Wednesday trading continues in a very unstable and headline-driven environment.
Everything still revolves around the situation involving Iran and the United States. The messaging is mixed and constantly changing. On one side, Donald Trump is talking about extending the ceasefire indefinitely. On the other, there are reports about continued military pressure and a blockade.
At the same time, Iran has refused to attend talks in Pakistan, which adds to the uncertainty.
This back-and-forth is clearly visible on the charts, especially on the US Dollar Index and pairs with the US dollar. Price action has been very choppy, with sharp moves in both directions and no clear trend, particularly in the second half of yesterday.
As we move into the European session, we can see relative strength in antipodean currencies, especially the New Zealand dollar. Some European currencies are weaker, while the dollar is slightly softer, though not in a decisive way.
On equities, we are seeing a mild correction after recent gains. Still, it’s important to note that many indices remain at or very close to all-time highs, so the broader trend is still positive.
In commodities, oil is attempting to move higher again, reflecting ongoing uncertainty. Meanwhile, gold and silver had a weak session yesterday but are now trying to bounce. It’s still unclear whether this is the start of a reversal or just a short-term correction.
Today’s key event on the earnings side is Tesla, which will report after the US market close. That could bring some volatility, especially in tech and growth stocks.
On the macro side, we already have inflation data from the UK, which is important for the British pound. Beyond that, the calendar is light.
So once again, the main driver is not data, but headlines. And as long as that continues, we should expect more volatility and less clarity in direction.