Analytics

Gold keeps trending mostly lower these days as the buying pressure surrounding the US dollar prevails. During the previous session, the precious metal extended losses to $1,922 before bouncing from one-month lows, now holding around $1,930 as the prices stay vulnerable.

Should the pressure reemerge any time soon, the bullion may get back below the $1,925 zone that represents the immediate support at this stage. On the weekly timeframes, the technical picture keeps deteriorating as the metal still struggles to regain the 20-SMA. On the upside, the immediate target is now represented by the $1,935 level, followed by the $1,945 zone where the 55-DMA arrives. On the four-hour charts, the XAUUSD pair is holding below the 20-SMA while the RSI looks neutral, painting a mixed technical picture.

$1,920 in focus

The current local bounce is due to some retreat in the greenback. The US dollar came under some pressure today, unable to extend yesterday’s gains. During the previous session, the buck briefly jumped to local highs around 102.80 before retreating partially. Today, the dollar treads water around 102.35, turning slightly downbeat as risk aversion ebbs.

Should the USD index receive a boost from the upcoming US inflation report, gold prices will see fresh losses this week. The metal could also see some pressure from renewed banking fears after Moody’s decision to downgrade nine United States banks. So far, the gold bears are taking a breather amid some improvement in the market’s sentiment that caps dollar’s bullish attempts.

Technically, the XAUUSD pair stays bearish while trading below the key daily SMAs. However, a decisive break below the $1,900 psychological level looks unlikely at this stage. For the time being, the immediate significant support arrives around $1,920, with downside risks limited while above this zone.

Oil prices briefly dipped to 1.5-week lows around $82 a barrel before bouncing strongly during the previous session. On Friday, Brent crude retains a bullish bias, looking to finish the week in positive for the sixth time in a row. The futures regained the $85 mark, albeit refrains from challenging the $86 figure that capped gains earlier in the week.

The recent ascent was buoyed by reports that OPEC leader Saudi Arabia is extending its oil production cut for at least another month. The cut could be extended further and the move is aimed at supporting the stability and balance of oil markets. Russia said that it will also cut its oil exports by 300,000 bpd in September. The news has raised concerns about supply and supported prices.

In other industry news, US crude stockpiles plunged by a record 17.05 million barrels last week, adding to signs of a tightening global market. American inventories are now at the lowest since January. Earlier in the week, the API reported that oil inventories in the US had declined by 15.4 million barrels, which was the largest draw in years.

Bulls remain in the game

Also supporting gains in oil prices, the turned slightly lower after peaking at nearly one-month highs around the 102.85 zone. The bulls were spooked by the 103.00 psychological level that triggered some profit-taking ahead of the US jobs report. However, if the data surprises to the upside, the USD index may resume the ascent ahead of the weekend, thus capping the upside momentum in the oil market.

The technical picture shows that oil bulls remain in the game for the time being, with the $86 barrier in focus. A decisive break above this hurdle would pave the way towards the April high of $87.50, while on the downside, the immediate support now arrives around $84.90.

The bitcoin price is getting steadier after a volatile session on Tuesday. BTCUSD briefly plunged to more-than one-month lows around $28,600 before bouncing strongly to close in the $29,700 area. Earlier today, the coin tried to challenge the $30,000 psychological level but was rejected as sellers reemerged.

In a wider picture, however, the largest cryptocurrency by market capitalization stays range-bound even as volatility in the traditional financial markets picks up. As risk aversion persists now, bitcoin is unlikely to see any sustainable gains in the immediate term. Investor sentiment turned sour after the news that Fitch rating downgraded its US debt rating from the highest AAA rating to AA+, citing the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance.

Downside risks persist

After another failed attempt to overcome the $30,000 barrier, potential buyers could be deterred by the indecisive behavior of the digital currency. As such, downside risks continue to persist at this stage even as the coin looks somehow oversold at the current levels.

In the immediate term, a failure to hold above $29,500 would bring the $29,000 mark back into the market focus. Should the US dollar extend its gradual advance, the cryptocurrency may slip towards the lower end of the local range. However, potential dip buyers are expected to cap the downside pressure eventually.

On the upside, a decisive break above $30,000 is needed for attracting a more sustained demand. A longer-term bullish target arrives in the $31,800 zone that capped the ascent last month. To get back to this region, bitcoin would need some extra impetus.

Oil prices have been trending mostly higher these days, staying afloat amid signs of tightening global supply. Brent crude has settled around three-month highs, holding firmly above the $80 psychological level since late last week.

Oil futures are also buoyed by a weaker US dollar. The greenback came under more intense selling pressure after the Fed meeting outcome on Wednesday. As expected, the central bank raised its policy rate by 25 basis points. At the same time, Powell refrained from confirming another rate hike later in the year, triggering a decline in Treasury yield and weighing on the greenback. The Fed also signaled that the US economy may avoid a recession this year – a positive scenario for oil demand.

