DXY: Retreat extends but floor holds – ING

💡 DMK Insight

Risk assets are on the rise post-Iran ceasefire, and here’s why that matters: The rebound in equities and the bullish steepening of yield curves signal a shift in market sentiment, likely driven by reduced geopolitical tensions. This environment typically favors riskier assets, so traders should watch for continued strength in equities and currencies against the USD. The broader market context suggests that if this trend holds, we could see a sustained rally in sectors like tech and commodities, which often benefit from increased investor confidence. However, keep an eye on the USD; if it continues to weaken, it could amplify gains in emerging market currencies and commodities, creating opportunities for traders looking to capitalize on these movements. On the flip side, a sudden escalation in geopolitical tensions could reverse these gains quickly. So, it’s crucial to monitor any developments closely. Watch for key resistance levels in major indices and currency pairs, particularly if the S&P 500 approaches its recent highs. The next few trading sessions will be critical to gauge whether this bullish momentum can sustain itself or if profit-taking sets in.