Daily Market Analysis

Latest Economic Insights

Headlines:

• The U.S. dollar is on track to post a sharp weekly loss.
• The U.S. Dollar Index is trading near the 100 level after declining for three consecutive sessions.
• Potential Japanese intervention to support the yen is weighing on the U.S. currency.
• Gold is on course to record its first monthly gain in five months.
• Expectations of a U.S. interest rate hike in September are limiting gold’s upside.
• Renewed U.S. strikes against Iran are heightening geopolitical risks.
• Oil prices are headed for monthly gains exceeding 20%.
• Oil tanker traffic through the Strait of Hormuz is beginning to improve.
• Bitcoin is trading near $64,700 amid heightened volatility and regulatory concerns.

Fundamental Analysis

• The U.S. dollar Index and Monatery Policy:
  • The U.S. Dollar Index traded near the 100 level on Friday after declining for three consecutive sessions, putting the greenback on track for a weekly loss of more than 1%.
  • The dollar’s weakness was driven by the cautious stance adopted by the Federal Reserve at its latest policy meeting, as well as market speculation that Japanese authorities may have intervened in the foreign exchange market to support the yen and curb excessive volatility.
  • The U.S. dollar fell by as much as 3.3% against the Japanese yen during Thursday’s trading session, amid growing expectations that Tokyo had once again stepped into the FX market to bolster its currency.
  • S. Treasury Secretary Scott Bessent also stated that the Japanese yen appears to be undervalued, noting that excessive volatility in currency markets is unhealthy. His comments reinforced expectations of continued official efforts to support the yen.
  • Meanwhile, the Federal Reserve left interest rates unchanged at its meeting this week, despite rising inflation risks stemming from the renewed conflict in the Middle East and higher energy costs.
  • However, the meeting also revealed a clear division within the Federal Open Market Committee (FOMC), as three policymakers voted in favor of raising interest rates, keeping the prospect of further monetary tightening on the table for upcoming meetings.
  • Market pricing currently implies an approximately 63% probability of a 25-basis-point U.S. rate hike in September.
  • As a result, the dollar’s recent weakness does not necessarily signal a full shift toward a dovish monetary policy stance. Inflation data, labor market conditions, and energy prices could still provide support for the U.S. currency if they reinforce expectations of additional rate increases.
  • On the geopolitical front, the U.S. military launched new strikes against Iranian targets in response to attacks on American personnel and assets across various parts of the Middle East.
  • The renewed strikes have reduced the likelihood of a near-term diplomatic breakthrough between the United States and Iran, while concerns persist over a broader escalation of the conflict and potential disruptions to regional energy transportation routes.

• Gold:
  • Gold fell below the $4,100-per-ounce level during Friday’s trading session, snapping a two-session winning streak. Nevertheless, the precious metal remained on track to post its first monthly gain in five months.
  • The yellow metal received support earlier in the week after the Federal Reserve left interest rates unchanged, temporarily easing pressure from elevated bond yields and the opportunity cost of holding non-yielding assets.
  • Gold also benefited from the decline in the U.S. Dollar Index (DXY) toward the 100 level, as a weaker dollar typically makes the metal more affordable for investors holding other currencies.
  • However, expectations that the Federal Reserve will maintain a restrictive monetary policy stance limited further gains in gold, with market-implied odds of a U.S. interest rate increase in September rising to approximately 63%.
  • Rising oil prices have also continued to fuel inflation concerns, potentially prompting the Federal Reserve to raise interest rates if price pressures persist in the coming months.
  • Gold has faced notable headwinds since the outbreak of the conflict between the United States and Iran in late February. Despite heightened geopolitical risks, safe-haven demand has not translated into sustained gains for the metal, as the supportive impact of geopolitical uncertainty has been offset by higher oil prices, rising inflation expectations, and the prospect of tighter monetary policy.
  • At the same time, the latest U.S. strikes against Iran continue to provide some support for gold’s safe-haven appeal, particularly as the likelihood of a near-term diplomatic resolution appears to be diminishing.
  • Overall, gold remains caught between two opposing forces: safe-haven demand driven by geopolitical tensions and the downward pressure stemming from expectations of higher interest rates and elevated U.S. Treasury yields.

• Oil:
  • Crude oil prices traded near $84 per barrel on Friday, putting the market on track to post monthly gains exceeding 20%. Brent crude traded near $85 per barrel, while West Texas Intermediate crude hovered around $81 per barrel.
  • The strong monthly advance followed the renewed conflict between the United States and Iran, which has heightened concerns over potential disruptions to energy supplies from the Middle East.
  • The U.S. military launched fresh strikes against Iranian targets in response to attacks by Tehran on American assets in the region, further diminishing hopes for a near-term diplomatic resolution.
  • At the same time, shipping activity through the Strait of Hormuz showed signs of improvement, with oil tanker traffic increasing after a period of slowdown, allowing millions of barrels of crude oil to move through the vital waterway.
  • The improvement in shipping activity has partially eased concerns over potential supply shortages. However, the ongoing conflict continues to leave oil flows through the Strait of Hormuz vulnerable to sudden disruptions.
  • In the Red Sea, Saudi Arabia held talks with representatives from 43 countries to discuss the formation of a maritime coalition aimed at safeguarding key shipping routes, following the blockade announced last week by the Iran-backed Houthis.
  • The initiative is intended to protect trade flows and energy exports through the Red Sea, which has gained strategic importance as an alternative route for oil transportation amid the risks surrounding the Strait of Hormuz.
  • Traders also remained cautious about potential supply disruptions from the Black Sea region after loading operations were once again suspended at a key export terminal for Kazakh crude oil following fresh attacks targeting oil tankers.
  • Oil prices continue to draw support from geopolitical risks and disruptions to export routes. However, the increase in tanker traffic through the Strait of Hormuz could help cap further gains if it continues without additional incidents.

