United Overseas Bank’s (UOB) Quek Ser Leang highlights a sharp GBP/USD advance to 1.3397 and a firm close at 1.3391. Intraday, Leang sees scope for further gains toward 1.3410, though 1.3445 may stay out of reach. On a 1–3 week horizon, a break above 1.3410 could open 1.3445, while only a fall below 1.3300 would negate the positive Pound bias.
Pound rally faces layered resistance"24-HOUR VIEW: GBP rose to 1.3380 last Friday and then pulled back. When it was at 1.3345 yesterday, we highlighted the following: “While there is scope for GBP to pull back further, any decline is likely to be contained within a 1.3320/1.3375 range. In other words, GBP is unlikely to break clearly below 1.3320.” The subsequent price movements did not unfold as expected. GBP dipped to 1.3329 before staging a sharp advance to 1.3397. GBP closed on a firm note at 1.3391 (+0.29%). Strong momentum suggests further GBP strength toward 1.3410. A break above this major resistance is not ruled out, but based on the prevailing momentum, the next resistance at 1.3445 is likely out of reach. To sustain the momentum, GBP must hold above 1.3350, with minor support at 1.3370"
"1-3 WEEKS VIEW: We turned positive on GBP last Tuesday (30 Jun, spot at 1.3255), indicating that “while GBP could rebound further, it is currently unclear whether any advance can reach 1.3355.” After GBP broke above 1.3355, we highlighted on Friday (03 Jul, spot at 1.3345) that “the advance is overbought, but it could rise further and test 1.3410.” Yesterday, GBP rose to a high of 1.3397. A break above 1.3410 will not be surprising, and it could lead to a move to 1.3445. Overall, only a breach of 1.3300 (‘strong support’ previously at 1.3280) would indicate that GBP is not rising further."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The British Pound (GBP) ticks lower to near 1.3380 against the US Dollar (USD) during the European trading session on Tuesday. The GBP/USD pair edges down as the US Dollar gains slightly; however, the Cable is broadly upbeat.
At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.1% higher to near 100.90.
The US Dollar is expected to trade cautiously as investors await the Federal Open Market Committee (FOMC) minutes of the June policy meeting, which will be released on Wednesday. Investors will closely read FOMC minutes to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook.
In the United Kingdom (UK), firm hopes that ongoing fiscal principles will continue despite the leadership transition are supporting the British Pound. Andy Burnham, the newly elected Member of Parliament and Mayor of Greater Manchester, is the front-runner for UK leadership after Prime Minister (PM) Keir Starmer’s resignation.
GBP/USD technical analysis
GBP/USD trades at around 1.3380 at press time. The Cable has shown a stalwart rally after attracting significant buying interest near 1.3140 two weeks back. The pair holds a constructive near-term tone as it remains above the 20-day Exponential Moving Average (EMA) at 1.3320.
Momentum is mildly positive, with the Relative Strength Index (14) at 55.7, hinting that buyers retain control without the market appearing overstretched.
On the topside, the next key hurdle is the downward-sloping resistance trend line, which comes in around 1.3526 and caps the broader recovery. On the downside, initial support is seen at the 20-day EMA at 1.3320 ahead of the June low near 1.3140.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling FAQs The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
HomeTechnical AnalysisIntraday Analysis 07.07.2026 Dax sets a new record
Intraday analysis covering USDCHF , EURJPY , and GER40(The DAX) , highlighting recent price movements, key technical levels, and short-term momentum shifts across major markets.
USDCHF finds support
The dollar strengthened across the board as risk appetite remained volatile.
The pair has seen price action slide in recent sessions before finding support. A move below 0.8020 would keep bears in the game by prompting buyers to reconsider after the bearish downturn for most of last week. 0.8130 is a fresh target ahead and could then lead towards a new high at 0.8180. EURJPY hits resistance
The euro remains precarious after jumping over 100 pips, as sentiment remains upbeat, with the price grinding the mid-185.00 region.
The pair will need to clear 185.65 to maintain the current momentum towards 186.00. Buyers will be worried if the overall sentiment turns bearish, should there be a heavy rejection. On the downside, 185.00 and then 184.20 need to be broken before sellers can realistically hope for a full reversal. GER40 hits another higher high
GER40(The DAX) remains bullish even though prices have hit a slight retracement.
A move away from the psychological level of 26000 has pushed the index into consolidation mode. After the RSI moved towards the neutral area, if the bearish momentum remains intact, a deeper retracement could send the price to 25500. On the upside, the recent peak above 25900 is a firm obstacle to keep the continuation going.
