U.S. Dollar Index

The U.S. Dollar Index started last week on the back foot, dipping close to the 97.00 level. However, by the weekend, it managed to rebound thanks to positive developments in global trade negotiations and supportive comments from central banks. The index bounced from oversold territory and shifted into a mild upward trend, hovering around the 97.60 level.

Still, it’s struggling to recover from steep weekly losses, as traders continue to weigh evolving trade headlines and look ahead to next week’s Federal Reserve policy meeting. Recent reports suggest the U.S. and EU are nearing a trade deal that would impose a 15% tariff on most EU goods—similar to the deal recently reached with Japan.

On the monetary front, the Fed is expected to hold rates steady next week while it gauges the inflationary impact of new tariffs. Meanwhile, President Donald Trump softened his tone toward Fed Chair Jerome Powell following a historic visit to the Fed headquarters, saying he has no intention to remove him.

Markets are currently pricing in a total of 43 basis points in rate cuts by the end of 2025, with expectations for cuts in both September and December.

Technically, while the dollar is attempting to recover from four straight days of losses, the structure remains fragile. The index is still trading below its 50-day simple moving average at 98.36 and hasn’t yet reclaimed the key pivot level at 97.66.

Unless we see a higher low—or at least a minor higher low—this rebound may lack conviction. Traders should watch for a clear bottom forming above the July low at 96.38, which would suggest buyers are stepping in. If not, the dollar remains vulnerable to deeper pullbacks, and this current uptick may simply be a pause within a larger downtrend.

A decisive break above 98.93—the monthly high—and the psychological 99.00 level is still the key trigger for a sustained upward move. Until then, resistance lies at the 98.00 psychological level, with the 50-day SMA at 98.36 being the critical pivot.

On the downside, the first support zone is at 97.10—the low from last week—and then 97.00, the round number level. A break below this opens the door to retesting 96.38, the monthly low.

WTI Spot Crude Oil

WTI crude futures declined and closed at $64.85 per barrel on Friday, marking the lowest level since June 20, as concerns over weak economic signals from both the U.S. and China weighed on prices. Over the week, WTI fell by approximately 1.80%, pressured by signs of increasing global supply and a slowdown in business investment. However, optimism around potential trade agreements between the U.S. and the EU, as well as Japan, helped limit the downside. These agreements may ultimately support global economic growth and boost oil demand.

The U.S. is also preparing to allow companies like Chevron to resume limited operations in Venezuela, which could increase daily crude exports by over 200,000 barrels and ease the tight supply of heavier crude. Meanwhile, OPEC+ is expected to announce a production increase at Monday’s meeting, aiming to regain market share through summer demand. In the U.S., the number of oil and gas rigs continues to decline, marking the twelfth drop in the past thirteen weeks, indicating potential softness in future domestic output.

From the daily chart, WTI oil prices remain in a steady upward consolidation pattern, currently trading above the 65-day simple moving average at $64.19, reflecting a bullish alignment. The 14-day RSI hovers near 46.00, and the MACD indicator continues to show expanding bullish momentum, suggesting increasing buying interest. A successful break above the key resistance zone at $67.73 (200-day simple moving average) and $68.36 (this week’s high) could open the way to challenge the psychological level at $70.00.

On the other hand, oil failed to stay above the 50% Fibonacci retracement level of the January–April decline at $67.08 earlier last week and has since retreated to around $65.25. This pullback highlights fading bullish momentum, further confirmed by repeated rejections near the $67.00 level and a break below the rising trendline. The area between the 65-day SMA at $64.19 and the round-number support at $63.00, together with the 80-day SMA at $63.72, forms a key technical support zone.

Spot Gold

Last week, gold prices closed lower for the second consecutive week, hovering near $3,337 per ounce, as easing concerns over tariffs continued to weigh on the metal’s appeal. Investors remained focused on the progress of trade negotiations, with reports suggesting that the U.S. and EU are close to reaching an agreement, following Washington’s announcement of a separate deal with Japan.

On the economic front, U.S. jobless claims have declined for six straight weeks—the longest stretch since 2022—highlighting the resilience of the labor market. This has reinforced expectations that the Federal Reserve will hold interest rates steady at next week’s policy meeting. However, markets are still pricing in a potential rate cut in September.

Meanwhile, renewed tensions between President Trump and Fed Chair Powell have drawn attention once again, as the two clashed over the costs of central bank renovations. Trump reiterated his call for lower interest rates but said the renovation issue alone was not enough to justify Powell’s dismissal.

