EM ASIA CREDIT: New US Tariff on China Battery Material

Media reports in the past minutes point to an intensification of hostilities between Iran and Israel, as US President Donald Trump meets his national security team at the White House to consider joining Israeli strikes on Iran. 

• Iran will soon launch a 'punitive' operation against Israel, per Iran’s Chief of Staff of Armed Forces on Operations. Video statement here, per Iran Nuances on X.  
• Iran’s semi-official Mehr agency reports: “Iran’s senior army commander calls on Israelis to evacuate Haifa and Tel Aviv immediately,”
• Fox News reports that US President Donald Trump’s Director of National Intelligence, Tulsi Gabbard, was left out of the meeting to discuss the conflict on June 8. Gabbard’s marginalisation indicates that the Iran hawks have more influence over Trump’s foreign policy decisions that the MAGA isolationists.
• Gabbard notably said in Congressional testimony in March that US intelligence “continues to assess that Iran is not building a nuclear weapon…” Trump dismissed those comments aboard Air Force 1 yesterday: "I don't care what she said. I think they were very close to having [a nuclear weapon].”
• Israeli reporter Yossi Meman notes on X: “The signs are multiplying—actions on the ground and statements—that the U.S. is considering joining the war… And yet, it may still be about pressure, and he prefers a deal over war.”
• The NYT reports that Trump initially chose a 'middle road' with Israel but is now "seriously considering sending American aircraft in to help refuel Israeli combat jets and to try to take out Iran’s deep-underground nuclear site at Fordo..."

• Headlines surrounding the Israel-Iran conflict, paired with President’s Trump escalatory rhetoric, have dented risk sentiment in currency markets, which has filtered through into a steady move higher for the US dollar across the US session.
• GBPUSD is notably underperforming in G10 as the pair currently tracks 0.87% lower on the session as we approach the APAC crossover, comfortably back below the 1.35 mark.
• This has coincided with a breach of the 20-day exponential moving average, of which spot has not closed below since May 12. A sustained break would be a bearish development, signalling scope for a deeper retracement below 1.3456 (Jun 10 low) and targeting the 50-day EMA at 1.3346.
• The likes of EUR, AUD and NZD have fallen over half a percent against the greenback. Price action has seen EURUSD slip back below 1.15, in what is deemed as a corrective selloff for now.
• USDJPY has risen 0.3%, evidence of the broad dollar strength on display. The pair is narrowing the gap to last week’s highs at 145.46. Key short-term resistance remains further out at 146.28, the May 29 high.
• Wednesday’s data calendar kicks off with UK CPI. US jobless claims & housing starts will precede the June FOMC decision later in the session.

• RES 4: 1.3800 Round number resistance 
• RES 3: 1.3757 1.618 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 2: 1.3681 1.500 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 1: 1.3632 High Jun 13
• PRICE: 1.3527 @ 15:18 BST Jun 17
• SUP 1: 1.3456 Low Jun 10
• SUP 2: 1.3346 50-day EMA
• SUP 3: 1.3207 Trendline support drawn from the Jan 13 low 
• SUP 4: 1.3140 Low May 12 and key support

GBPUSD traded softer into the Tuesday close, however key support remains intact for now. As such, bulls remain in the driver’s seat. The rising price sequence of higher highs and higher lows, together with a bull set-up in moving average studies, highlights a dominant uptrend. Sights are on 1.3681 next, a Fibonacci projection. Resistance at 1.3616, the Jun 5 high has been pierced - a bullish development. Support to watch lies at 1.3456, the Jun 10 low.