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GBP/USD started a recovery wave and surpassed the 1.3320 resistance. A key contracting triangle is forming with support at 1.3290 on the 4-hour chart. EUR/USD struggled to extend its recovery wave above the 1.1475 resistance. WTI Crude Oil prices are under pressure below the $72.50 pivot level. GBP/USD Technical Analysis The British Pound started a recovery wave above 1.3200 against the US Dollar. GBP/USD gained pace after it settled above 1.3250.
Looking at the 4-hour chart, the pair surged above the 100 simple moving average (red, 4-hour) and 1.3320. However, the bears defended the 1.3385 resistance and the 200 simple moving average (green, 4-hour).
A high was formed at 1.3384, and the pair started consolidating gains. There was a minor decline below 1.3350. If there is another decline, the pair might find support near 1.3290. Besides, there is a key contracting triangle forming with support at 1.3290.
The first major support could be near 1.3250. A downside break and close below 1.3250 might send the pair toward 1.3220. Any more losses could open the doors for a test of 1.3150.
On the upside, the bears might remain active near 1.3385. The next major resistance might be 1.3400. A close above 1.3400 could spark a sharp increase. In the stated case, the bulls could aim for a move to 1.3500.
Looking at EUR/USD, the bulls attempted a recovery wave, but they need a daily close above 1.1475 for upside continuation.
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Silver price (XAG/USD) is down 1.35% to near $61.00 during the Asian trading session on Tuesday. The white metal extends its correction as oil prices see some buying interest, following headlines that Iran fired at least two missiles at commercial ships transiting through the Strait of Hormuz, a critical chokepoint to almost one-fifth of global energy supply.
Iran’s attack on commercial ships has renewed fears of energy supply disruption, whose impact on global inflation has already been witnessed by market participants in the past few months amid the war between the United States (US)-Israel and Iran.
The Silver price underperformed during the Middle East war, as the increase in inflationary pressures due to rising energy prices prompted fears of interest rate hikes by global central banks.
Higher interest rates bode poorly for non-yielding assets, such as Silver.
Going forward, the major trigger for the Silver price will be the release of the Federal Open Market Committee (FOMC) minutes of the June policy meeting on Wednesday. Investors will pay close attention to FOMC minutes to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook.
In the June policy meeting, the Fed decided to leave interest rates unchanged in the range of 3.50%-3.75% and signaled that the central bank will refrain from delivering forward-looking remarks on policy rates at the current policy juncture.
Silver technical analysis
XAG/USD trades lower at around $61.50, maintaining a bearish near-term bias as spot holds beneath the 20-day exponential moving average (EMA) at $63.35. The downside tone is reinforced by the Relative Strength Index (RSI) hovering near 41, which suggests persistent but not extreme selling pressure as rebounds continue to be capped by the nearby EMA barrier.
On the topside, immediate resistance is located at the 20-day EMA at $63.35, and a sustained break above this level would be needed to ease the current bearish pressure and open the way for a more constructive recovery phase. Looking down, the psychological level of $60.00 will be the key support zone; below that, the Silver price could revisit the seven-month low of $55.63.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Sterling’s rally has been about more than better sentiment toward the UK. It has been driven by the disappearance of one of the market’s biggest bearish trades. As political uncertainty faded following the resolution of Labour’s leadership transition, investors who had built sizeable short Sterling positions found themselves on the wrong side of the market. That process is still unfolding, helping explain why Sterling has outperformed most clearly in the crosses rather than against the Dollar alone.
Before UK Prime Minister Keir Starmer’s resignation, political uncertainty encouraged investors to build substantial bearish positions against Sterling. The decisive outcome of the Makerfield by-election on June 18 removed much of that uncertainty far more quickly than markets had anticipated. For traders who had sold Sterling on expectations of a prolonged political transition, the rationale for the trade weakened almost overnight.
What followed was not necessarily a wave of fresh optimism toward the UK economy but a mechanical process of buying Sterling back. Société Générale estimates speculative accounts were still holding short positions equivalent to 35.5% of open interest as of late June. Although some of those positions have already been unwound, the bank argues the remaining short base is still large enough to support further gains as investors continue to close bearish trades.
