A surprise ceasefire between Israel and Iran, announced by President Trump, has sent shockwaves through the global financial markets. This pivotal shift immediately triggered a sharp reversal in safe-haven flows and highlighted the impact of intermarket currency correlation. For forex traders, understanding how geopolitical shifts influence cross-asset behavior is essential for tactical positioning—especially when applying forex portfolio diversification and guarding trades with a clear risk-reward ratio in forex swings.
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 Analysis
GOLD
Gold saw a sharp reversal as the ceasefire announcement ignited a global risk-on mood. While prices remain structurally bullish, the short-term shift is bearish. MACD reflects rising selling volume, and RSI shows oversold conditions. Traders should await normalization before engaging, particularly those using long-hold forex strategies or integrating gold into volatility-based forex strategies.
SILVER
Silver remained muted, pulling back slightly from the EMA200. While the overall structure is intact, it flirts with a bearish shift. Still considered part of a diversified play for those executing a forex portfolio diversification strategy.
DXY
The Dollar slid on the ceasefire news, reaffirming its bearish longer-term structure. Although recent PMI data was positive, it wasn’t enough to reverse sentiment. MACD is strongly bearish, and RSI is in oversold territory. This mirrors the broader intermarket currency correlation, with risk assets surging and the Dollar retreating.
GBPUSD
The Pound rallied alongside global risk assets. Despite previous bearish expectations, it has moved back into its consolidation zone. A reminder to traders that risk-reward ratio in forex swings should adapt dynamically to shifting fundamentals.
AUDUSD
The Aussie rose in response to the ceasefire, reaching for the EMA200. MACD signals strong bullish volume, while RSI calls for a potential cooldown. A risk-on asset like AUD typically performs well in such reversals, making it a useful hedge in forex portfolio diversification.
NZDUSD
The Kiwi mirrored the Aussie’s behavior, climbing from its range low toward the EMA200. MACD is bullish, but RSI nears overbought. Traders should stay nimble, using volatility-based forex strategies to manage entries amid this sentiment reversal.
EURUSD
The Euro is holding its ground amid consolidation, supported by upbeat German PMI data. MACD shows bullish volume, while RSI stays moderate. As part of your long-hold forex strategies, EURUSD remains a viable candidate, especially given its resilience in the face of Dollar volatility.
USDJPY
USD/JPY pulled back from resistance, with Yen strength kicking in post-Dollar weakness. MACD is bearish and RSI suggests potential bounce. While still consolidating, this pair is worth watching for opportunities tied to intermarket currency correlation—particularly between JPY, USD, and commodity movements.
USDCHF
The Franc gained ground modestly. Despite its safe-haven profile, it lagged other currencies in this cycle. MACD and RSI remain neutral, so this pair may not be ideal for active setups until a clearer break is seen. Maintain as a hedge in a forex portfolio diversification framework.
USDCAD
USD/CAD saw a controlled drop but is showing signs of bullish resilience. CPI data from Canada is awaited. MACD leans bearish, RSI oversold. Despite recent moves, this remains on the buy radar, aligning with long-hold forex strategies when supported by commodity trends.
Final Thoughts
The Trump-brokered ceasefire between Israel and Iran has reshaped sentiment across all markets—demonstrating just how powerful intermarket currency correlation can be. From safe havens like Gold and the Dollar losing steam, to risk-on currencies rallying, traders must stay flexible and focused.
Now more than ever, having a trading plan rooted in forex portfolio diversification, governed by a defined risk-reward ratio in forex swings, and adaptive to volatility-based forex strategies is essential for navigating these turbulent times. Watch for structure breaks, normalize indicators, and stay tuned to the geopolitical pulse.