Oil Slides Below $70, Markets Await US Jobs Data

Market Wrap-up: Oil Slides as Iran Talks Resume, Focus Shifts to U.S. JobsMarket activity moderated following last week's PCE inflation release, with Friday delivering relatively limited price action. The U.S. Dollar Index (DXY) eased modestly after its strong weekly rally. While fresh concerns surrounding the Middle East briefly resurfaced, the ceasefire between the United States and Iran remains in place, with both sides agreeing to resume negotiations.

According to an Axios report citing U.S. officials, Washington and Tehran are scheduled to hold further technical talks tomorrow in Qatar. At the same time, a growing number of oil tankers have resumed transiting the Strait of Hormuz, helping ease concerns over potential supply disruptions.

As a result, both Brent and WTI crude settled more than 3% lower at the end of last week. Notably, WTI closed below the psychological $70 per barrel level for the first time since February 27, before the conflict with Iran escalated.

Oil prices also remain under pressure from supply-side uncertainty within OPEC. Iraq is pushing for a higher production quota and has warned it could leave the organization if its proposal is rejected. This adds another layer of uncertainty to the 2026 oil market following a series of major developments, including the U.S. takeover of Venezuelan oil assets, the military conflict involving the United States, Israel and Iran, and the UAE's departure from the alliance in May.

In precious metals, spot gold rose 1.2% to $4,073.78 per ounce, supported by the softer U.S. dollar. However, analysts at American Gold Exchange believe the rebound primarily reflects a technical recovery after heavy selling pressure earlier in the week.

Looking ahead, this will be an important week for the FX market as investors turn their attention to key U.S. labor market data, the ISM Manufacturing PMI, Eurozone inflation releases, and comments from policymakers at the Fed, ECB, BoE, and RBA.

The primary focus will be on the JOLTS Job Openings report, ADP Employment Change, ISM Manufacturing PMI, Initial Jobless Claims, and Friday's Nonfarm Payrolls (NFP). A resilient labor market could reinforce expectations that the Fed may keep policy restrictive for longer, while weaker employment data could weigh on the U.S. dollar.

XAU/USD: Gold Rebounds as Softer Dollar Supports Prices

Key takeaway:

Gold edged higher on June 26 as the U.S. dollar weakened and expectations for additional Federal Reserve rate hikes eased following the latest inflation data.

According to CME Group's FedWatch Tool, markets are now pricing in roughly a 60% probability of a September rate hike, down from 64% previously.

Higher interest rates and a more restrictive monetary policy generally reduce gold's appeal, as the non-yielding metal becomes less attractive relative to interest bearing assets such as government bonds.

Technical Outlook:

Daily Bias: Bearish

Support: 3,964

Resistance: 4,100

Oil: WTI Falls Below $70 as Supply Risks Continue to Ease

Key takeaway:

WTI crude extended its decline on June 26 as more oil tankers resumed passing through the Strait of Hormuz, easing concerns over potential supply disruptions.

Washington and Tehran agreed to end more than three days of retaliatory attacks around the Strait of Hormuz and will hold further technical talks on Tuesday in Qatar.

Meanwhile, OPEC faces renewed internal uncertainty after the UAE's exit in May. Iraq is seeking a higher production quota and has warned it could leave the organization if its request is rejected, adding further uncertainty to the group's supply outlook.

Technical Outlook:

Daily Bias: Neutral

Support: 69.00

Resistance: 72.85

DXY: Dollar Awaits Key U.S. Labor Market Data

Key takeaway:

The U.S. dollar now faces an important test as the upcoming Nonfarm Payrolls report becomes the market's primary focus.

A stronger than expected labor market could reinforce expectations that the Fed will maintain restrictive monetary policy for longer, supporting the U.S. dollar. Conversely, weaker employment data could increase expectations for policy easing and weigh on the greenback.

Technical Outlook:

Daily Bias: Bullish

Support: 100.12

Resistance: 101.60

EUR/USD: Euro Holds Firm Despite Cooling Eurozone Inflation Outlook

Key takeaway:

The euro remained resilient despite continued uncertainty surrounding U.S.-Iran negotiations.

Lower crude oil prices have eased inflation pressures in the Eurozone, reducing the urgency for the European Central Bank to maintain a restrictive policy stance, which may limit further upside for the euro.

Meanwhile, the ECB's latest consumer survey released on Friday showed that Eurozone households expect inflation to slow to 3.5% over the next 12 months, down from 4.0% in the previous survey.

Technical Outlook:

Daily Bias: Bearish

Support: 1.13544

Resistance: 1.14177

USD/JPY: USD/JPY Rises as Markets Watch BOJ and U.S. Jobs Data

Key takeaway:

USD/JPY edged higher as lingering uncertainty surrounding U.S.-Iran negotiations continued to provide underlying support for the U.S. dollar.

However, traders remain alert to the possibility of currency intervention by Japanese authorities, which could strengthen the yen and limit further gains in the pair.

The Bank of Japan is widely expected to leave interest rates unchanged at its July 30-31 policy meeting while updating its quarterly economic projections, which markets will scrutinize for clues on the timing of the next rate hike.

Technical Outlook:

Daily Bias: Bearish

Support: 161.53

Resistance: 161.80

Markets have shifted away from last week's inflation data and are now being driven primarily by easing geopolitical risk and expectations surrounding U.S. economic data.

The ceasefire between the United States and Iran and improving oil flows through the Strait of Hormuz have pushed crude prices sharply lower, removing some inflation concerns and contributing to a modest pullback in the U.S. dollar. That softer dollar has allowed gold to stage a technical rebound, while major currency pairs remain largely driven by relative monetary policy expectations.

Attention now turns squarely to this week's U.S. labor market releases, with traders looking for fresh evidence on whether the Fed has room to keep policy restrictive for longer.

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