At the same time, the fundamental backdrop has quietly become more supportive. Bank of England Governor Andrew Bailey has pushed back against expectations for early policy easing, suggesting interest rates may need to stay restrictive to ensure the inflationary effects of this year’s oil shock fully dissipate. With Bank Rate still at 3.75%, Sterling retains a sizeable yield advantage over the Swiss Franc (0.00%), Euro (2.25%) and Japanese Yen (1.00%), providing an additional incentive for investors to hold the currency.
Those macro and positioning forces are now converging at a technically significant moment. GBP/CHF has resumed its advance from the March low at 1.0281 and is approaching the important resistance zone around 1.08. Provided support at 1.0674 holds, the path of least resistance continues to point higher.
The importance of this zone extends well beyond a simple breakout. A decisive move above 1.0797 would break the medium-term downtrend that has been in place since the 2024 peak at 1.1675. A subsequent break above 100% projection of 1.0821 to 1.0674 from 1.0468 at 1.0861 would reinforce the view that the recovery has transitioned from a corrective rebound into a new impulsive advance, increasing the likelihood of an acceleration toward 161.8% projection at 1.1104.
The longer-term technical backdrop is also improving. GBP/CHF has reclaimed its 55 W EMA (now at 1.0689) and successfully defended the major low at 1.0183 established in 2022. Combined with the ongoing unwinding of Sterling shorts and the Bank of England’s relatively restrictive policy stance, the technical picture suggests Sterling’s recent strength could mark the beginning of a broader medium-term reversal rather than simply another short-lived rebound.
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ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
Gold prices fell in Malaysia on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 541.60 Malaysian Ringgits (MYR) per gram, down compared with the MYR 545.61 it cost on Monday.
The price for Gold decreased to MYR 6,316.76 per tola from MYR 6,363.91 per tola a day earlier.
Unit measure
Gold Price in MYR
1 Gram
541.60
10 Grams
5,415.73
Tola
6,316.76
Troy Ounce
16,845.76
FXStreet calculates Gold prices in Malaysia by adapting international prices (USD/MYR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices fell in India on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 12,665.01 Indian Rupees (INR) per gram, down compared with the INR 12,769.91 it cost on Monday.
The price for Gold decreased to INR 147,722.20 per tola from INR 148,945.80 per tola a day earlier.
Unit measure
Gold Price in INR
1 Gram
12,665.01
10 Grams
126,650.90
Tola
147,722.20
Troy Ounce
393,926.10
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
The AUD/USD retreats slightly from the 0.6960 area, or a two-week high, touched during the Asian session on Tuesday, and, for now, seems to have snapped a three-day winning streak. The intraday downtick, however, lacks bearish conviction, warranting caution before confirming that a one-week-old recovery move from a three-month low has run out of steam.
From a technical perspective, the AUD/USD pair, so far, has been struggling to make it through the 38.2% Fibonacci retracement level of the November 2025-May 2026 rally. Furthermore, mixed momentum oscillators make it prudent to wait for a sustained move beyond the said barrier before positioning for an extension of the recent bounce from the very important 200-day Simple Moving Average (SMA) support near 0.6870.
In fact, the Moving Average Convergence Divergence (MACD) has turned slightly positive, hinting at a slight improvement in the upside momentum. However, the Relative Strength Index (RSI) near 42 suggests only modest directional pressure, consistent with a consolidative bias around current levels, warranting some caution for aggressive bullish traders as renewed tensions in the Strait of Hormuz support the US Dollar.
Meanwhile, initial support emerges at the 50% retracement at 0.6853, ahead of a deeper structural floor at the 61.8% Fibo. near 0.6752, with 0.6608 and 0.6425 marking subsequent retracement and cycle-low supports if selling extends. On the topside, a break above the 38.2% Fibo. at 0.6954 would open the way toward the 23.6% retracement barrier at 0.7079, while the cycle high around 0.7282 stands as a more distant objective should bullish momentum gain traction.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
Australian Dollar Price Last 7 Days The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies last 7 days. Australian Dollar was the strongest against the Canadian Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.13%-0.99%-0.10%0.04%-0.83%-0.85%-0.25%EUR0.13%-0.88%0.04%0.15%-0.71%-0.66%-0.12%GBP0.99%0.88%0.93%1.01%0.15%0.21%0.75%JPY0.10%-0.04%-0.93%0.17%-0.69%-0.64%-0.18%CAD-0.04%-0.15%-1.01%-0.17%-0.87%-0.80%-0.28%AUD0.83%0.71%-0.15%0.69%0.87%-0.01%0.59%NZD0.85%0.66%-0.21%0.64%0.80%0.01%0.51%CHF0.25%0.12%-0.75%0.18%0.28%-0.59%-0.51% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Gold prices fell in Pakistan on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 36,853.14 Pakistani Rupees (PKR) per gram, down compared with the PKR 37,167.04 it cost on Monday.
