Daily Market Analysis

Latest Economic Insights

Headlines:

• The U.S. dollar is holding near its seven-week low, maintaining recent losses.
• The partial reopening of the Strait of Hormuz has eased inflation concerns.
• Markets have scaled back expectations to just one U.S. Federal Reserve rate hike this year.
• ADP data indicates a notable slowdown in private-sector hiring.
• Gold continues to advance, trading near $4,300 per ounce.
• Brent crude remains stable around $79 per barrel, while WTI crude trades near $75 per barrel.
• Ongoing Houthi threats continue to pose risks to regional shipping and maritime trade.
• Bitcoin is facing weak institutional demand, with bearish pressure persisting.

Fundamental Analysis

• The U.S. dollar Index and Monatery Policy:
  • The U.S. Dollar Index (DXY) traded around the 99.6 level on Thursday, remaining near its lowest point in seven weeks. The dollar came under pressure after a partial reopening agreement for the Strait of Hormuz helped drive oil prices lower, easing concerns over inflation and reducing expectations of further monetary tightening by the Federal Reserve.
  • Iran and Oman reached an agreement to establish a shipping corridor through the Strait of Hormuz, boosting expectations for increased Middle Eastern energy flows and improved global shipping activity in the coming months. However, Tehran emphasized that the arrangement does not constitute a full reopening of the strategically important waterway.
  • The decline in oil prices has led investors to scale back expectations for additional Federal Reserve rate hikes. Markets are now pricing in only one rate increase by year-end, compared with expectations for two hikes as recently as last week.
  • The U.S. dollar faced additional pressure after ADP data showed that the U.S. economy added only about 44,000 private-sector jobs in July, marking the weakest monthly employment growth since January and falling well short of market expectations of 70,000 jobs.
  • The data points to a cooling U.S. labor market, which could reduce the Federal Reserve’s need to continue raising interest rates, particularly if inflationary pressures keep easing alongside lower energy costs.
  • Meanwhile, Federal Reserve Governor Lisa Cook reiterated that she would support further rate hikes if inflation fails to maintain its downward trajectory. She warned that the central bank may have limited room to wait before taking additional action to bring inflation back to its 2% target.
  • Investors are now focused on the release of U.S. initial jobless claims data later today for fresh insights into labor market conditions and to assess whether the recent weakness in hiring represents a temporary slowdown or the beginning of a broader trend.

• Gold:
  • Gold climbed to around $4,300 per ounce during Thursday’s trading session, extending its rally for a fourth consecutive session and bringing its gains to nearly 6% since the start of the week.
  • The precious metal was primarily supported by lower oil prices following an agreement to establish a partial shipping corridor through the Strait of Hormuz, a development that helped ease concerns over inflation and the prospect of further U.S. interest rate hikes.
  • Gold also benefited from a weaker U.S. dollar, which fell to its lowest level in several weeks. A softer dollar typically makes gold more affordable for holders of other currencies, boosting demand for the metal.
  • Additional support came from weaker-than-expected U.S. employment data, which reduced expectations for continued monetary tightening and prompted markets to scale back forecasts for further Federal Reserve rate hikes this year.
  • However, comments from Federal Reserve officials remain a potential headwind for gold. Federal Reserve Governor Lisa Cook reiterated her willingness to support additional rate hikes if inflation remains elevated, suggesting that the sustainability of gold’s recent gains will largely depend on upcoming economic data and developments in energy prices.

• Oil:
  • Oil prices stabilized during Thursday’s trading session after three consecutive sessions of declines, with Brent crude trading near $79 per barrel and West Texas Intermediate (WTI) hovering around $75 per barrel.
  • The recent pullback in oil prices followed an agreement between Iran and Oman to establish a shipping corridor through the Strait of Hormuz, boosting expectations for increased energy flows from the region and easing constraints on tanker traffic.
  • A review of the agreement’s joint statement is currently being finalized, with the shipping corridor expected to remain in place for approximately two to four months. However, Iran stressed that the arrangement does not amount to a full reopening of the strategic waterway.
  • S officials also expressed confidence that a broader agreement with Iran may be within reach. Nevertheless, investors remained cautious about the durability of the de-escalation and whether it will be sufficient to eliminate the risks facing key global shipping routes.
  • Geopolitical risks remain elevated after the Iran-backed Houthi group claimed responsibility for an attack on a Saudi oil tanker in the Gulf of Aden and issued threats against additional vessels operating in the Red Sea.
  • The persistence of these security threats suggests that further declines in oil prices may be limited, as any renewed escalation in the Strait of Hormuz or the Red Sea could quickly restore a geopolitical risk premium to the market and drive crude prices higher once again.

