Daily Market Analysis

Latest Economic Insights

Headlines:

• The U.S. dollar is hovering near its highest level in three weeks.
• S tariffs are reigniting concerns over trade tensions and inflationary pressures.
• Rising oil prices are strengthening expectations of tighter U.S. monetary policy.
• The probability of a Federal Reserve rate hike in September has climbed above 78%.
• Gold is holding on to modest weekly gains.
• Brent crude has surpassed $100 per barrel, while WTI crude is approaching $91 per barrel.
• Disruptions in the Red Sea and the Black Sea are increasing supply-side risks.
• Bitcoin is facing weak spot-market demand despite continued strength in futures market activity.

Fundamental Analysis

• The U.S. dollar Index and Monatery Policy:
  • The U.S. Dollar Index traded near the 101.3 level on Friday, remaining close to its highest level in three weeks. The greenback continued to draw support from newly imposed U.S. tariffs on several key trading partners, alongside rising energy prices and growing expectations that the Federal Reserve will maintain a tighter monetary policy stance.
  • Under the new trade framework, imports from countries including Mexico, Canada, the United Kingdom, and India will be subject to tariffs of approximately 10%, linked to U.S. concerns regarding forced labor practices. Meanwhile, tariffs on goods imported from the European Union and Taiwan will be capped at 10%.
  • Products imported from Japan, South Korea, and Switzerland will generally face tariffs of up to 12.5%, with the possibility of additional duties on selected goods. The measures have renewed concerns over an expansion of global trade restrictions and higher import costs within the U.S. economy.
  • The latest tariff measures have also increased market uncertainty, as they could lead to higher prices for imported goods and pass-through effects on consumers. This, in turn, may reinforce inflationary pressures and provide the Federal Reserve with further justification to keep interest rates elevated for an extended period.
  • The U.S. dollar also received additional support from higher oil prices driven by escalating tensions in the Middle East, as well as the continued resilience of the U.S. labor market, which has reduced expectations for a near-term shift toward a more accommodative monetary policy stance.
  • Market pricing currently implies approximately a 34% probability of a Federal Reserve rate hike at next week’s policy meeting, while the likelihood of an increase in September has risen to more than 78%. Investors are also factoring in the possibility of an additional rate hike before year-end should inflationary and energy-related pressures persist.
  • On the geopolitical front, U.S. President Donald Trump warned of a potential expansion of military operations against Iran, stating that Tehran would be held accountable for any future attacks by the Houthis on commercial vessels transiting the Red Sea.
  • Trump also threatened what he described as a significant military response against Iran and the Houthis, indicating that a broad military strike on Iran remains under consideration if attacks on maritime shipping continue.
  • These developments have heightened concerns over a wider regional conflict and contributed to a higher geopolitical risk premium across energy markets.

• Gold:
  • Gold traded steadily near $4,050 per ounce on Friday, following a nearly 2% decline in the previous session. Despite the recent pullback, the metal remained on course to deliver modest gains for the week, underpinned by persistent demand for safe-haven assets.
  • Investor interest in gold continued to be supported by heightened geopolitical uncertainty and growing concerns over a potential escalation of tensions in the Middle East, particularly after attacks targeting oil tankers and renewed U.S. warnings of possible additional military action against Iran.
  • At the same time, the rally in crude oil prices constrained further gains in bullion. Higher energy prices tend to fuel inflationary pressures, reinforcing expectations that the Federal Reserve may maintain a restrictive monetary policy stance for longer.
  • Gold also faced headwinds from a stronger U.S. dollar and rising Treasury yields. As a non-interest-bearing asset, gold becomes relatively less attractive when yields increase, leaving the market caught between safe-haven demand and expectations of prolonged higher interest rates.
  • Going forward, gold’s direction is likely to depend on the trajectory of oil prices, incoming U.S. economic indicators, and any guidance from Federal Reserve officials regarding the outlook for future interest-rate decisions.

