Forex Signals Brief June 25: Could Powell Send the S&P 500 to New Highs Today?

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Markets surged as Fed Chair Powell hinted at possible rate cuts, and today’s comments could send the S&P 500 to a new high.

Fed Chair Powell Keeps Options Open as Oil Crashes and USD Slips

The U.S. dollar weakened broadly on Tuesday, as investors responded to collapsing oil prices, softer inflation signals from Canada, and a market-friendly tone from Federal Reserve Chair Jerome Powell. The energy market saw a second consecutive sharp drop in crude prices, with oil tumbling about 5% on the day. That brought the two-day decline to more than $10, highlighting renewed volatility in commodities and easing inflationary pressure globally.

Despite the oil collapse—which would typically weaken the Canadian dollar—the USD/CAD currency pair ended nearly unchanged. Early in the U.S. session, the loonie received a brief boost after Statistics Canada reported a 0.6% rise in CPI for May. While that supported a slight month-on-month inflation bounce, the year-over-year data showed a moderation, hinting that broader inflationary pressures might be softening. However, the oil slump pulled CAD lower again, neutralizing the earlier gains.

Powell Testifies to Congress: No Rush, All Options Open

In Washington, Federal Reserve Chair Jerome Powell delivered his testimony before the House of Representatives, with markets keenly parsing his comments for clues on future monetary policy. Powell reiterated that the U.S. economy remains strong, with no clear signs of weakness in the labor market, and that the country is not currently in a recession. He emphasized the Fed’s dual mandate remains in balance: price stability and maximum employment are not currently in conflict.

While Powell acknowledged global uncertainties—including the still-unfolding situation in the Middle East—he cautioned that it was too early to gauge their full impact on the U.S. economy. Importantly, he left the door open to a potential interest rate cut as early as July, stating that if inflation shows clear signs of cooling, an earlier move may be justified. At the same time, he warned that if inflation remains stubborn or job market strength persists, the central bank could wait longer.

Notably, Powell insisted that the Fed is not operating under any fixed timeline for cuts. The policy path remains flexible, guided entirely by incoming data.

Wall Street Reacts with Optimism

Markets responded favorably to Powell’s balanced and non-committal stance, with all major U.S. stock indices rising sharply on the day. The Dow Jones Industrial Average gained 507.24 points, or 1.19%, to close at 43,089.02. The S&P 500 climbed 67.01 points, or 1.11%, ending the session at 6,092.18. Meanwhile, the tech-heavy Nasdaq Composite outperformed, advancing 281.56 points (1.43%) to finish at 19,912.53.

The gains reflected investor relief that the Fed is not rushing into further hikes and may even ease policy should inflation allow. Dovish undertones from Powell, combined with easing energy prices, helped to reignite risk appetite across equities, particularly in interest-rate-sensitive sectors like technology.

Today’s Forex Market Events

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 Tests the 50 Daily SMA as Geopolitical Risks Diminish

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.

USD/JPY Driven by Flows, Not Fundamentals

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

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.

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