After peaking marginally below the $84 level, Brent crude has retreated marginally, holding around $83 on Thursday after a slight decline during the previous session. Traders continue to cheer the news that Saudi Arabia and Russia both recently signaled lower production levels for August.

Further gains ahead

On the negative side, data on Wednesday showed that US crude stockpiles shrank less than expected in the week to July 21. US crude inventories drew by 600,000 barrels last week, compared with estimates for a draw of 2.35 million barrels. A day earlier, the American Petroleum Institute figures had indicated a 1.32-million-barrel build.

In the near term, Brent could see further gains if the dollar stays on the defensive. The key upside target now arrives around the $84 figure, followed by the $86.50 region that capped gains in April. On the downside, the nearest support comes around $82.60 and $82.20. A major support is represented by the $80 psychological level. The path of least resistance remains to the upside as long as oil prices stay above this figure.

Gold prices keep recovering after the recent slide that was capped by the $1,950 zone during the previous session. The XAUUSD pair bounced from the descending 55-DMA to settle around $1,970 as traders cautiously await the Fed decision due later in the day.

The Federal Reserve is widely expected to raise interest rates by 25 basis points to the 5.25%5-5.50% range. The yellow metal now picks strength as market players hope this rate hike will be the last one this year. Against such expectations, the dollar turned lower after the recent ascent, thus supporting the bullion.

Central banks in focus

The US dollar keeps struggling to retain its bullish bias for the second session in a row on Wednesday. The DXY peaked at 101.65 during the previous session and has been on the defensive since then. The greenback holds above the 101.00 mark so far, with traders awaiting the Fed policy meeting outcome. The meeting comes ahead of central bank rate decisions from the ECB on Thursday and the Bank of Japan on Friday. Should risk aversion intensify later in the day, the dollar may regain the 101.40 intermediate barrier on the way to the mentioned high.

In this scenario, gold prices may reverse recent gains to come under a renewed selling pressure after the Fed decision. The XAUUSD pair thus could get back below the 100-DMA, distancing itself from the $2,000 psychological level last seen in mid-May.

As a reminder, late last month, the prices notched multi-month lows around $1,892, to derail the $1,900 psychological level for the first time since March. Since then, however, XAUUSD managed to attract demand, with broader weakness surrounding the US dollar fueling recovery for the yellow metal. Should the pressure reemerge any time soon, the prices could derail the $1,950 zone.

The price of bitcoin has been trending north for the second session in a row, attracting renewed demand after a brief dip to late-June lows around $29,600 earlier in the week. The BTCUSD pair bounced from this support zone to regain the $30,000 psychological level that remains in the market focus.

In a wider picture, however, the largest cryptocurrency by market capitalization has been in consolidation phase for a month already. Of note, while July has traditionally delivered solid gains for the coin, this time the digital currency is on track for its second bearish month in a row.

Reflecting the relative lack of significant industry news of late, sentiment among cryptocurrency traders remains neutral at this stage, suggesting the consolidation could continue for some time in anticipation of fresh drivers, including clues from traditional financial markets.

In equity markets, risk demand looks subdued these days, with investors digesting mixed corporate earnings while awaiting the Federal Reserve meeting due next week. The upcoming event may affect digital currencies along with traditional assets, with traders wondering if the central bank delivers a so-called hawkish hike or signal the end of its policy tightening.

Downside risks persist

In the immediate term, bitcoin needs to hold above $30,000 on a daily/weekly closing basis in order to see more sustained gains next week. However, should cryptocurrencies come under pressure from the Fed, the mentioned July low could be threatened.

On the upside, a decisive break above the $30,500 intermediate barrier would pave the way towards the $31,000 figure, followed by one-year highs registered around $31,800 earlier this month. The technical picture on the daily charts shows that bulls may refrain from decisive trades in the coming days, which implies that downside risks continue to persist for the time being.

The euro extends is bullish run this week even as the dollar tries to stabilize around more than one-year lows registered below 100.00. The USD index derailed the psychological support last week and has been holding below it since then, struggling to attract demand even at April 2022 lows.

As such, the shared currency moved above 1.1250 to make a fresh 17-month peak around 1.1275 on Tuesday. After peaking, EURUSD has retreated marginally while staying positive on the daily charts. The euro remains resilient ahead of tomorrow’s Eurozone CPI. The final reading for June is expected to come in at 5.5% year-on-year.

Then, the market focus would shift towards next week’s central banks’ meetings. The Fed is widely expected to raise rates by 25 basis points after a pause in June. The European Central Bank will also be meeting next week and the interest rate market has a 25-basis point hike priced in.

Fed and ECB will set the tone next week

Depending on the tone from monetary authorities, the EURUSD pair may extend the rally or correct lower. Should the Fed express a more hawkish rhetoric than expected, the oversold greenback will bounce across the market.