The price for Gold decreased to PKR 429,847.80 per tola from PKR 433,509.00 per tola a day earlier.
Unit measure
Gold Price in PKR
1 Gram
36,853.14
10 Grams
368,521.50
Tola
429,847.80
Troy Ounce
1,146,262.00
FXStreet calculates Gold prices in Pakistan by adapting international prices (USD/PKR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold (XAU/USD) maintains its offered tone heading into the European session on Tuesday, albeit it holds above the $4,100 mark. Crude oil prices edge higher amid renewed tensions in the Strait of Hormuz, reviving inflationary concerns. This, in turn, triggers a fresh leg up in US Treasury bond yields, offering some support to the US Dollar (USD) and weighing on the non-yielding yellow metal for the second straight day. However, receding US Federal Reserve (Fed) rate-hike bets could act as a headwind for the Greenback and limit the downside for the bullion.
Tensions in the Strait of Hormuz remain high as Tehran attempts to cement strategic control and aims to collect fees from ships transiting through the critical waterway. Despite strong opposition from the US, Iran insists that the fees are for security, vessel supervision, and environmental protection, rather than tolls. Adding to this, a maritime agency reported that an oil tanker was struck by an unidentified projectile while transiting through the strait, complicating a fragile US-Iran peace deal and offering some support to crude oil prices.
Meanwhile, the soft US Nonfarm Payrolls (NFP) report for June tempered market bets that the US central bank will raise borrowing costs. In fact, traders shifted expectations from one to two Fed rate increases in 2026 to between zero and one hike. This keeps the USD bulls on the defensive and might hold back traders from placing aggressive bearish bets around the Gold. On the economic data front, the US ISM Services PMI eased to 54.0 in June from 54.5 in the previous month, matching consensus estimates and doing little to impress the USD bulls.
Investors, however, seem hesitant to place aggressive bets and opt to wait for more cues about the Fed's policy path. Hence, the focus now shifts to the release of the FOMC Minutes on Wednesday. Apart from this, geopolitical developments would drive the USD demand and provide some impetus to the Gold. In the meantime, the aforementioned fundamental backdrop makes it prudent to wait for strong follow-through selling before confirming that the recent recovery move from the year-to-date low, touched last week, has run out of steam.
XAU/USD daily chart
Gold could accelerate the intraday fall once the $4,100 mark is brokenThe XAU/USD pair keeps a bearish near-term bias below the 200-day Simple Moving Average (SMA) at $4,489.97 and within a descending channel. However, the Moving Average Convergence Divergence (MACD) indicator has turned positive, with the MACD line above the signal line and an expanding positive histogram. This suggests recovering bullish momentum, though not yet strong enough to challenge the dominant overhead structure. Moreover, the Relative Strength Index (RSI) at 44.16 remains below the 50 line, hinting at a still neutral to mildly bearish tone despite the recent bounce.
Meanwhile, $4,100 could act as a tentative floor ahead of more meaningful support at the channel bottom near $3,844.34, where a deeper slide would meet firmer demand. On the topside, immediate resistance appears at the top boundary of the descending channel near $4,296.64, where any recovery is likely to stall initially. This is followed by the 200-day SMA at $4,489.97 and a higher structural barrier near $4,572.41.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Interest rates FAQs Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
Gold prices fell in United Arab Emirates on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 487.41 United Arab Emirates Dirhams (AED) per gram, down compared with the AED 491.77 it cost on Monday.
The price for Gold decreased to AED 5,685.05 per tola from AED 5,735.89 per tola a day earlier.
Unit measure
Gold Price in AED
1 Gram
487.41
10 Grams
4,874.10
Tola
5,685.05
Troy Ounce
15,160.17
FXStreet calculates Gold prices in United Arab Emirates by adapting international prices (USD/AED) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices fell in Philippines on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 8,145.54 Philippine Pesos (PHP) per gram, down compared with the PHP 8,221.67 it cost on Monday.
The price for Gold decreased to PHP 95,009.77 per tola from PHP 95,895.99 per tola a day earlier.
