Fed Divided on Hike Path, Geopolitical Headlines Drives the Market

Ultima Markets Daily Market Insights – 9 July 2026

Market Hung Between FOMC Minutes and Geopolitical Risk

Global financial markets are navigating under mixed sentiment on Wednesday as markets hang between rising Middle East tensions and the release of mixed FOMC minutes. The market today remains heavily headline-driven, with technical levels continuing to play a major role in guiding price action.

Over the FOMC Minutes release, the Federal Reserve appear to be on a divided stance over the future policy path, whereas split into two that one see for interest rate cuts by the end of the year, while another demands further hikes to combat inflation. But remain unanimous on the hold in June meeting.

Apart from that, some key highlight include:

• The Fed has slashed its policy statement to strip out forward guidance, continuing to heavily emphasize a strict data-dependent approach.
• Admit on Inflation risk persist: Despite lower energy prices, the Fed still sees upside inflation risks. Tariffs, oil supply bottlenecks, and surging power costs are cited as factors that may keep upward pressure on inflation.

While the tone remains generally hawkish and confirms the removal of the previous easing bias, the minutes provided no hawkish surprises beyond what the market had already priced in. Consequently, Fed rate futures remain unchanged at this point.

Over the Middle East tension, which set to be another key major market driver today:

• Retaliatory Strikes: Iran has launched retaliatory strikes targeting U.S. bases in the Gulf region following the breakdown of the temporary ceasefire.
• Threats of Escalation: Iran stated that its will launch widespread attacks on U.S. military bases throughout the region if hostilities continue.
• Trump’s Response: Donald Trump stated that the U.S.-Iran temporary ceasefire agreement is officially over. He noted that while the U.S. could strike Iran again, they will first monitor how the situation develops.

For today market expected to be headlines driven, while traders should also focus on how the technical play out as we lack of further macro catalyst today.

FX Technical Outlook: Dollar Remain Capped Below 101

Over currency market, dollar index remains capped below the 101.00 level, as we covered on our analysis earlier. This leaves the focus into dollar pair that now set for a potential long outlook on potential reversal.

EURUSD: Reversal Structure Intact

With the U.S. Dollar Index (DXY) remaining contained below the critical 101.00 technical handle, the bullish reversal setup for EUR/USD stays fully intact. Traders should continue to watch the 1.1400 level as major technical support.

EURUSD, H2 Chart | Ultima Markets MT5

The EUR/USD structurally remains a bullish reversal intact as we see the 1.1400 support hold. While the current market may see the dollar hold its ground for now, should the dollar quickly reverse due to a lack of near-term bullish catalysts, EUR/USD may pose for a short-term uptrend.

In the near-term, focus on the 1.1400 support, while a break above the recent resistance near 1.14300 would suggest building upward momentum for EUR/USD.

AUDUSD: Forming Support Near Major Low

Similar to the Euro, the Australian Dollar is showing signs of resilience against the greenback. With the pairs now hovering near its major low as per seen on the day chart.

A clear technical support base is forming for AUD/USD near the 0.6900 round number, tracking the broader pause in the U.S. Dollar’s upward momentum below major resistance levels.

AUDUSD, H4 Chart | Ultima Markets MT5

Meanwhile, looking at the lower timeframes, the near-term technical setup may potentially position for a rebound or a bullish reversal in the short-term trend as it regains the 0.6920 support. If the 0.6920 – 0.6900 support zone holds, we can expect some bullish movement in the pair, tracking the broader dollar pullback.

Commodities & Energy Outlook

Turning to the energy market, escalating Middle East tensions and growing fears of severe supply disruptions continue to bolster oil prices, driving a broader technical rebound.

The near-term outlook for crude oil could be significantly bolstered by supply fears now that Middle East tensions have escalated.

UKOUSD, H4 Chart | Ultima Markets MT5

While geopolitical risk provides a strong structural floor, prices are approaching major technical resistance zones near $80/barrel. Traders should watch for intraday pullbacks near these barriers, favoring a dip-buying strategy as long as support holds.

From a technical perspective, we are seeing a short-term bullish crossover in the 20- and 50-period moving averages. This usually suggests that the previous downtrend could have ended, leading to a potential reversal or at least a shift into consolidation.

For now, watch for dip-buying opportunities should any pullback move toward the $74 – $75.50 zone.

Market Summary

Global financial markets remain highly cautious and headline-driven today as escalating Middle East tensions clash with a deeply divided Fed. While the FOMC minutes stripped out forward guidance and revealed a sharp policy split, they lacked any fresh hawkish surprises to push the greenback higher.

Instead, geopolitical risk takes center stage after the collapse of the ceasefire and subsequent Iranian strikes on U.S. Gulf bases. This war premium has fueled a sharp technical recovery in crude oil over supply disruption fears.

Meanwhile, with the U.S. Dollar Index remaining firmly capped below the critical 101.00 technical ceiling, major currency pairs like EUR/USD and AUD/USD have successfully defended their key support levels, keeping their short-term bullish reversal setups intact.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.