COT Reports Analysis
AUD – WEAK (5/5)
GBP – STRONG (5/5)
CAD – WEAK (3/5)
EUR – STRONG (5/5)
JPY – STRONG (2/5)
CHF – WEAK (3/5)
USD – MIXED
NZD – WEAK (3/5)
GOLD – STRONG (4/5)
SILVER – STRONG (5/5)
Market Overview
The fog of war has descended once more on the Middle East. Within mere hours of President Trump’s ceasefire announcement, Israel unleashed another unprecedented airstrike campaign on Iran. This whipsaw in geopolitical news has not only reignited fears of a broader conflict but also dismantled the market’s fragile optimism.
Oil prices, which had sharply dropped after the peace signal, rebounded wildly as uncertainty escalated. WTI crude fell to as low as $63.90/bbl before bouncing back into the $70+ range, proving just how tightly correlated these markets are. Such volatility underscores the relevance of intermarket currency correlation, as currencies, commodities, and risk sentiment are now inextricably linked. Traders are watching not just one chart—but how they all move together.
This escalating conflict is also influencing domestic U.S. sentiment. President Trump is facing backlash over military decisions and labor shortages resulting from his deportation policies. Meanwhile, AI leaders like Shyam Sankar (Palantir) and Andrew Bosworth (Meta) are now military officers, marking a strange but real fusion of commercial AI and military strategy. These developments are altering the risk landscape and shifting the weight of market momentum.
Market Analysis
GOLD
Gold is recovering from a recent dip, climbing back toward the EMA200. The earlier short-term bearish break seems to have been a trap amid escalating war fears. While price action has turned cautious, this tension-fueled environment favors further buying. Based on intermarket currency correlation, surging oil prices and geopolitical instability signal renewed demand for Gold. Watch for upside continuation.
SILVER
Silver remains stuck in a tight range but shows resilience. The MACD suggests bullish momentum could resume soon. Given the strong intermarket correlation with Gold, any strong movement in Gold could catalyze a breakout in Silver. For now, we expect continued consolidation with upside potential.
DXY (US Dollar Index)
The Dollar is teetering. A prior bearish setup resumed after Trump’s ceasefire post—but Israel’s new offensive brought back some safe-haven demand. The MACD still trends bearish, with RSI near overbought. Given intermarket currency correlation, any prolonged risk-aversion will benefit USD—but structural weakness remains. The 97.932 support is key.
GBPUSD
The Pound is strengthening but remains range-bound. It hasn’t broken prior highs, suggesting a lack of conviction. Still, the MACD and RSI signal bullish momentum. If DXY weakens again, GBPUSD could break out. The pair also reflects the cross-asset correlation between European sentiment and risk-on flows.
AUDUSD
AUD bounced past the EMA200 but stalled. With the Aussie being a risk-sensitive currency, it mirrors shifts in commodities like Oil and Metals. If the intermarket signals from rising Oil and equity optimism continue, AUDUSD could rally—but we’re not calling it yet. MACD shows strong buying volume; RSI is bullish.
NZDUSD
The Kiwi mimics the Aussie’s path—strong bounce, now consolidating. Both MACD and RSI reflect buying pressure. Given the correlated structure between risk-on sentiment and commodity currencies, NZDUSD could rise further—but caution is warranted until a clear breakout.
EURUSD
EUR is testing 1.16110 with bullish MACD support. The RSI suggests growing strength. Strong German PMIs support bullish expectations. The Euro’s upward movement aligns with intermarket signals pointing to a weakening Dollar and improving European data. Watch for a clean breakout above 1.16110.
USDJPY
The Yen has regained some strength amid renewed Middle East tensions. USDJPY dipped under the EMA200, and MACD/RSI show bearish momentum. Given its safe-haven status, intermarket correlations between risk appetite and USDJPY’s direction remain key. Consolidation likely until geopolitical direction clarifies.
USDCHF
The Franc surged against the Dollar, as we expected. With both currencies serving as havens, the correlation between USDCHF and global risk sentiment grows more complex. MACD and RSI favor continued downside. If U.S. sentiment worsens, expect further CHF strength.
USDCAD
USD/CAD is rising despite general USD weakness. Oil prices remain volatile, which normally correlates inversely with USD/CAD. Yet, the pair holds its bullish structure, supported by MACD and RSI. If Canadian CPI disappoints, it could further widen the divergence. Intermarket correlation suggests caution here—this pair is at odds with traditional patterns.
Final Thoughts
From safe havens to commodities to currencies, every asset now moves in sync—or conflict—with others. The escalating Middle East chaos has amplified intermarket currency correlation, turning every data point and headline into a market-moving event.
Understanding how oil prices influence CAD, how conflict boosts Gold and the Dollar, and how equity risk impacts the Aussie and Kiwi is no longer optional—it’s essential. As the world watches whether Trump can prevent all-out war or plunge deeper into chaos, traders should be laser-focused on these correlations to gain an edge. Visit: https://worldquestfx.com