The prospect of a deal between the US and Iran has enhanced risk-taking appetites today, despite the ambiguity surrounding the agreement’s details and the apparent differences in interpretation between Washington and Tehran regarding what has been settled. Brent and WTI are approaching their lowest levels in two months. Stocks and bonds have experienced a rally. The dollar has experienced selling pressure, with the PBOC establishing the dollar’s fix at a new three-year low. At the conclusion of the previous week, the US government mandated that Anthropic revoke full access to its latest offerings, Fable 5 and Mythos AI. The implications remain a topic of ongoing discussion. The US has also included several major Chinese firms, such as Alibaba, Baidu, and BYD, on the roster of companies purportedly linked to military affiliations. The most immediate implications involve limiting Pentagon procurement; however, Beijing contends that this action violates the recent agreement established between Trump and Xi. Lastly, it is observed that Swiss voters have declined the referendum aimed at limiting the nation’s population to 10 million, with the results showing a 55% to 45% split. Nonetheless, the referendum seems to leave the immigration issue unresolved.

The euro solidified its position ahead of the weekend, trading within the range of approximately $1.1555 to $1.1590. It recorded a seemingly bullish outside up day on June 11, driven by optimism regarding a Middle East settlement. Support near $1.15 was tested twice last week, reinforcing its importance. It opened near 1.1570 today and reached a little above 1.1620. Since the peak was noted, the euro has stabilised and identified support just under $1.16, where options for 1.43 billion euro are set to expire today. Nearby resistance is observed in the $1.1640-50 range. The dollar solidified its position against the yen as the weekend approached. It reached a peak around JPY160.60 in the middle of last week, subsequently declining to approximately JPY159.60 due to optimism on June 11. It has maintained a position above the 20-day moving average, which is around JPY159.70 today, and has not dipped below this level in the past month. Yet, it still recovered ahead of the weekend and settled above JPY160 for the seventh time in the past two weeks. It is currently fluctuating within a quarter of a yen range around JPY160 today, with options totalling approximately $960 million set to expire today.

News before the weekend indicated that the UK economy contracted by 0.1% in April, which led to sterling reaching a session low near $1.3385. It swiftly rebounded to the session peak around $1.3425 before entering a consolidation phase. It revisited that area once more around midday in NY and it maintained its position again. It has reached $1.3460 today, marking a six-day high. The next technical target may be the $1.3480-$1.3500 area. The Canadian dollar spent Friday’s session consolidating the loss from the previous session that saw it trade at levels not seen since the end of last November. The greenback reached nearly CAD1.4025. It spent the session ahead of the weekend below CAD1.40 and was sold to nearly CAD1.3950 today. Last Thursday’s range is crucial (~CAD1.3930-CAD1.4025).

The Australian dollar exhibited a seemingly bullish key upside reversal during the risk-on driven advance on June 11. Follow-through ahead of the weekend was restricted to approximately 0.05 cents. Nonetheless, the consolidation appears to be advantageous. Today’s buying activity has pushed the Aussie to the lower boundary of a resistance range, which spans from $0.7090 to $0.7120. A convincing move above there would negate the bearish head and shoulders pattern we have been tracking. There are approximately A$1 billion in options at $0.7075 and an additional A$485 million at $0.7085 that are set to expire today.