Daily Market Analysis

Latest Economic Insights

Headlines:

• S. dollar holds near 101.3 ahead of the Fed decision.
• Markets expect rates to remain unchanged.
• September rate-hike odds near 80%.
• Gold stays weak around $4,020.
• Middle East tensions support oil prices.
• S. crude inventories rise unexpectedly.
• Brent trades near $87; WTI near $82.
• Bitcoin hovers around $65,000 amid mixed sentiment.

Fundamental Analysis

• The U.S. dollar Index and Monatery Policy:
  • The U.S. Dollar Index stabilized near the 101.3 level during Wednesday trading after a volatile start to the week, as investors awaited the Federal Reserve’s monetary policy decision due later in the day.
  • Markets widely expect the Fed to leave interest rates unchanged, although the probability of a 25-basis-point rate hike remains close to one-third, reflecting an unusually high degree of uncertainty for a decision only hours away.
  • Market pricing also indicates nearly an 80% probability of a rate increase at the September meeting, reinforcing expectations that U.S. borrowing costs could remain elevated in the coming months.
  • These expectations persist despite repeated calls from President Donald Trump for lower interest rates. However, ongoing inflationary pressures and higher energy prices may lead the Federal Reserve to maintain a hawkish monetary policy stance.
  • Meanwhile, investors monitored renewed geopolitical concerns after the U.S. military announced that it had thwarted a surprise Iranian attack targeting American forces stationed across various locations in the Middle East.
  • The development reignited fears of broader regional escalation and provided renewed support for oil prices, shifting market focus back to the risk of higher inflation driven by rising energy costs. The direction of the U.S. dollar and global financial markets remains closely tied to:
    • The Federal Reserve’s interest-rate decision
    • The Federal Open Market Committee (FOMC) statement
    • The tone of the Fed’s press conference—particularly regarding the outlook for interest rates in September and throughout the remainder of the year.

• Gold:
  • Gold traded near $4,020 per ounce on Wednesday, holding onto the previous session’s losses as the U.S. dollar strengthened and oil prices rebounded ahead of the Federal Reserve’s policy decision.
  • Despite renewed geopolitical tensions in the Middle East, gold failed to attract significant safe-haven demand, as higher oil prices revived concerns about inflation and the prospect of interest rates remaining elevated for longer.
  • Rising interest rates and U.S. Treasury yields continue to weigh on gold, as the precious metal does not generate periodic income.
  • A stronger U.S. dollar also makes gold more expensive for investors holding other currencies. Uncertainty surrounding the Federal Reserve’s decision has further dampened risk appetite, prompting traders to refrain from building sizable positions ahead of the policy statement and subsequent press conference.
  • If the Federal Reserve leaves interest rates unchanged while maintaining a hawkish stance, gold could remain under pressure, particularly if policymakers signal that a rate hike in September remains a possibility.
  • Conversely, a less hawkish-than-expected tone could support a rebound in the precious metal, especially if it triggers declines in both the U.S. dollar and U.S. Treasury yields.

• Oil:
  • Oil prices advanced as renewed tensions in the Middle East supported market sentiment, with Brent crude trading near $87 per barrel and West Texas Intermediate (WTI) hovering around $82 per barrel.
  • The gains came despite an unexpected increase in U.S. crude oil inventories, which rose by approximately 3.3 million barrels in the week ended July 24, compared with market expectations for a 2.5 million-barrel decline.
  • The latest build followed an increase of roughly 2.6 million barrels in the previous week, marking the second consecutive weekly rise in crude stockpiles.
  • Despite these recent inventory builds, commercial crude oil inventories—excluding the Strategic Petroleum Reserve (SPR)—have fallen by more than 54 million barrels over the past fifteen weeks and remain approximately 3 million barrels below their level at the start of the year.
  • Meanwhile, an additional 3.7 million barrels were withdrawn from the Strategic Petroleum Reserve during the week, reducing SPR holdings to 307.7 million barrels.
  • Strategic Petroleum Reserve levels are now approaching the range widely viewed as the minimum operational threshold, estimated at between 250 million and 300 million barrels.
  • S. crude oil production also edged lower, declining to 13.80 million barrels per day (bpd) from approximately 13.86 million bpd in the previous week.
  • Meanwhile, gasoline inventories increased by 918,000 barrels, while distillate inventories declined by roughly 125,000 barrels.
  • Oil prices continue to be driven by two opposing forces: rising U.S. inventories, which point to softer supply-demand fundamentals, and renewed geopolitical risks that could threaten energy supplies and key shipping routes across the Middle East.

