Daily Market Analysis

Latest Economic Insights

Headlines:

• The U.S. dollar retreats as hostilities between the United States and Iran pause.
• Lower oil prices ease concerns over inflation and supply disruptions.
• Gold climbs to $4,100, rebounding from its recent lows.
• Markets are awaiting the Federal Reserve’s policy meeting on Wednesday.
• Brent crude is trading near $91 per barrel, while WTI crude is hovering around $84 per barrel.
• Houthi attacks on Saudi Aramco facilities continue to keep supply risks elevated.
• Spot Bitcoin ETFs have recorded seven consecutive days of net inflows.

Fundamental Analysis

• The U.S. dollar Index and Monatery Policy:
  • The U.S. Dollar Index slipped to approximately 101.2 on Monday, giving back a portion of last week’s gains as crude oil prices retreated following a pause in hostilities between the United States and Iran over the weekend. The easing of tensions reduced concerns about energy supply disruptions and a renewed surge in inflationary pressures.
  • Late Friday, Washington suspended its military operations against Iran after nearly two weeks of activity, although no official ceasefire agreement was announced. In response, Tehran indicated that it had also ceased its retaliatory military actions, signaling a temporary reduction in regional tensions.
  • Iran additionally engaged in discussions with Oman regarding conditions in the Strait of Hormuz, raising hopes that diplomatic efforts could help preserve the security of a critical global energy corridor and prevent disruptions to international oil shipments.
  • The combination of easing geopolitical risks and lower oil prices has tempered inflation expectations, reducing support for the U.S. dollar. In recent weeks, the currency had been bolstered by rising energy costs and growing speculation that the Federal Reserve could maintain a more restrictive monetary policy stance.
  • Despite the improvement in sentiment, investors remain cautious. The absence of a formal or long-term agreement between Washington and Tehran, coupled with continued threats to energy infrastructure across the region, suggests that geopolitical and supply-side risks remain elevated.
  • Investor attention is now firmly focused on this week’s Federal Reserve policy meeting, with markets broadly expecting the U.S. central bank to leave interest rates unchanged when it announces its decision on Wednesday.
  • Nevertheless, some market participants believe the Fed could surprise investors with a more hawkish stance, potentially delivering a rate hike at the current meeting in response to the inflationary pressures generated by the sharp rise in oil prices over recent weeks.
  • The base-case scenario, however, remains that policymakers will keep rates on hold this week and consider a rate increase in September should incoming economic data continue to point to persistent inflationary pressures and resilient economic activity.
  • Investors will also closely monitor the release of second-quarter U.S. GDP data, the latest Personal Consumption Expenditures (PCE) inflation figures, and earnings reports from several major U.S. corporations.
  • These releases are expected to provide further insight into the strength of the U.S. economy and the likely path of future monetary policy.

• Gold:
  • Gold rose nearly 1% to trade around $4,100 per ounce on Monday, rebounding from a nine-month low as declining oil prices and renewed weakness in the U.S. dollar improved sentiment toward the precious metal.
  • The metal had faced sustained selling pressure in recent weeks despite elevated geopolitical tensions. A sharp rally in crude oil prices fueled inflation concerns, leading investors to price in a more restrictive Federal Reserve policy outlook. Higher interest rate expectations and rising Treasury yields weighed on gold, which offers no yield.
  • Recent developments in the Middle East have helped shift market dynamics. The pause in hostilities between the United States and Iran contributed to a decline in oil prices, easing fears of prolonged energy-driven inflation and reducing upward pressure on interest rates and bond yields. This environment has provided renewed support for bullion prices.
  • Gold also attracted fresh buying interest after its recent pullback, with investors taking advantage of lower price levels following the metal’s steep decline over the past several weeks.
  • Looking ahead, market participants remain focused on the Federal Reserve’s upcoming policy decision and comments from Chair Kevin Warsh. Any indication that policymakers remain on track for a potential rate hike in September could cap further upside in gold, while a more accommodative tone may reinforce the current recovery and support additional gains.