Unit measure
Gold Price in PHP
1 Gram
8,145.54
10 Grams
81,456.93
Tola
95,009.77
Troy Ounce
253,365.10
FXStreet calculates Gold prices in Philippines by adapting international prices (USD/PHP) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices fell in Saudi Arabia on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 498.78 Saudi Riyals (SAR) per gram, down compared with the SAR 502.87 it cost on Monday.
The price for Gold decreased to SAR 5,817.62 per tola from SAR 5,865.37 per tola a day earlier.
Unit measure
Gold Price in SAR
1 Gram
498.78
10 Grams
4,987.73
Tola
5,817.62
Troy Ounce
15,513.63
FXStreet calculates Gold prices in Saudi Arabia by adapting international prices (USD/SAR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
British Pound gains as easing Fed hike bets weigh on US DollarGBP/USD continues its winning streak for the ninth consecutive day, trading around 1.3390 during the Asian hours on Tuesday. The currency pair rises as the US Dollar (USD) faces headwinds as market participants scale back expectations for Federal Reserve (Fed) rate hikes this month and in September. This shift in sentiment followed a cooling employment report that revealed fewer jobs added across April, May, and June than Wall Street had anticipated.
Furthermore, a recent drop in crude oil prices, driven by an OPEC+ production boost and a US-Iran peace deal, has alleviated broader inflationary pressures, softening the urgency for an aggressive Fed policy outlook. Read more...
Pound Sterling rallies into its own coronationGBP/USD has quietly put together eight consecutive higher daily closes, a grind from near 1.3150 that has delivered the pair directly onto its 200-day Exponential Moving Average (EMA), with the 50-day EMA just beneath it and the 1.3400 handle immediately overhead. Monday added another modest gain: Cable based near 1.3350 through the London morning, then climbed all afternoon to stall just shy of 1.3400.
The interesting part is what did not stop it. A hawkish Federal Reserve (Fed) governor was on the wires mid-afternoon, US services data came in warm enough to keep the hike debate alive, and the pair rallied through all of it, which suggests Monday was less about fresh good news for the Pound and more about a Dollar that has run out of new arguments. Read more...
The Mexican Peso remains one of JP Morgan's preferred emerging-market currencies, with the bank arguing that improving domestic growth, attractive carry and resilient trade flows continue to support MXN.
USD/MXN is forecast to ease from current levels, with JP Morgan targeting 17.35 by September 2026, 17.30 by December, 17.30 by March 2027 and 17.30 by June 2027.
JP Morgan analysts say Mexico's economic outlook has improved after a weak start to the year.
"Some green shoots point to a more benign picture for growth in 2H26."
The bank notes that stronger-than-expected April GDP, a rebound in construction activity and robust services growth have prompted it to lift its 2026 GDP forecast from 1.0% to 1.2%.
JP Morgan also expects Banxico to keep its benchmark interest rate unchanged at 6.5% over the coming year as inflation remains comfortably within target.
The bank believes the successful conclusion of the latest USMCA review also removes an important source of uncertainty for investors.
Rather than reopening the agreement, the US, Canada and Mexico agreed to continue negotiations under the existing framework, preserving Mexico's privileged access to US markets.
Carry Trade Still Supports the Peso
JP Morgan argues the Peso's biggest strength remains its attractive yield.
"The structural view for MXN remains constructive, anchored by decent volatility-adjusted carry."
With market volatility easing after the Middle East conflict and Mexico's balance of payments remaining resilient, the bank believes the Peso should continue attracting international capital.
Primary gold mine supply growth has remained subdued over the past several years owing to rising costs of mine development and aging ore deposits. Silver mine production growth has also been limited although a good portion of silver production is a by-product of the output of other base metals such as copper, lead, and zinc.
The amount of recycled gold and silver supplied by the market is sensitive to precious metal prices, although there are other factors that determine recycling volumes (for example, the demand for gold bars, coins and exchange-traded funds, and for industrial users to consume silver.)
Silver has its own fundamental profile as it is used in many industrial fabrication processes (solar cell applications and other electrical uses being the most important examples.) This silver demand component has expanded rapidly in parallel with the transition to renewable energies and the electrification of industrial processes.
So in short the longer term price picture for gold and silver rests on central bank demand, slow new mine supply growth, and industrial demand (particularly for silver.) Other fundamental factors, for instance the level of debt, inflation, and fiscal trends, can impact the prices over time.
