Daily Market Analysis

Latest Economic Insights

Headlines:

• The U.S. dollar remains steady above 101, supported by higher Treasury yields and rising oil prices.
• The United States continues its strikes on Iran for the eleventh consecutive night.
• Disruptions to shipping in the Red Sea are heightening concerns over energy supply security.
• Markets are pricing in a pause in interest rates, with the possibility of a rate hike in September.
• Gold maintains its gains and is trading near $4,080 per ounce.
• S. crude oil inventories posted an unexpected increase during the week.
• Brent crude is trading near $92 per barrel, while WTI crude is trading near $85 per barrel.
• Bitcoin reached its highest level in five weeks, trading near $66,600.

Fundamental Analysis

• The U.S. dollar Index and Monatery Policy:
  • The U.S. Dollar Index held firm above the 101 mark on Wednesday, posting gains for a fourth consecutive session as higher U.S. Treasury yields and stronger oil prices continued to underpin the greenback.
  • The move came amid ongoing geopolitical tensions, with the United States carrying out strikes on Iranian targets for an eleventh straight night.
  • President Donald Trump signaled that the likelihood of imminent negotiations with Iran remains low and warned that further military action could follow if tensions escalate.
  • The developments supported crude oil prices and reinforced demand for the U.S. dollar, as investors gravitated toward highly liquid safe-haven assets.
  • At the same time, shipping disruptions in the Red Sea caused by Iran-backed Houthi forces in Yemen heightened concerns over global energy supply chains and international trade. Market attention remains focused on the Strait of Hormuz, where continued maritime disruptions are raising concerns of potential impacts on the flow of oil and other critical commodities.
  • From an economic perspective, ADP employment data indicated that U.S. private employers added an average of 16,500 jobs per week in the four-week period ending July 4, compared with an average weekly increase of 19,250 jobs during the previous four-week period.
  • The latest reading represents a fourth consecutive deceleration in private-sector hiring, suggesting that labor market conditions are gradually losing momentum. Nevertheless, the U.S. dollar remained supported by elevated Treasury yields and persistent inflation concerns linked to higher energy costs.
  • Financial markets overwhelmingly expect the Federal Reserve to keep its benchmark interest rate unchanged at next week’s policy meeting. Even so, futures pricing continues to imply a greater than 55% likelihood of a rate hike in September.
  • The Fed therefore faces an increasingly delicate balancing act. Slower job creation points to a moderation in economic activity, while rising oil prices threaten to reignite inflationary pressures. This combination could encourage policymakers to maintain a hawkish policy stance for an extended period as they seek to contain inflation without undermining economic growth.

• Gold:
  • Gold traded near $4,080 per ounce on Wednesday after surging nearly 2% in the previous session, supported by ongoing geopolitical tensions and the escalating conflict between the United States and Iran.
  • The metal held onto its gains despite rising oil prices and higher U.S treasury yields, as investors continued to seek safe-haven assets amid concerns over a broader regional conflict and disruptions to key shipping routes in the Red Sea and Strait of Hormuz.
  • However, gold’s upside remained limited by expectations that higher energy prices could reignite inflation and prompt the Federal Reserve to maintain a restrictive policy stance.
  • Rate hike expectations, with markets assigning over a 55% chance of a September increase, have capped gold’s gains, as higher treasury yields and a stronger U.S. dollar reduce the appeal of the non-yielding metal.
  • Going forward, gold is likely to remain sensitive to developments in the Middle East, energy price movements, and Federal Reserve policy expectations.

