Daily Market Analysis

Latest Economic Insights

Headlines:

• The U.S. dollar edges higher, trading near 99.9 ahead of the release of key U.S. inflation data.
• Markets remain divided over the likelihood of a Federal Reserve rate hike in September.
• Fed officials’ remarks keep inflation concerns in focus.
• Gold holds steady near $4,370 per ounce as investment demand remains resilient.
• Ongoing purchases by the People’s Bank of China continue to provide support for gold prices.
• Oil holds gains amid uncertainty over a Strait of Hormuz deal.
• Brent trades near $89, while WTI hovers around $83 per barrel.
• Bitcoin trades around $65,000 as on-chain activity remains subdued.

Fundamental Analysis

• The U.S. dollar Index and Monatery Policy:
  • The U.S. Dollar Index (DXY) edged higher toward 99.9 during Wednesday’s session, posting modest gains as investors awaited key U.S. inflation data that could play an important role in determining the Federal Reserve’s next move on interest rates.
  • Market focus is primarily on today’s U.S. Consumer Price Index (CPI) report, followed by Thursday’s Producer Price Index (PPI) release. The readings will help determine whether inflationary pressures remain strong enough to justify a rate hike at the September meeting.
  • Markets remain divided over whether the Federal Reserve will raise interest rates by 25 basis points in September, after keeping rates unchanged in July, while elevated oil prices continue to strengthen the case for a more hawkish stance on inflation.
  • Chicago Fed President Austan Goolsbee said the central bank is currently more concerned about inflation remaining elevated than about the risks posed by a potential weakening in the labor market, underscoring the Fed’s continued focus on price stability.

• Geopolitical Developments:
  • On the geopolitical front, investors continued to assess the prospects of a U.S.-Iran agreement to reopen the Strait of Hormuz, following mixed signals from the parties involved.
  • Pakistan’s defense minister said Washington and Tehran were nearing some form of agreement on the strait, while reports indicated that talks between Iran and Oman had entered an advanced stage.
  • However, these positive signals followed a tougher stance from U.S. President Donald Trump, who demanded that Iran pay compensation for victims of attacks linked to Tehran, after Iran itself called for compensation over U.S. and Israeli military operations.

• Gold:
  • Gold held near $4,370 per ounce during Wednesday’s session after a volatile start to the week, as markets awaited U.S. inflation data that could shape expectations for the Federal Reserve’s interest-rate path.
  • The precious metal continued to benefit from solid investment demand and central-bank purchases, particularly from China, as institutions increased their gold holdings to hedge against volatility across other asset classes.
  • The People’s Bank of China added around 20 tonnes of gold in July, following purchases of approximately 15 tonnes in June, marking its largest monthly increase since October 2023.
  • Chinese institutional investors also maintained strong demand for gold-backed exchange-traded funds (ETFs), helping gold remain resilient despite the ongoing risk of higher U.S. interest rates.
  • Gold prices could come under pressure if inflation data exceeds expectations and increases the likelihood of a September rate hike, while a softer-than-expected reading could support the metal by weighing on the U.S. dollar and Treasury yields.
  • Developments surrounding the Strait of Hormuz also remain an important factor. A potential agreement could ease energy-related inflation risks, while stalled negotiations could support oil prices and reignite pressure on the Fed’s rate outlook.

• Oil:
  • Oil prices held onto their gains during Wednesday’s session, with Brent crude trading near $89 per barrel and West Texas Intermediate (WTI) holding above $83 per barrel after four consecutive sessions of gains.
  • Investors continued to assess mixed signals surrounding a potential U.S.-Iran agreement to reopen the Strait of Hormuz. Reports pointed to progress in talks between Iran and Oman, while Pakistan indicated that Washington and Tehran were nearing some form of understanding over the waterway.
  • However, fresh demands from both sides continue to complicate the prospects of a swift resolution, particularly after President Trump called for compensation related to casualties from the conflict, while Iran has demanded compensation for military operations carried out inside the country.
  • On the supply side, industry data showed that U.S. crude oil inventories increased by approximately 9.1 million barrels last week, marking the largest weekly build since February.
  • The sharp rise in inventories represents a potential headwind for oil prices, although risks surrounding the Strait of Hormuz and ongoing geopolitical uncertainty continue to provide support.
  • The outlook for oil remains closely tied to the outcome of the negotiations. A deal to fully reopen the strait could reduce the geopolitical risk premium, while a breakdown in talks could push prices back toward higher levels.