• Bitcoin:
  • Bitcoin traded near the $65,000 level as investors remained cautious ahead of the Federal Reserve’s policy decision.
  • Some analysts believe that a break above Bitcoin’s previous all-time high could pave the way for an extended rally and fresh record highs in the months ahead.
  • Others, however, warn of the potential for a sharp correction in August, with prices possibly retreating toward the $50,000 level if elevated interest rates and tighter liquidity conditions continue to weigh on risk assets.
  • The Federal Reserve’s decision remains a key catalyst for Bitcoin, as higher interest rates typically pressure risk-sensitive assets and reduce liquidity available to cryptocurrency markets.
  • Conversely, a decision to keep rates unchanged accompanied by a less hawkish policy outlook could support investor sentiment, helping Bitcoin hold above $65,000 and potentially regain upward momentum.
  • The current market environment remains particularly important for long-term investors, with volatility persisting and expectations divided between a move toward new all-time highs and the risk of a deeper pullback during August.

Economic Calendar (GMT+3 / KSA time)

From the United States

U.S. Crude Oil Inventories – 17:30

Federal Reserve Interest Rate Decision – 21:00

FOMC Statement – 21:00

Federal Reserve Press Conference – 21:30

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: Neutral to Bullish
• Timeframe: 30 Minutes
• Current Price: 4,042
• Primary Scenario: Buy on a breakout above 4,053
• Targets: 4,085, then 4,120
• Alternative Scenario: Sell on a break below 4,012
• Targets: 3,978, then 3,945
• Note: Gold remains range-bound; a break above 4,053 favors further gains, while a move below 4,012 signals renewed downside pressure.

CRUDE OIL

• Trend: Bearish
• Timeframe: 30 Minutes
• Current Price: 83.54
• Primary Scenario: Buy on a breakout above 84.49
• Targets: 86.21, then 88.11
• Alternative Scenario: Sell on a break below 82.57
• Targets: 80.50, then 78.73
• Note: Oil remains below key moving averages; any rebound is considered corrective unless 84.49 is decisively broken.

EURUSD

• Trend: Neutral to Bearish
• Timeframe: 30 Minutes
• Current Price: 1.1393
• Primary Scenario: Buy on a breakout above 1.1413
• Targets: 1.1441, then 1.1477
• Alternative Scenario: Sell on a break below 1.1382
• Targets: 1.1347, then 1.1314
• Note: EUR/USD remains trapped near resistance; a break below 1.1382 or above 1.1413 is needed to confirm the next directional move.

GBPUSD

• Trend: Bearish
• Timeframe: 30 Minutes
• Current Price: 1.3296
• Primary Scenario: Buy on a breakout above 1.3321
• Targets: 1.3354, then 1.3390
• Alternative Scenario: Sell on a break below 1.3270
• Targets: 1.3235, then 1.3201
• Note: The pair remains under bearish pressure below key moving averages; a break above 1.3321 is needed to improve the short-term outlook.

NAS 100

• Trend: Bearish
• Timeframe: 30 Minutes
• Current Price: 27,720
• Primary Scenario: Buy on a breakout above 27,803
• Targets: 27,936, then 28,061
• Alternative Scenario: Sell on a break below 27,510
• Targets: 27,342, then 27,132
• Note: The broader trend remains bearish, with price trading below key moving averages. The current rebound is considered corrective unless 27,803 is decisively breached and sustained.