• Oil:
  • Oil prices advanced on Wednesday, with Brent crude trading near $92 per barrel and WTI crude hovering around $85 per barrel, as concerns over global supply disruptions continued to support the market.
  • The gains came despite an unexpected build in U.S. crude inventories, which rose by 2.603 million barrels in the week ended July 17, against expectations for a draw of roughly 1.5 million barrels. This followed a decline of 564,000 barrels in the previous week.
  • Despite the latest weekly increase, commercial crude oil inventories excluding the Strategic Petroleum Reserve have fallen by more than 57 million barrels over the past 13 weeks and remain around 7 million barrels below their level at the start of the year.
  • Meanwhile, the U.S. Strategic Petroleum Reserve declined by a further 5.1 million barrels to 316.5 million barrels, its lowest level in more than 43 years and roughly 420 million barrels below its maximum storage capacity. U.S. crude production rose slightly to 13.861 million barrels per day but failed to ease supply concerns.
  • Oil prices remain supported by geopolitical tensions, shipping disruptions, and energy infrastructure risks, while any progress toward a ceasefire or renewed talks could reduce the risk premium.

• Bitcoin:
  • Bitcoin climbed to around $66,602, reaching a five-week high as spot Bitcoin ETFs continued to record positive inflows for a second consecutive week.
  • The cryptocurrency faces near-term resistance at $67,286; a sustained break above this level could open the way toward $70,000, while $63,712 remains a key short-term support level. The $65,000 area has also emerged as immediate support following the recent rally.
  • A significant number of short positions were liquidated near the $66,000 level, reducing the impact of further short squeezes. As a result, Bitcoin will likely need sustained buying interest and continued ETF inflows to break above resistance and target $70,000, rather than relying solely on short-position liquidations.

Economic Calendar (GMT+3 / KSA time)

From the United Kingdom: Consumer Price Index (YoY) – 09:00

From the United States: U.S. Crude Oil Inventories – 17:30  

Smart Technical Analysis — Methodology

A primary scenario is proposed for the day, with an estimated probability of 60% to 75%. If the primary scenario fails, an alternative scenario becomes active, also with an estimated probability of 60% to 75%. The primary scenario is considered invalid once the price reaches the trigger level for the alternative scenario, at which point the alternative scenario is activated and the primary scenario is disregarded. The scenarios and probabilities presented in this report are based on technical analysis and are intended as reference guidance only. These reports are not a substitute for independent trading decisions. Traders should use them as a supporting tool alongside their own analysis and judgment.  

GOLD

• Trend: Bullish
• Timeframe: 30 minutes
• Current price: 4,128
• Primary scenario: Buy on a breakout above 4,150
• Targets: 4,182, followed by 4,217
• Alternative scenario: Sell on a break below 4,109
• Targets: 4,075, followed by 4,042
• Note: Gold continues to form higher highs and is trading above key moving averages. A sustained break above 4,150 would reinforce the bullish momentum and open the way toward further upside targets.

CRUDE OIL

• Trend: Bullish
• Timeframe: 30 minutes
• Current price: 87.10
• Primary scenario: Buy on a breakout above 88.26
• Targets: 89.98, followed by 91.88
• Alternative scenario: Sell on a break below 86.07
• Targets: 84.28, followed by 82.51
• Note: Oil maintains a clear bullish trend and is trading above all key moving averages. The upside bias remains intact as long as prices hold above 86.07.

EURUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 1.1404
• Primary scenario: Buy on a breakout above 1.1430
• Targets: 1.1458, followed by 1.1493
• Alternative scenario: Sell on a break below 1.1398
• Targets: 1.1363, followed by 1.1331
• Note: The price is consolidating within a narrow range below the moving averages. A break below 1.1398 could revive bearish momentum and trigger further downside.

GBPUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 1.3379
• Primary scenario: Buy on a breakout above 1.3417
• Targets: 1.3449, followed by 1.3486
• Alternative scenario: Sell on a break below 1.3366
• Targets: 1.3331, followed by 1.3297
• Note: The price remains below all key moving averages, keeping the bearish bias intact. A sustained move above 1.3417 would be needed to signal a potential trend reversal.

NAS 100

• Trend: Bullish
• Timeframe: 30 minutes
• Current price: 29,052
• Primary scenario: Buy on a breakout above 29,226
• Targets: 29,359, followed by 29,484
• Alternative scenario: Sell on a break below 28,965
• Targets: 28,765, followed by 28,555
• Note: The price remains above short-term moving averages while retesting the 29,000 area. A breakout above 29,226 would confirm the continuation of the bullish trend.