Gold Spot Holds $4,127 – Downward Trendline Breakout on 4h
The NZD/USD exchange rate pulled back a bit on Tuesday, reacting to more weak US macro data, and as traders refocused on the upcoming Reserve Bank of New Zealand (RBNZ) interest rate decision. It retreated to 0.5693 from last week’s high of 0.5725.
The New Zealand dollar, commonly known as kiwi, retreated as traders waited for the upcoming RBNZ interest rate decision. Market participants expect that the Anna Breman-led bank will decide to hike interest rates by 0.25%.
The bank will do that to combat elevated inflation. Recent data showed that the headline CPI rose 3.1% in the first quarter, remaining above its target of 2.0%, as energy prices jumped.
Ideally, the rate hike should be bullish for the kiwi as it will make it more attractive to investors. However, it could also be bearish, especially if the bank signals that it will not hike again since crude oil and natural gas prices are falling during the US-Iran ceasefire.
This view likely explains why New Zealand’s bond yields are falling. The ten-year yield dropped to 4.45% from last week’s high of 4.485%. Similarly, the rate-sensitive two-year fell to 3.348%.
The RBNZ decision comes at a time when New Zealand’s economy is doing well. A recent report showed that the economy expanded by 1.5% YoY in the first quarter. It was the third consecutive quarter of gains, with the service industry being the main driving force. Goods-producing industries contracted, with the construction sector contracting by 3.8%.
The NZD/USD pair will react to the upcoming FOMC minutes, which will provide more information on Kevin Warsh’s first meeting. In it, officials left interest rates unchanged between 3.50% and 3.75%, with the dot plot showing that hawks were in ascendance. 9 members hinted that they would support tightening later this year.
Still, it is unclear whether the recent developments will change their outlooks. For example, jobs numbers released last week showed that the economy added 57k jobs last month, lower than the expected 114k. The BLS also revised the previous month’s jobs report lower from 172k to 129k.
Recent PMI numbers also came lower than expected. The ISM non-manufacturing PMI and the S&P Global services PMI fell to 54 and 51.2, respectively. Last week’s manufacturing PMI figure also came short of expectations.
NZD/USD chart | Source: TradingView
Technicals suggest that the recent NZD/USD pair uptrend may be losing steam as the Average Directional Index (ADX) has dropped from 38.4 on July 1 to 35 today. The pair has also remained below the 50-day moving average, and has formed a bearish flag pattern.
These technicals point to more downside in the near term. If this happens, it will drop to the key support level of 0.5621, its lowest level in June this year. A drop below that price will signal that bears have prevailed and push it lower, potentially to 0.5600. A clear bullish breakout will be confirmed if it moves above the 50-day moving average level.
Key Points:Sticky core inflation and fiscal deficits have reinforced the US Dollar’s strength amid monetary policy divergence.DXY held at $100.93 with green continuation candles retesting Fibonacci 0.618 level.EUR/USD defended $1.1430 blue trendline support with green rejection candles absorbing selling pressure.GBP/USD held $1.3380 resistance zone, testing key levels with mixed candles and neutral momentum.
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Currencies Reflect Divergent Monetary Policies and Economic Fundamentals Dollar, euro and pound rates are still subject to conflicting central bank policies and economic forces as of July 7. On the one hand, the U.S. Federal Reserve’s wait-and-see policy in the face of ongoing core inflation is sustaining dollar rates on the basis of expectations for a relatively tight rate setting in the foreseeable future; on the other hand, there is domestic demand and the status quo for dollars as reserve currency.
A mix of divergent fiscal settings and disparate inflation pressures in various parts of the euro zone and the European Central Bank’s push toward price stability characterize the euro. Policy pass-through in the area remains contingent on a range of national policies, keeping rates sensitive to growth and wage data.
As with other currencies, the Bank of England is considering both services inflation and softness in economic growth, and its policy path is a function of these variables, alongside UK fiscal policy and labor market trends, and relative policy settings for other central banks, which is what largely drives the cross rates with the dollar and euro.
Divergent inflation paths, fiscal settings and growth resilience in the three economies create two-sided risks, with trade and capital flows further driving currency differentiation, as markets seek to discern which central bank will best provide stability and growth.
DXY Holds $100.93 – Fibonacci 0.618 Retest on 1D Dollar Index Price Chart – Source: Tradingview DXY is sitting at $100.93 on the daily time frame. Following a breakout from the $97.67 low, buyers retested the 0.618 Fibonacci retracement zone around $100.31, creating green and red mixed candles. The asset continues to make higher highs, suggesting the upside remains intact above the $100.31 price level and its ascending white trendline.
