Market Analysis
GOLD
Gold prices have risen back to the EMA200, in line with our expectations. However, the magnitude of the bounce was unexpected, especially following a strong downtrend. This rebound signals renewed weakness in the U.S. dollar, likely driven by disinflationary U.S. economic data (see Dollar section for more details).
From a technical perspective, momentum favors continued buying. The MACD shows rising bullish volume, and the RSI is climbing from oversold territory, suggesting further upside. That said, there is also a possibility that prices are entering a broader consolidation range, which may limit bullish continuation. We maintain a cautiously bullish outlook but will closely monitor for breakout confirmation.
SILVER
Silver remains in a tight consolidation zone, as expected. We continue to avoid directional bias unless actively trading within the range. A clear breakout is needed before engaging in any significant directional setups.
DXY (U.S. Dollar Index)
The dollar is showing renewed weakness, largely due to softer-than-expected inflation data:
- Core CPI rose 0.2%, below the forecasted 0.3%
- Core PPI contracted at -0.4%
- Core Retail Sales rose only 0.1%, versus expectations of 0.3%
These indicators suggest disinflationary pressure, undermining prior expectations based on strong jobs data. While this could pave the way for future rate cuts, uncertainty remains due to Trump’s trade policies and Fed officials’ cautious stance.
According to LSEG data, markets now see a 75.4% chance of a 25 bps cut by September, whereas a July cut was previously priced in. Fed Chair Powell and Governor Barr have both emphasized the need for more data before policy shifts.
Technically, the EMA200 is providing support, and there is potential for a bullish bounce. However, the MACD shows weakening bullish volume, and the RSI continues to reflect residual bullish momentum. A break below the EMA200 could shift sentiment bearish. We wait for a confirmed break in either direction before making any calls.
GBP/USD
The Pound remains consolidated within a tight range. Both the MACD and RSI are neutral, indicating a lack of strong momentum. We stay on the sidelines until a clear directional breakout occurs.
AUD/USD
The Aussie continues to trade sideways, reflecting uncertainty in dollar direction. No strong trend is forming, and we expect consolidation to persist in the near term. No clear trade signal for now.
NZD/USD
The Kiwi also remains in consolidation, but unlike AUD, there are signs of bearish pressure building. Both the MACD and RSI show increasing downside momentum. Still, we await a decisive break before committing to a bearish view.
EUR/USD
The Euro is consolidating around the EMA200, with 1.11747 acting as a key resistance. Price is being squeezed between this level and the EMA, creating a high-tension range. Both MACD and RSI lean slightly bearish, suggesting a potential continuation lower. We await a clear break to confirm direction.
USD/JPY
The Yen continues to strengthen against the dollar, in line with expectations. Both MACD and RSI confirm steady bearish momentum for USD/JPY, implying further downside. This movement aligns with our previous projection for continued yen strength.
USD/CHF
The Franc is seeing renewed selling, following dollar weakness. Both the MACD and RSI indicate increased bearish momentum, suggesting a possible selloff continuation if current levels break further. We now consider the possibility of a more extended correction.
USD/CAD
CAD is showing renewed strength, after failing to break above recent highs multiple times. The MACD signals rising sell volume, while the RSI nears oversold territory, hinting at a potential technical bounce from 1.39410 or the EMA200. For now, price remains trapped in a broader consolidation range. We refrain from directional bias until a clear breakout is observed.
COT Reports Analysis
- AUD – WEAK (4/5)
- GBP – STRONG (5/5)
- CAD – WEAK (5/5)
- EUR – STRONG (4/5)
- JPY – STRONG (5/5)
- CHF – WEAK (3/5)
- USD – MIXED
- NZD – WEAK (3/5)
- GOLD – STRONG (3/5)
- SILVER – STRONG (5/5)
Final Thoughts
Disinflationary data has taken center stage, softening the dollar and supporting a bounce in gold. However, consolidation remains the theme across many forex pairs, awaiting a confirmed directional move.
Traders should stay attentive to economic updates and potential Fed signals. Until more clarity emerges, technical setups should be approached with cautious confirmation, especially around key moving averages and recent support/resistance levels.