively hawkish Fed pricing.
    • Oil Volatility: Geopolitical tensions and inventory concerns drive swings.
    • Data Dependence: Retail sales releases in GBP and CAD in focus.

    The setup: USD strength continues, fueled by hawkish Fed bets as US yields remain elevated. Traders eye the 1.1600 level on EUR/USD; a break could trigger further downside. Focus remains on incoming data and any further escalation of geopolitical tensions in the Middle East.

    Watch list (native time per event):

    • 07:00 BST GBP: Retail Sales m/m (forecast -0.6%, prior 0.7%)
    • 08:30 ET CAD: Retail Sales m/m (forecast 0.6%, prior 0.7%)
    • 10:00 ET USD: Revised UoM Consumer Sentiment (forecast 48.2, prior 48.2)

    Bias by asset:

    STRICT SILO RULE: For every non-USD asset, the Domestic line MUST contain only domestic content (home central bank / domestic data / domestic yield / domestic political-fiscal driver). USD, DXY, Fed, US yields, and risk regime go in the Cross line — never in Domestic. If no fresh domestic catalyst exists, write “No fresh domestic catalyst — sensitive to US response” in Domestic. For commodities, Domestic = real-yields / supply / inventories / flows. For BTC, Domestic = funding / ETF flow / on-chain.

    • DXY:
      • Direction: Neutral
      • Domestic (US): Fed pricing stable / economic resilience
      • Cross: Global growth worries / safe-haven bids on tension
      • Levels: Support 99.00 / Resistance 99.50
    • EUR/USD:
      • Direction: Bearish
      • Domestic (EU): No fresh domestic catalyst — sensitive to US response
      • Cross: DXY strength / rate divergence / risk-off flows
      • Levels: Support 1.1600 / Resistance 1.1650
    • GBP/USD (Cable):
      • Direction: Neutral
      • Domestic (UK): Disappointing retail sales weigh on GBP
      • Cross: DXY strength / US-UK yield spreads / risk sentiment
      • Levels: Support 1.3380 / Resistance 1.3450
    • USD/JPY:
      • Direction: Bullish
      • Domestic (JP): Intervention risk high / BoJ dovish
      • Cross: US yields / risk-on / DXY strength
      • Levels: Support 158.50 / Resistance 159.50
    • USD/CAD (Loonie):
      • Direction: Bullish
      • Domestic (CA): No fresh domestic catalyst — sensitive to US response
      • Cross: DXY strength / WTI volatility / US-CA spread
      • Levels: Support 1.3600 / Resistance 1.3700
    • AUD/USD (Aussie):
      • Direction: Bearish
      • Domestic (AU): Surprise unemployment rise weighs on Aussie
      • Cross: DXY strength / China growth / commodity prices
      • Levels: Support 0.6600 / Resistance 0.6650
    • NZD/USD (Kiwi):
      • Direction: Bearish
      • Domestic (NZ): No fresh domestic catalyst — sensitive to US response
      • Cross: DXY strength / risk aversion / US-NZ yield spreads
      • Levels: Support 0.5850 / Resistance 0.5900
    • USD/CHF (Swissy):
      • Direction: Bullish
      • Domestic (CH): No fresh domestic catalyst — sensitive to US response
      • Cross: DXY strength / safe-haven demand eases
      • Levels: Support 0.7800 / Resistance 0.7900
    • EUR/GBP, EUR/JPY, GBP/JPY:
      • Direction (per cross): EUR/GBP neutral, EUR/JPY bullish, GBP/JPY bearish
      • Domestic: BoE vs ECB / BoJ, relative yield spreads / economic data
      • Cross: DXY / risk aversion / cross-of-crosses dynamic
      • Levels: Monitor for breakout patterns
    • XAU (Gold):
      • Direction: Bullish
      • Domestic (asset-specific): Real yields down / safe-haven bids
      • Cross: DXY weaker / risk aversion
      • Levels: Support $4500 / Resistance $4550
    • XAG (Silver):
      • Direction: Neutral
      • Domestic (asset-specific): Industrial demand / Gold-Silver ratio
      • Cross: DXY / risk appetite
      • Levels: Support $29.50 / Resistance $30.00
    • WTI / Brent:
      • Direction: Bullish
      • Domestic (asset-specific): Refinery attack / supply concerns
      • Cross: DXY / risk appetite
      • Levels: Support $108 / Resistance $115
    • Copper:
      • Direction: Neutral
      • Domestic (asset-specific): China stimulus hope/ LME stocks
      • Cross: DXY / global growth
      • Levels: Support $5.00 / Resistance $5.10
    • SPX:
      • Direction: Bullish
      • Domestic (US): Better earnings / Rate cut expectations
      • Cross: Steady VIX / Global sentiment
      • Levels: Futures support 5280 / Resistance 5320
    • NDX:
      • Direction: Bullish
      • Domestic (US): Mega-cap tech / Yield sensitivities
      • Cross: rates sensitivity / VIX
      • Levels: Support 19700 / Resistance 19900
    • US30 (Dow):
      • Direction: Bullish
      • Domestic (US): Industrial activity / Positive earnings
      • Cross: Bond yield reaction
      • Levels: Support 39500 / Resistance 40000
    • UK100 (FTSE):
      • Direction: Neutral
      • Domestic (UK): Weak pound / commodity-heavy mix
      • Cross: global risk / US tone
      • Levels: Support 10400 / Resistance 10500
    • DAX:
      • Direction: Bullish
      • Domestic (DE): Bund yields stable / EU confidence
      • Cross: US tech/ DXY / risk-on
      • Levels: Support 24700 / Resistance 24900
    • Nikkei:
      • Direction: Bullish
      • Domestic (JP): JPY weakness / BoJ policy
      • Cross: US Tech / risk sentiment
      • Levels: Support 63000 / Resistance 63500
    • BTC:
      • Direction: Neutral
      • Domestic (asset-specific): ETF inflows / funding rates
      • Cross: DXY / risk regime / Nasdaq correlation
      • Levels: Support $67500 / Resistance $68500