With RSI hovering around 58, the DXY maintains a neutral-to-bullish bias. The $100.31 zone now serves as a breakout pivot point, per the volume profile, while the next 103 Fibonacci extension sits near $103.09 within the next couple of weeks. The market continues trading in an ascending channel and the higher highs/lows structure keeps the trend bullish.
Trade Idea: Buy at $100.93 with a target of $103.09 and a stop loss under $100.31.
GBP/USD Holds $1.3380 – White Descending Trendline Test on 4h GBP/USD Price Chart – Source: Tradingview GBP/USD is trading at $1.3380 within the 4h timeframe. After getting rejected off the red moving average around $1.337, buyers tested the descending white trendline around $1.3380 and formed green and red mixed candles. The price creates bullish rejection wicks and continues to keep higher highs within the chart. Currently, RSI sits around 67 and is still neutral on the 4h timeframe.
The $1.331 to $1.338 zones are a pivot area, per the volume profile, with the next zone of support around $1.325 to $1.331. GBP/USD still trades in a bullish trend and is still neutral and above its trendline. Higher highs and lows are still in place, and the trendline continues to hold the price higher within the trading range.
Trade Idea: Buy at $1.3380 with a target of $1.345 and a stop loss under $1.325.
EUR/USD Holds $1.1430 – EMA 50 Defense on 4h EUR/USD Price Chart – Source: Tradingview EUR/USD is trading at $1.1430 within the 4h timeframe. After getting rejected off the red moving average around $1.162, buyers retested the 50 EMA around $1.1419 and formed green and red mixed candles. The price creates bullish wicks and continues to keep higher lows within the chart.
Currently, RSI sits around 52 and is still neutral on the 4h timeframe. The $1.140 to $1.150 zones are a pivot area, per the volume profile, with the next zone of resistance around $1.155 to $1.162. EUR/USD still trades in a bullish trend and remains neutral and above its 50 EMA. Higher highs and lows are still in place, and the 50 EMA continues to hold the price higher in the near-term.
Trade Idea: Buy at $1.1430 with a target of $1.155 and a stop loss under $1.140.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
The EUR/USD pair trades marginally lower at around 1.1433 during the European trading session on Tuesday. The major currency pair faces slight selling pressure as the US Dollar (USD) edges up, while investors await the release of the Federal Open Market Committee (FOMC) minutes of the June policy meeting on Wednesday.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades slightly higher to near 100.92.
Investors keep an eye on the FOMC Minutes to identify reasons probably responsible for restricting policymakers from delivering forward guidance on monetary policy decisions.
In the June monetary policy press conference, Fed Chairman Kevin Warsh said that policymakers agreed that the “so-called forward guidance is not well suited to the current policy conjuncture.
Like the Fed, officials from the European Central Bank (ECB) also appear not in favor of delivering remarks regarding the monetary policy outlook.
Over the weekend, ECB Governing Council member Emmanuel Moulin also denied providing cues regarding the central bank’s decision in July, while speaking at the Rencontres Economiques conference in Aix-en-Provence. “We are not doing forward guidance so I won’t say what we will do in July,” Moulin said.
EUR/USD technical analysis
EUR/USD trades lower at around 1.1430, keeping a bearish near-term tone as the pair holds beneath the 20-day exponential moving average (EMA) at 1.1460. The fact that price remains under this short-term trend gauge suggests rallies are still being capped, while the Relative Strength Index (14) at 41.9 stays below the neutral 50 line, hinting at lingering downside pressure rather than a decisive recovery.
On the topside, immediate resistance is located at the 20-day EMA around 1.1460, and a sustained break above this level would be needed to ease the current bearish bias and open the way for a stronger rebound. Looking up, the pair could advance to the psychological level of 1.1500 if it breaks above the moving average.
On the downside, the yearly low around 1.1330 will be the key support zone; a break below it would expose the pair to the 29 May 2025 low at 1.1210.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Commerzbank’s Volkmar Baur notes EUR/USD has been stuck between 1.1350 and 1.1450 since mid-June, with few catalysts expected over the summer. He highlights that the European Central Bank (ECB) is likely to delay its next rate hike to September and that the Federal Reserve (Fed) is also unlikely to deliver clear signals, which should limit US Dollar (USD) strength and gradually support the Euro (EUR) into next year.
Rangebound pair awaits autumn drivers"Since mid-June, EUR/USD has been fluctuating between 1.1350 and 1.1450, and one is slowly getting the feeling that this could continue for a while longer."