• Bitcoin:
  • Bitcoin traded near the $64,700 level during the latest session, as heightened volatility continued to influence market performance and investment strategies.
  • Data indicate that Bitcoin declined by approximately 14% during the second quarter, falling from nearly $68,000 to around $58,600 before recovering part of its losses and rebounding toward current levels.
  • This price action reflects an environment of persistent uncertainty, with Bitcoin facing pressure from U.S. monetary policy expectations, institutional fund flows, and ongoing regulatory developments in the United States.
  • Nikolaos Panigirtzoglou, an analyst at JPMorgan Chase & Co., stated that uncertainty in Washington surrounding the Regulatory Clarity Act is weighing on Bitcoin sentiment, amid limited expectations that the legislation will be passed in the near term.
  • The lack of regulatory clarity has contributed to greater caution among investors and institutions, particularly regarding the classification of digital assets, the regulatory framework governing cryptocurrency exchanges, and the issuance of crypto-related products.
  • In a separate development, approximately 594.48 Bitcoin, valued at around $38.3 million, was transferred from single-signature wallets through roughly 500 transactions distributed across three blocks.
  • Some analysts suggested that the activity may have been linked to a flaw in a cryptographic key or in the wallet’s random-number generation mechanism. However, no official confirmation has been provided, and there is currently no evidence linking the incident to the previously identified vulnerability known as MK3.
  • While such transfers may trigger short-term security concerns, they do not necessarily indicate a broader issue with the Bitcoin network itself, particularly in the absence of evidence showing that the problem extends beyond the wallets involved.
  • The $65,000 level remains a key near-term threshold for Bitcoin. Sustained trading above this level could support an attempt to regain bullish momentum, while failure to break and hold above it may result in continued range-bound and volatile price action.

Economic Calendar (GMT+3 / KSA time)

Eurozone

Consumer Price Index (CPI) (Year-over-Year) /July – 12:00

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: Neutral to Bullish
• Timeframe: 30 Minutes
• Current Price: 4,082
• Primary Scenario: Buy on a breakout above 4,098
• Targets: 4,130, then 4,165
• Alternative Scenario: Sell on a break below 4,057
• Targets: 4,023, then 3,990
• Note: Gold is attempting to regain bullish momentum after rebounding from its moving averages. A break above 4,098 would confirm further upside, while a move below 4,057 would signal renewed bearish pressure.

CRUDE OIL

• Trend: Bearish
• Timeframe: 30 Minutes
• Current Price: 83.23
• Primary Scenario: Buy on a breakout above 84.29
• Targets: 86.04, then 87.94
• Alternative Scenario: Sell on a break below 82.19
• Targets: 80.34, then 78.57
• Note: Oil remains under bearish pressure while trading below its moving averages. A break above 84.29 would signal a potential recovery, while staying below this level keeps the downside bias intact.

EURUSD

• Trend: Bullish
• Timeframe: 30 Minutes
• Current Price: 1.1516
• Primary Scenario: Buy on a breakout above 1.1528
• Targets: 1.1556, then 1.1591
• Alternative Scenario: Sell on a break below 1.1496
• Targets: 1.1462, then 1.1429
• Note: The pair remains in an uptrend above its moving averages. Holding above 1.1496 keeps the bullish momentum intact, while a break below this level could trigger a deeper pullback.

GBPUSD

• Trend: Bullish
• Timeframe: 30 Minutes
• Current Price: 1.3454
• Primary Scenario: Buy on a breakout above 1.3481
• Targets: 1.3514, then 1.3550
• Alternative Scenario: Sell on a break below 1.3431
• Targets: 1.3395, then 1.3361
• Note: The broader trend remains positive despite the current pullback. As long as price holds above 1.3431, the decline is viewed as a retest within the uptrend, while a break below this level could signal a deeper correction.

NAS 100

• Trend: Bullish
• Timeframe: 30 Minutes
• Current Price: 28,467
• Primary Scenario: Buy on a breakout above 28,574
• Targets: 28,707, then 28,832
• Alternative Scenario: Sell on a break below 28,281
• Targets: 28,113, then 27,903
• Note: The trend has turned bullish following a breakout above the moving averages and the formation of higher highs and higher lows. Holding above 28,281 supports further upside momentum.