    Positioning watch: AUD and Copper are crowded long (>98th percentile), leaving them vulnerable to a squeeze lower on weaker China data or disappointing earnings. Nasdaq is crowded short (<0th percentile) and ripe for a rally if yields soften further.

    The pain trade: A sharp rally in the Nasdaq fueled by falling real yields would squeeze crowded shorts and force further buying, pushing indices higher.

  • Gold Bulls Eye $4,600 as Real Yields Plunge – Friday, 22 May

    Where we are: Gold is currently trading around $4,520, consolidating gains after a choppy overnight session. Bullion found support near $4,490, holding above the prior NY close of $4,515, and is testing resistance near the $4,530 level as Europe unwinds.

    What’s driving it: The primary driver for gold remains the continued slide in US real yields. The 10-year TIPS yield has fallen another 5 basis points to 2.13%, providing a significant tailwind for bullion. While oil-driven inflation fears might ordinarily bolster rate-hike bets and weigh on gold, breakeven inflation also fell 5bp yesterday, leaving the real rate the dominant driver today. The modestly long speculative positioning in gold, though not at an extreme, offers some room for further upside should real yields continue their descent.

    • US 10Y Real Yields falling 5bp provides a strong incentive to bid gold.
    • Falling Breakeven Inflation neuters the oil-inflation fear rate-hike narrative.
    • Net non-commercial positioning is only at the 29th percentile suggesting more room to build long positions.

    NY session focus: The 10:00 ET release of the Revised UoM Consumer Sentiment data will be the key event to watch in the NY session. A significantly weaker-than-expected print could further pressure real yields and send gold toward the $4,600 level. Conversely, a strong reading could trigger a retracement back towards $4,500. The trade to watch is the ongoing real-yield sensitivity. The pain trade here is a sudden reversal in oil prices, reigniting inflation fears and triggering a sharp rise in nominal yields, leaving gold exposed.

  • US Crude Faces Profit-Taking Pressure – Friday, 22 May

    Snapshot: WTI crude is trading softer after yesterday’s rally, pressured by renewed hopes of a US-Iran agreement which could ease supply concerns. Focus shifts to the 10:00 ET Revised UoM Consumer Sentiment release, which could influence risk appetite.

    • Watch for a break below $95.00 which would open a retest of weekly lows.
    • Risk: Any headlines suggesting a breakdown in US-Iran talks could provide support, though positioning does not show extreme short interest.

    Bias into NY: Bearish. Expect continued profit-taking in US Crude, with the dollar strength weighing and optimism around US-Iran talks persisting, targeting a move towards $94.50.