Forex Signals Brief June 24: Powell Faces Heat as Dollar Swings as Fed Wobbles on July Cut

Fed Chair Jerome Powell’s upcoming congressional testimony takes center stage as geopolitical theater, falling oil, and shifting rate...

Written by: Skerdian Meta • Tuesday, June 24, 2025 • 3 min read

• Last updated: Monday, June 23, 2025

Everyone will be watching Jerome Powell today

Quick overview

Fed Chair Jerome Powell's upcoming congressional testimony is pivotal as geopolitical tensions and changing rate expectations impact markets.
Oil prices experienced a dramatic drop after initial spikes due to renewed U.S.-Iran clashes, suggesting the conflict may be more political theater than a real war.
The U.S. dollar showed volatility as Fed Governor Michelle Bowman's unexpected dovish comments raised questions about future rate cuts amid political uncertainties.
In the cryptocurrency market, Bitcoin fell below $100,000 while Ethereum gained traction, driven by institutional interest and upcoming upgrades.

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Fed Chair Jerome Powell’s upcoming congressional testimony takes center stage as geopolitical theater, falling oil, and shifting rate expectations reshape markets.

Geopolitical Theater Triggers Sharp Oil Reversal

Markets opened the week rattled by renewed clashes between the U.S., Israel, and Iran. However, the narrative quickly flipped when it emerged that the U.S. had prior warning of Iran’s retaliatory missile strikes—widely perceived as symbolic. This fed speculation that the conflict was more political theater than the start of a broader war.

Oil prices initially spiked, with WTI crude touching $78.40 after the open, only to collapse intraday to as low as $67.70—a staggering $11 drop. Former President Trump, who had previously used public statements to guide market expectations, again jawboned oil lower, signaling no appetite for full-scale military engagement. The message: the war premium may already be priced out.

Dollar Volatile as Fed Signals Shift Again

As the “war trades” unraveled, broader markets rallied and safe-haven bids in the U.S. dollar reversed sharply. Initially boosted by hawkish Fed expectations, the dollar later weakened after Fed Governor Michelle Bowman pivoted unexpectedly—stating support for a July rate cut if inflation holds steady. Bowman had previously been among the most vocal opponents of easing, adding to the market’s confusion.

The sudden dovish tone coincides with reports that President Trump is considering new leadership at the Fed. With such political crosswinds, the credibility of U.S. monetary policy remains in flux. The USD/JPY pair swung nearly 200 pips, underscoring this volatility, and now faces critical support at 142.70 and resistance near 145.00.

Today’s Forex Market Events

Canada CPI in Focus for Rate Cut Clarity

The spotlight now shifts to Canada, where May’s inflation report will heavily influence the Bank of Canada’s (BoC) July decision. Headline CPI is expected to remain muted—around 1.7% y/y—due to lower energy prices and earlier carbon tax repeal. However, all eyes are on core CPI, which rose to 3.2% in April. A dip to 2.9% or lower would strengthen the case for a near-term cut, while stickier inflation may force the BoC to stay cautious.

In the days ahead, Canada’s Q2 Business Outlook Survey and labor data will further shape market expectations.

Fed Chair Powell’s testimony in Congress will be important to watch on Tuesday as he will face tough questioning from Republican Party members on the decision to not cut interest rates.

Last week, markets were slower than what we’ve seen in recent months, with gold retreating as a result, the EUR/USD jumping above 1.16 but returned back below 1.15, while stock markets retreated on Friday. The moves weren’t too big though, and we opened 35 trading signals in total, finishing the week with 23 winning signals and 12 losing ones.

Gold Slides Despite Geopolitical Risk

Despite the flare-up in Middle East tensions, gold prices declined nearly 3% last week—highlighting how risk-off moves are now being selectively priced. After reaching a record high of $3,500/oz in April, gold has slipped to test short-term support levels. The 20-day and 50-day moving averages are acting as stabilizing zones, but hesitation remains evident, with multiple doji candlesticks on the daily chart signaling investor indecision.

Should tensions re-escalate, gold may retest $3,430–$3,450. A lasting peace narrative, however, could see a retreat below $3,300.

XAU/USD – Daily Chart

USD/JPY Driven by Flows, Not Fundamentals

The USD/JPY pair showed behavior that diverged from the typical interest-rate spread narrative. Instead, capital outflows from Japan — driven by global yield-seeking and heightened geopolitical uncertainty — pushed the pair from 143.40 to 144.31.

Analysts view the movement as more flow-driven than fundamentally justified. Key resistance sits around 145.00, while immediate support lies at 142.70. Without a clear shift in risk sentiment, broader gains in the pair could lose steam.

USD/JPY – Weekly Chart

Cryptocurrency Update

Bitcoin Slips Below $100K as Sentiment Sours

Bitcoin, which surged above $111,000 in May, has since softened considerably. After breaking below its 50-day moving average near $104,000, BTC fell through the psychological $100,000 barrier on Sunday—the lowest level since early May. With long-term optimism still intact, this may present a key buying zone. But short-term traders are eyeing potential support around $90,000 or even April’s lows of $74,000.

BTC/USD – Weekly chart

Ethereum Outpaces Bitcoin Amid Technical Tailwinds

Ethereum (ETH) has outshone Bitcoin in recent weeks, rallying over 20% since April on institutional buying and excitement over the Pectra upgrade. The technical focus is now the 200-day moving average. A breakout above this level could open the path toward $4,000—potentially allowing ETH to outperform BTC through the summer.

ETH/USD – Daily Chart

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ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.