In the immediate term, the common currency may refrain from another major breakout as Treasury yields have been relatively steady these days after last week’s losses in the aftermath of weak US CPI and PPI gauges. The dollar has also paused in its bearish run, which implies a possible upside correction if the 99.60 support withstands the pressure.

EURUSD is holding around 1.1250, challenging the 100-momth SMA that could cap further gains, especially as the daily RSI keeps signaling overbought conditions. On the downside, the nearest significant support now arrives around 1.1200, followed by the 1.1140 region. Should the ascent continue, the pair will target 1.1300.

Gold climbed this week due to a weaker dollar that has been staying under pressure for the seventh session in a row on Friday. The USD index derailed the 100.00 psychological level for the first time since April 2022 to notch fresh long-term lows around 99.60, finishing the worst week in over a year.

The precious metal is buoyed by growing evidence that the Fed may be close to ending its aggressive rate-hiking cycle as US inflation slows. After Wednesday’s consumer price index data, June’s producer price index rose less than anticipated as well, fueling speculation that the Federal Reserve could pause rate hikes after this month.

By the way, gold advanced despite upbeat risk sentiment across the financial markets. Wall Street stocks extended the rally on Thursday, with both the S&P 500 and the Nasdaq Composite closingat their highest levels in over a year as investors continued to cheer signs of cooling US inflation.

20-week SMA could cap gains

The yellow metal extended gains to one-month highs around $1,963 before retreating marginally on Friday as the buying pressure has eased somehow ahead of the weekend. Still, the bullion stays above both the 20- and 100-DMAs, finishing the week with solid gains.

On the weekly timeframes, gold is back around the 20-SMA, but is yet to overcome this barrier as investors may opt to take some profit after the recent ascent, especially as the dollar’s decline has slowed somehow, suggesting the struggling US currency may switch into recovery mode following the aggressive sell-off.

Should the precious metal continue to advance in the near term, the next hurdle could be expected around $1,973, followed by the $1,983 zone that capped gains last month. On the downside, the nearest support arrives at $1,953 where the mentioned 100-DMA lies.

Oil prices have been trending mostly higher since late last month, extending recovery from local lows seen below $72 a barrel. Brent crude now targets the $80 psychological level, trading slightly positive on Wednesday after peaking at $79.80 for the first time since early May.

The surge in oil prices is supported by moves in the foreign exchange market where the US dollar keeps losing ground across the board, refreshing two-month lows as traders continue to take profit after the recent ascent above 103.50. The USD index dipped to 101.35 before bouncing marginally in recent trading. Depending on the inflation data, the greenback could extend the decline or switch into recovery mode. So far, downside risks continue to dominate the market, with the 101.00 mark in focus.

Also, oil traders see demand outpacing supply, expecting oil market tightening despite higher interest rates in the United States. As a reminder, according to the IEA, global oil demand to grow by 2.4 million barrels per day this year, rising to 102.3 mb/d.

$80 in focus

In industry news, according to the API, the U.S. crude inventory balance grew by more than 3 million barrels during the week ended July 7 after a crude draw of 4.382 million barrels in the prior week. The Institute also reported a gasoline inventory build of 1 million barrels and a distillate stock build of nearly 3 million barrels. Despite a bearish report, oil futures stayed afloat, continuing the ascent.

However, Brent may need an extra catalyst to challenge and overcome the $80 level in the near term. In case of rejection, the immediate meaningful support could be expected around $78.65, followed by $77.70. In a wider picture, oil stays within a broader bearish trend for over a year.

Oil prices turned slightly higher after the recent recovery that has brought Brent crude to the $77 handle. A failure to challenge this level attracted some sellers but the pressure looks limited so far even as risk sentiment keeps deteriorating in the global financial markets.

Earlier in the week, oil prices rose on the news that Saudi Arabia and Russia agreed to make additional cuts to oil supply citing global economic slowdown that darkens the outlook for energy demand. Saudi Arabia said it would extend a cut of 1 million barrels a day in its oil production at least until the end of August. As a reminder, the cut was initially planned to last for the month of July. In turn, Russia would voluntarily cut supplies by 500,000 barrels per day next month by cutting exports.

In other industry news, the American Petroleum Institute data showed on Wednesday that crude oil inventories in the United States decreased last week by nearly 4.4 million barrels, after falling by 2.4 million barrels in the week prior. At the start of the week, the Department of Energy reported that it sold another 1.4 million barrels of crude in the week ending June 30 from the SPR.

A break above $80 is unlikely

On the negative side, the Chinese Caixin PMI data revealed a significant decline in both the composite and services PMI number, ramping up potential recessionary fears. Despite this, global central banks are expected to continue on their hiking cycles, adding to the pressure in energy markets.

Brent crude has been trending lower this year, albeit the pressure has weakened somehow since last month. After finding a bottom around $71.50, the futures are holding above $75 these days. Still, a decisive break above $80 is unlikely at this stage as there is still elevated uncertainty over the outlook for energy demand even as recession worries have receded somehow recently.