Market Analysis

GOLD

GOLD prices have broken below a critical level, with heightened selling pressure as trade tensions between the U.S. and China begin to ease. Reports from China Central Television confirm that U.S. officials have been reaching out to Beijing through various diplomatic channels. Furthermore, the Trump administration is preparing to roll back tariffs on select countries, signaling a potential de-escalation of tensions between the two nations.

This shift has eased market anxiety, weakening the bullish momentum in gold. While this may drive gold prices lower, upcoming data releases and the Federal Reserve’s stance on potential rate cuts may act as a counterbalance, providing support to the market.

Technically, the MACD shows sustained selling volume, and the RSI suggests a normalization of bearish momentum. A continuation of downward movement is possible, especially after a clean break below key structural levels. However, a retest of the lower boundary and the 200-day EMA could still provide temporary support before a deeper downside continuation.

SILVER

SILVER prices are also under pressure, with rising selling momentum. Interestingly, the MACD has formed a bullish crossover despite a sharp decline in price, while the RSI indicates a gradual move lower. This divergence suggests that while volume and momentum favor a bearish move, price action is lagging in clarity. We continue to seek selling opportunities, but caution is advised, as market reactions to incoming news could shift sentiment rapidly.

DXY (U.S. Dollar Index)

The U.S. Dollar is gaining strength, supported by a reduction in trade tension concerns. Both the MACD and RSI indicate sustained buying momentum, with the dollar breaking above the 200-day EMA. A continuation of upward movement appears likely, particularly if it surpasses the key resistance level at 99.919. A break above this threshold would confirm a broader bullish shift in market sentiment.

GBP/USD

GBP/USD is under increasing bearish pressure, with both the MACD and RSI showing signs of strengthening selling momentum. The RSI has slightly turned higher despite a sharp decline in price, suggesting short-term relief may be possible. Nevertheless, prices are below the 200-day EMA, indicating further downside potential. A break below the next key support could solidify the bearish trend.

AUD/USD

AUD/USD is gaining strength, buoyed by positive economic data. CPI q/q and y/y came in at 0.9% and 2.5%, respectively, while the Trimmed Mean CPI q/q rose by 0.7%. These figures indicate healthy economic conditions in Australia, reducing market expectations for a rate cut in the upcoming period. As a result, the Aussie Dollar is seeing upward momentum, supported by renewed confidence in the domestic economy.

NZD/USD

NZD/USD is facing renewed selling pressure after breaking through significant support levels and shifting its overall trend. Although some of the price rebound stemmed from easing U.S.-China tensions, domestic fundamentals continue to weigh on the Kiwi. Markets are now pricing in a 25bps rate cut at the Reserve Bank of New Zealand’s upcoming meeting, which could push rates to a low of 2.75% by October—strengthening the bearish outlook.

EUR/USD

EUR/USD is also under pressure, with both the MACD and RSI showing increased bearish momentum. A break below the lower boundary of the consolidation zone confirms the shift, and further downside continuation is expected in the near term.

USD/JPY

USD/JPY is weakening against the U.S. Dollar as traders await the Bank of Japan’s rate decision. The MACD signals increasing bullish volume, and the RSI supports growing buying momentum. A continued rally is likely, particularly after breaking above the 200-day EMA. The key resistance level at 143.442 is being tested; if broken, it may confirm a bullish breakout.

USD/CHF

USD/CHF is continuing to strengthen, in line with the broader market sentiment shift. Both MACD and RSI reflect bullish momentum. Prices are recovering above key levels and the 200-day EMA, and we expect the uptrend to extend. However, price volatility may increase due to global developments, so caution is warranted.

USD/CAD

USD/CAD is experiencing a pick-up in bearish momentum. The MACD shows strengthening downside pressure, while the RSI confirms increased selling. Prices have been rejected at the 200-day EMA, and further downside movement is expected in the near term, aligning with technical expectations.

COT Reports Analysis

• AUD – WEAK (5/5)
  
• GBP – STRONG (5/5)
  
• CAD – STRONG (1/5)
  
• EUR – WEAK (1/5)
  
• JPY – STRONG (5/5)
  
• CHF – WEAK (2/5)
  
• USD – MIXED
  
• NZD – STRONG (1/5)
  
• GOLD – STRONG (2/5)
  
• SILVER – STRONG (3/5)
  

Final Thoughts

The forex market is navigating significant shifts, influenced by both geopolitical developments and economic indicators. Precious metals like GOLD and SILVER are under pressure, with technical indicators suggesting continued weakness. Meanwhile, currencies such as GBP/USD and NZD/USD are experiencing bearish trends, while the U.S. Dollar shows potential for continued strength.

Staying informed about ongoing developments, particularly trade negotiations and central bank decisions, is crucial for adapting trading strategies and navigating potential market volatility.