"It therefore seems probable that the ECB will leave the key interest rate unchanged, while at the same time making it clear that another rate hike is possible but not yet certain."
"As for the Fed, the market is currently still pricing in slightly more than one rate hike by year-end. In September, Kevin Warsh will have to say a bit more than just “task force” when asked about the economic situation. We continue to expect that he will not raise interest rates - a development that is likely to weigh on the dollar."
"And the closer we get to next year, the stronger the support for the euro is likely to become. Yesterday’s German industrial orders data showed that a cyclical recovery is slowly taking shape. Structural reforms and expansionary fiscal policy should also help Germany and Europe grow faster next year."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Pound to Dollar (GBP/USD) exchange rate traded in a narrow range on Monday as easing UK political uncertainty offset renewed demand for the US Dollar following last week's sharp selloff.
At the time of writing, GBP/USD was trading at $1.3352, little changed on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.335559 (+0.03%)
Euro to Dollar (EUR/USD): 1.141696 (-0.17%)
Dollar to Yen (USD/JPY): 162.33951 (+0.61%)
DAILY RECAP:
The US Dollar attracted support on Monday as US markets reopened following the long Independence Day weekend.
The ‘Greenback’ seemed to have entered oversold conditions following its sharp losses in the wake of last week’s non-farm payrolls report, which reported an unexpectedly large slowdown in job creation.
Therefore, some price-conscious investors were willing to buy the dip, lifting the US Dollar.
Meanwhile, the latest ISM services PMI printed in line with expectations, easing from 54.5 in May to 54 in June. Although this was a slight softening of activity, it still represented a healthy expansion in the US services sector.
Meanwhile, the Pound (GBP) held strong on Monday as investors continued to scale back the political risk premium that has weighed on Sterling in recent weeks.
With MP Andy Burnham widely expected to become the next Prime Minister, markets appear increasingly confident that the UK will avoid a lengthy and disruptive Labour leadership contest.
Burnham has moved to reassure investors since launching his leadership bid, pledging to maintain the government’s existing fiscal rules while also outlining ambitious plans to support the economy.
This has been well received by GBP investors, with Sterling finding support as concerns over UK political instability continue to recede.
Near-Term GBP/USD Forecast: US Employment Data to Support the Dollar? Looking forward, high-impact data is thin on the ground on Tuesday, with the US weekly ADP employment change figure being the only release of note. This mid-tier data could support the US Dollar, if it reports healthy growth in US private employment.
Elsewhere, market risk appetite could influence the pairing. The safe-haven US Dollar would likely benefit if the market mood sours, while the increasingly risk-sensitive Pound could attract support if sentiment brightens. Any shifts in risk appetite could see GBP/USD waver.
Gold is attempting to break its medium-term trend, with the latest US labour market data acting as the main catalyst. The US employment report released on 2 July came in noticeably weaker than expected, with the pace of hiring slowing to its lowest level in several months. This may have dampened expectations of a near-term Federal Reserve rate hike, while the minutes of the Fed’s June meeting, due to be released on 8 July, could provide further insight into how long this pause in the central bank’s rhetoric is likely to last. For now, markets are pricing in a more dovish scenario, supporting safe-haven assets such as gold.
Technical Analysis
On the four-hour chart, XAU/USD declined from the $4,221 area in late June to around $3,942, where a recovery began. The decline formed a descending wedge, with its lower boundary attracting strong buying interest. This resulted in a sharp rebound, accompanied by a decisive breakout above both the pattern and the current market profile.
On 2 July, price closed above the upper boundary of the market profile at $4,091 and, if the rally continues, could target the base of the wedge. Should the market reverse, price is likely to retest the profile’s high-volume area, while the Point of Control (POC) at $4,030 and the lower profile boundary at $3,971 could provide support for buyers.
The RSI + MAs indicator currently stands at 62, 65 and 55. All three lines remain above the neutral level and continue to point higher, while the moving averages are still signalling bullish momentum. However, it is worth noting that the RSI has already entered overbought territory, suggesting that expectations for a substantial continuation of the rally should remain cautious.
Key Takeaways The breakout from the descending wedge may have been interpreted by market participants as the beginning of a local trend reversal. However, a move towards the red resistance zone and a test of that area remain highly uncertain, particularly ahead of the release of the Federal Reserve’s June meeting minutes, which could significantly reshape market expectations.
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