The US kept its benchmark Fed funds rate unchanged at 4.25%–4.50% for the fourth consecutive meeting, as widely expected. During the press conference, Fed Chair Jerome Powell warned that recently announced tariffs could exert upward pressure on prices.
Latest Fed’s “Dot-Plot” Implies Stagflation Risks
Stagflation risks emerged from the latest “dot plot” of economic projections released on 18 June, with Fed officials lowering growth forecasts for 2025 and 2026 while raising inflation expectations for 2025 through 2027, compared to March estimates.
Although the Fed maintained its median projection of two rate cuts in 2025—aligned with current market pricing via the CME FedWatch tool—it signalled fewer cuts in 2026 and 2027 than previously anticipated, reinforcing a more hawkish policy stance.
US Dollar Strength Resurfaced & Equities Sold Off, Triggered by the Fed’s Hawkish Hold
The responded positively to this “hawkish hold,” with the gaining 0.1% in today’s Asian session. It is now testing its 20-day moving average resistance around the 99.00 level.
Equity markets in Asia sold off sharply, mirroring weakness in US stock index futures, amid heightened geopolitical tensions. Bloomberg reported that US officials are preparing for a potential military strike on Iran, adding to the geopolitical risk premium.
Hong Kong’s plunged 2%—its steepest single-day loss since 7 April, following the announcement of new US “Liberation Day” tariffs. Japan’s declined 0.8% as it struggled to break above the key resistance zone at 38,850, in place since 13 May.
Gold Sandwiched & Bullish Momentum Remains Intact in WTI
Gold () remains caught between conflicting forces. While a firm US dollar is capping upside near US$3,400, escalating geopolitical tensions are supporting prices around the 20-day moving average, now acting as key intermediate support near US$3,350.
Meanwhile, maintained short-term bullish momentum, rising 0.6% to US$74.95/barrel during today’s Asian session. The move brought prices close to the recent swing high of US$75.18, recorded on 13 June amid Israel’s initial airstrikes on Iran.
Chart of the Day – EUR/USD Minor Corrective Decline Continues to Extend
Fig 2: EUR/USD minor to medium-term trends as of 19 June 2025 (Source: TradingView)
The minor corrective decline seen in the since last Thursday, 12 June high of 1.1632 has continued to extend further to the downside as it has broken below the 1.1480 near-term support (18 June minor swing low and former 5 June minor swing high) ex-post FOMC meeting.
The hourly RSI momentum indicator has continued to exhibit bearish momentum conditions and has not reached its oversold region (below 30).
The observations suggest that the EUR/USD may continue to extend its current one-week-long minor corrective decline phase within a medium-term uptrend phase that is still firmly intact.
Watch the 1.1530 key short-term pivotal resistance to maintain the intraday bearish trend bias to expose the next intermediate supports at 1.1410 (also the 20-day moving average), and 1.1360 (also the 50-day moving average and the lower boundary of the medium-term ascending channel) (see Fig 2).
On the flip side, a clearance above 1.1530 invalidates the bearish tone and shifts the focus back to the bulls for a recovery to retest 1.1610 before the next intermediate resistance comes in at 1.1660/1690.
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