• Bitcoin:
  • Bitcoin came under increasing pressure as institutional demand weakened and elevated activity in the derivatives market persisted, leaving the broader market trend fragile and uncertain.
  • A prominent trader recently opened a 40x leveraged short position worth approximately 1,600 BTC. Four stop-loss orders were subsequently triggered near the $65,000 level, resulting in the partial closure of the position and an estimated loss of roughly $146,000.
  • A remaining short position of around 1,400 BTC remains open, with the liquidation price approaching $64,998. This could contribute to heightened volatility if Bitcoin moves closer to that level, as forced liquidations may amplify short-term price swings.
  • Recent data also pointed to weaker institutional demand during June, as net outflows from Bitcoin exchange-traded funds (ETFs) and Bitcoin-linked treasury vehicles totaled the equivalent of approximately 65,800 BTC. The decline in institutional inflows has reduced a key source of price support for the cryptocurrency.
  • According to data from Glassnode, the Bitcoin market is experiencing its longest capitulation phase since the collapse of FTX in 2022. Momentum remains weak, and there is still no clear evidence that the market has established a definitive bottom.
  • Looking ahead, Bitcoin’s direction is likely to remain closely tied to: U.S. real yields, labor market data, and global liquidity conditions.
  • Softer economic data could support risk assets by strengthening expectations for monetary easing, while stronger-than-expected data may renew selling pressure and weigh on cryptocurrency valuations.

Economic Calendar (GMT+3 / KSA time)

From the United States

U.S. Initial Jobless Claims – 15:30

Federal Reserve Balance Sheet – 23:30

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: 4,256
• Primary Scenario: Buy on a breakout above 4,279.
• Targets: 4,311, followed by 4,346.
• Alternative Scenario: Sell on a break below 4,237.
• Targets: 4,203, followed by 4,170.
• Note: Gold remains in a bullish trend, with support at 4,237 keeping the outlook positive and favoring further upside.

CRUDE OIL

• Trend: Bearish
• Timeframe: 30 Minutes
• Current Price: 76.60
• Primary Scenario: Buy on a breakout above 77.65.
• Targets: 79.37, followed by 81.27
• Alternative Scenario: Sell on a break below 75.51
• Targets: 73.66, followed by 71.89
• Note: Oil remains in a bearish trend while trading below its moving averages, and any rebound below 77.65 is likely to be corrective rather than a trend reversal.

EURUSD

• Trend: Neutral to Bullish
• Timeframe: 30 Minutes
• Current Price: 1.1545
• Primary Scenario: Buy on a breakout above 1.1566.
• Targets: 1.1594, followed by 1.1629.
• Alternative Scenario: Sell on a break below 1.1534.
• Targets: 1.1499, followed by 1.1467.
• Note: The broader outlook remains constructive as long as price continues to hold above the 1.1534 support zone.

GBPUSD

• Trend: Neutral to Bearish
• Timeframe: 30 Minutes
• Current Price: 1.3459
• Primary Scenario: Buy on a breakout above 1.3492.
• Targets: 1.3525, followed by 1.3561.
• Alternative Scenario: Sell on a break below 1.3441.
• Targets: 1.3406, followed by 1.3372.
• Note: Price is trading near its moving averages. A breakout above 1.3492 would restore bullish momentum, while a break below 1.3441 would increase the likelihood of a deeper corrective move.

NAS 100

• Trend: Bearish in the Short Term (Correction Within a Broader Uptrend)
• Timeframe: 30 Minutes
• Current Price: 29,368
• Primary Scenario: Buy on a breakout above 29,587.
• Targets: 29,720, followed by 29,845.
• Alternative Scenario: Sell on a break below 29,294.
• Targets: 29,126, followed by 28,916.
• Note: Despite the broader uptrend, short-term momentum remains weak, and a break above 29,587 is needed to confirm a bullish continuation.