• Bitcoin:
  • Bitcoin traded near $65,000 amid a cautious market tone, as on-chain data pointed to weakness across several activity metrics and continued volatility in institutional flows.
  • Spot Bitcoin ETFs recorded net outflows of approximately $144.7 million on Monday, signaling continued caution among some institutional investors.
  • Meanwhile, blockchain data showed that active addresses, transaction volumes, and network fees remained close to their lowest levels, while profitability stayed subdued, with realized losses exceeding realized gains.
  • Analyst Benjamin Cowen expects Bitcoin could see further downside before entering a new bullish phase, with a potential cycle bottom forming around October, while low volatility may persist through August and September.
  • On the supply side, MicroStrategy sold approximately 1,690 Bitcoin for around $108.6 million, adding liquidity to the market and potentially affecting the short-term supply-demand balance.
  • The $65,000 area remains a key level for Bitcoin. The cryptocurrency needs to regain momentum and stronger institutional demand to confirm a sustained uptrend, while continued weak activity and net outflows could keep downward pressure on prices.

Economic Calendar (GMT+3 / KSA time)

From the United States:

• Consumer Price Index (CPI) (YoY) July — 15:30
• CPI (MoM) July— 15:30
• Core CPI (MoM) July— 15:30
• U.S. Crude Oil Inventories — 17:30

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: 4,402.62
• Primary Scenario: Buy on a breakout above 4,416.46
• Targets: 4,448.24, then 4,483.38
• Alternative Scenario: Sell on a break below 4,374.95
• Targets: 4,340.77, then 4,308.03
• Note: Gold maintains its bullish structure above the moving averages, while a breakout above 4,416.46 would support further upside toward higher levels.

CRUDE OIL

• Trend: Bullish
• Timeframe: 30 minutes
• Current Price: 84.48
• Primary Scenario: Buy on a breakout above 85.93
• Targets: 87.65, then 89.55
• Alternative Scenario: Sell on a break below 83.79
• Targets: 81.94, then 80.17
• Note: The broader trend remains bullish, with price trading above its moving averages. Holding above 83.79 supports the continuation of the positive structure.

EURUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current Price: 1.15331
• Primary Scenario: Buy on a breakout above 1.15553
• Targets: 1.15832, then 1.16185
• Alternative Scenario: Sell on a break below 1.15230
• Targets: 1.14887, then 1.14559
• Note: The pair is trading below its moving averages amid continued downside pressure. A breakout above 1.15553 would be required to reverse the short-term momentum.

GBPUSD

• Trend: Sideways with a bullish bias
• Timeframe: 30 minutes
• Current Price: 1.35030
• Primary Scenario: Buy on a breakout above 1.35244
• Targets: 1.35573, then 1.35937
• Alternative Scenario: Sell on a break below 1.34882
• Targets: 1.34527, then 1.34188
• Note: The pair is moving sideways above the long-term moving average, while a breakout above 1.35244 would confirm a return of bullish momentum.

NAS 100

• Trend: Sideways with a bullish bias
• Timeframe: 30 minutes
• Current Price: 29,616.61
• Primary Scenario: Buy on a breakout above 29,702.89
• Targets: 29,835.65, then 29,960.85
• Alternative Scenario: Sell on a break below 29,409.77
• Targets: 29,241.80, then 29,032.03
• Note: Nasdaq is trading within a sideways range. A breakout above 29,702.89 would support further upside, while a break below 29,409.77 would revive selling pressure.