• Oil:
  • Oil prices fell sharply on Monday as the absence of U.S. strikes against Iran for a second consecutive night eased fears of a major supply disruption across the Middle East.
  • S. West Texas Intermediate (WTI) crude dropped by as much as 7% during the session, falling to around $83 per barrel before trimming some of its losses to trade near $84 per barrel.
  • Meanwhile, Brent crude declined to approximately $91 per barrel, retreating from levels above $100 per barrel reached last week when heightened geopolitical tensions drove a significant increase in the risk premium embedded in oil prices.
  • The de-escalation began late Friday when military operations were suspended without a formal ceasefire announcement. Iran subsequently stated that it had halted its retaliatory actions and engaged in discussions with Oman regarding developments in the Strait of Hormuz, helping to reassure markets about the security of key shipping routes and energy exports.
  • Despite the latest pullback, crude prices remain significantly elevated, with both major benchmarks still up roughly 40% this month. The gains have been fueled by expanding supply concerns stretching from the Strait of Hormuz to the Red Sea, which has become an increasingly important alternative route for Saudi oil exports amid ongoing regional disruptions.
  • Risks remain elevated after the Iran-backed Houthis claimed responsibility for attacks targeting Saudi Aramco facilities at the Red Sea ports of Jizan and Yanbu over the weekend.
  • These attacks suggest that the pause in direct hostilities between the United States and Iran has not eliminated all threats facing regional energy infrastructure and key maritime shipping routes.
  • Oil market direction in the coming days will depend largely on whether the current de-escalation holds, the outcome of discussions regarding the Strait of Hormuz, and any new developments related to Houthi attacks or Saudi Aramco facilities.

• Bitcoin:
  • Bitcoin has seen improved liquidity and market activity, with spot trading volume exceeding approximately $1.9 billion. Meanwhile, spot Bitcoin exchange-traded funds (ETFs) continued to record positive inflows for the seventh consecutive day.
  • These inflows indicate sustained institutional demand for Bitcoin, despite the uncertainty prevailing across global markets ahead of the Federal Reserve’s policy meeting and the release of key U.S. economic data.
  • However, Bitcoin may remain vulnerable to volatility this week, particularly if the Federal Reserve’s decisions or commentary turn out to be more hawkish than markets expect, as higher interest rates and rising yields could weigh on risk-sensitive assets.
  • Conversely, a less hawkish stance from the Federal Reserve could support market liquidity and boost demand for Bitcoin and other digital assets, especially with continued inflows into spot Bitcoin ETFs.
  • Overall, strong institutional inflows represent a positive signal for Bitcoin, although maintaining the broader upward trend will require sustained trading volumes and continued buying activity in the spot market.

Economic Calendar (GMT+3 / KSA time)

No major economic data releases scheduled for today

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: Neutral with a bullish bias
• Timeframe: 30 minutes
• Current Price: 4,093
• Primary Scenario: Buy on a breakout above 4,113
• Targets: 4,145 followed by 4,180
• Alternative Scenario: Sell on a breakdown below 4,072
• Targets: 4,037 followed by 4,005
• Note: Gold remains supported above the short-term moving averages, with a break above 4,113 likely to extend gains toward higher resistance levels, while a move below 4,072 could trigger renewed selling pressure.

CRUDE OIL

• Trend: Bearish
• Timeframe: 30 minutes
• Current Price: 85.29
• Primary Scenario: Buy on a breakout above 86.71
• Targets: 88.43 followed by 90.33
• Alternative Scenario: Sell on a breakdown below 84.58
• Targets: 82.73 followed by 80.96
• Note: Oil remains under pressure after breaking below the moving averages, with bearish momentum likely to persist as long as prices remain below 86.71.

EURUSD

• Trend: Bullish (short-term)
• Timeframe: 30 minutes
• Current Price: 1.1410
• Primary Scenario: Buy on a breakout above 1.1422
• Targets: 1.1450 followed by 1.1485
• Alternative Scenario: Sell on a breakdown below 1.1390
• Targets: 1.1356 followed by 1.1323
• Note: Price has successfully reclaimed the moving averages and is trading above them, with a break above 1.1422 remaining the key trigger for further upside momentum.

GBPUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current Price: 1.3355
• Primary Scenario: Buy on a breakout above 1.3379
• Targets: 1.3412 followed by 1.3448
• Alternative Scenario: Sell on a breakdown below 1.3328
• Targets: 1.3293 followed by 1.3259
• Note: The pair remains in a downtrend, trading below the 200-period moving average, with a break above 1.3379 serving as the first signal of improving bullish momentum

NAS 100

• Trend: Bearish
• Timeframe: 30 minutes
• Current Price: 28,562
• Primary Scenario: Buy on a breakout above 28,661
• Targets: 28,794 followed by 28,919
• Alternative Scenario: Sell on a breakdown below 28,388
• Targets: 28,200 followed by 27,990
• Note: Price is attempting a rebound from recent lows but remains below the key moving averages, keeping the recovery corrective unless it breaks above 28,661 and holds above this level.