• Oil:
  • Oil prices extended their rally on Friday, with Brent crude trading near $100 per barrel and WTI hovering between $91 and $92 per barrel, putting both benchmarks on track to post weekly gains exceeding 12%.
  • The advance followed renewed geopolitical tensions after the U.S. President warned of a large-scale military response against Iran and the Houthis should attacks on commercial vessels in the Red Sea continue.
  • Markets also reacted to the possibility of broader military operations targeting Iranian infrastructure. The threats came in the wake of attacks on two Saudi oil tankers in the Red Sea by Iran-backed Houthi militants, an incident viewed as part of efforts to impose a declared blockade on Saudi ports and open a new front in the broader regional conflict.
  • Crude prices have now risen by more than 30% from levels seen prior to the outbreak of the conflict earlier this month, as disruptions to oil flows through the Strait of Hormuz persist and concerns intensify over the region’s ability to maintain normal export volumes.
  • The combination of supply disruption risks, heightened geopolitical uncertainty, and fears of a wider regional escalation has continued to support bullish sentiment across global energy markets.
  • Supply concerns intensified after attacks on oil tankers in the Black Sea and the Sea of Azov forced the Caspian Pipeline Consortium to suspend crude loading operations at its Black Sea export terminal.
  • This route is one of the region’s most strategically important export channels, handling roughly 80% of Kazakhstan’s crude oil exports. The disruption in loading activity has therefore heightened concerns over global supply availability and provided additional support to oil prices.
  • Oil markets remain highly sensitive to geopolitical and diplomatic developments. A further escalation in regional tensions could push prices higher by increasing supply-risk concerns, while any credible signs of a ceasefire or de-escalation may help reduce the geopolitical risk premium currently embedded in crude markets.

• Bitcoin:
  • Bitcoin continued to exhibit relatively weak spot-market demand, while activity in the futures market remained positive. However, futures positioning has yet to reach the levels seen during the recovery rally that took place approximately three months ago.
  • On-chain data indicates that more than 50% of Bitcoin’s circulating supply is currently being held at an unrealized loss, highlighting the ongoing pressure faced by a large portion of investors who entered the market at higher price levels.
  • At the same time, long-term holder balances have climbed to a record high of approximately 14.7 million BTC, signaling continued accumulation and a reduction in the amount of Bitcoin available for sale in the market.
  • This divergence points to subdued short-term demand alongside stronger conviction among long-term investors. Nevertheless, Bitcoin will likely require a meaningful improvement in spot trading volumes and sustained inflows into investment funds and exchange-traded products to confirm a renewed bullish momentum.

Economic Calendar (GMT+3 / KSA time)

  From the United States

Manufacturing PMI (July) – 16:45

Services PMI (July) – 16:45

New Home Sales (June) – 17:00  

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: Bearish
• Timeframe: 30 minutes
• Current Price: 4,029
• Primary Scenario: Sell on a breakdown below 4,012
• Targets: 3,978 followed by 3,945
• Alternative Scenario: Buy on a breakout above 4,053
• Targets: 4,085 followed by 4,120
• Note: Gold remains bearish below 4,053, with a break under 4,012 likely to accelerate losses toward lower support levels

CRUDE OIL

• Trend: Bullish
• Timeframe: 30 minutes
• Current Price: 93.05
• Primary Scenario: Buy on a breakout above 94.27
• Targets: 95.99 followed by 97.89
• Alternative Scenario: Sell on a breakdown below 92.14
• Targets: 90.29 followed by 88.52
• Note: Oil maintains its bullish trend while trading above key moving averages, with 92.14 serving as the key support level to sustain positive momentum.

EURUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current Price: 1.1380
• Primary Scenario: Buy on a breakout above 1.1395
• Targets: 1.1425 followed by 1.1460
• Alternative Scenario: Sell on a breakdown below 1.1365
• Targets: 1.1330 followed by 1.1297
• Note: The pair remains under selling pressure below 1.1395 after a strong decline, with current price action consolidating within a narrow range.

GBPUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current Price: 1.3312
• Primary Scenario: Buy on a breakout above 1.3341
• Targets: 1.3374 followed by 1.3411
• Alternative Scenario: Sell on a breakdown below 1.3291
• Targets: 1.3256 followed by 1.3222
• Note: The pair remains below key moving averages, with failure to reclaim 1.3341 likely to keep the bearish trend intact.

NAS 100

• Trend: Bearish
• Timeframe: 30 minutes
• Current Price: 28,433
• Primary Scenario: Buy on a breakout above 28,544
• Targets: 28,676 followed by 28,802
• Alternative Scenario: Sell on a breakdown below 28,250
• Targets: 28,083 followed by 27,873
• Note: The price remains below key moving averages, keeping the bearish bias intact. A sustained breakout above 28,544 is needed to shift momentum to the upside.