From a technical perspective, gold is currently consolidating within the $3,300 to $3,340 range. The Bollinger Bands are slightly narrowing, with the upper band at $3,407.50 and the lower band at $3,284.30, running mostly parallel—suggesting the market remains in a sideways range near recent highs.

The 14-day RSI has continued to fall and is currently near 48.50, showing no clear sign of stabilizing, which indicates there may still be short-term downside momentum. Overall, the trend appears to be in a corrective phase, possibly entering a consolidation stage.

If prices fall below the midline of the Bollinger Bands at $3,345.90, the next downside targets would be $3,326.00 (the 75-day moving average) and the psychological level at $3,300. A break below those levels would expose further support at $3,285.30 (the 89-day moving average) and $3,284.50 (the lower Bollinger Band).

Conversely, if the Federal Reserve signals a clear path toward rate cuts this week and is supported by weakening economic data, gold could regain upward momentum. In that case, it may challenge resistance at the psychological level of $3,400 and the upper Bollinger Band at $3,409. A breakout above that would target $3,439, the high from last week.

AUD/USD

The Australian dollar pulled back last week after reaching an eight-month high against the U.S. dollar. The pair touched a session high of 0.6625 before retreating toward the 0.6600 level. This correction followed a strong rally driven by robust economic data and improving global risk sentiment. As the pair approached a key resistance zone, profit-taking and weakening momentum triggered the pullback.

The rally was fueled by signs of resilience in the Australian economy. The preliminary composite PMI rose to 53.6 in July, the highest in over two years, reducing market expectations for an imminent rate cut by the Reserve Bank of Australia. Meanwhile, a notable improvement in market risk sentiment—largely driven by Trump’s high-profile announcement of a "major agreement" with Japan—boosted expectations for improved global trade dynamics, which in turn supported risk assets. As a typical risk currency, the Aussie dollar benefited from this environment. At the same time, the U.S. dollar remained under broad pressure. The market has largely priced in a rate cut in August, which may no longer act as a fresh bearish catalyst in the short term.

From the daily chart, AUD/USD is trading between the midline and upper band of the Bollinger Channel, having broken above previous highs at 0.6594 and the psychological level of 0.6600. The Bollinger Bands are moderately expanding, and the midline has moved up to 0.6551, suggesting a bullish tilt. The pair has posted four consecutive bullish candles, with increasingly larger real bodies and healthy volume-price coordination, indicating clear short-term bullish control.

Key support lies at 0.6525 (former pivot low) and the 0.6500 round-number level. A break below this zone would expose the lower Bollinger Band at 0.6483. Staying above this support zone favors a continuation of the current bullish structure. The MACD has not yet formed a bullish crossover but short-term momentum has shifted from negative to positive. The RSI is rising and currently at 54.41, still below overbought territory, showing no signs of overheating.

Technically, the bias remains to the upside. A firm hold above the 0.6595–0.6600 resistance zone could open the way to test the November 2024 high at 0.6687 and the 0.6700 psychological level, with further potential toward 0.6750 (the October 14 high from last year).

GBP/USD

GBP/USD extended its decline toward the end of last week, falling just below the 1.3500 mark under renewed pressure from rising U.S. dollar demand. Traders adopted a cautious stance ahead of key events, including President Trump’s tariff deadline and the upcoming Federal Reserve policy meeting. Earlier in the week, the pair had climbed to a nearly two-week high of 1.3588.

PMI data from both the UK and the U.S. created a divergence in sentiment. U.S. services PMI exceeded expectations, while June figures from the UK broadly missed. Uncertainty surrounding potential Fed rate cuts has dampened risk appetite, which in turn has weakened the pound. Traders have scaled back expectations for rate cuts from the Fed in July, now anticipating fewer than two cuts by year-end. Meanwhile, dovish comments from Fed Governor Christopher Waller, who suggested that policymakers should consider a cut this month to support signs of weakness in the labor market, added complexity to the outlook.

On the sterling side, confidence is growing that the Bank of England may also lower rates at its August policy meeting, which could add further pressure on the pound.

The recent bullish reversal in GBP/USD is now under threat. The pair was clearly rejected below the 1.3600 level, a key technical barrier. After initially breaking above the 20-day simple moving average at 1.3542, GBP/USD has since fallen back below it, suggesting buyers lacked the strength to push prices higher. The 14-day RSI on the daily chart indicates weakening bullish momentum, with sellers beginning to take control, as reflected in recent price action.

If the pair closes below the July 23 low of 1.3515 and the psychological level at 1.3500, it would form a bearish engulfing pattern—indicating that bears have overtaken bulls within the 1.3515 to 1.3600 range and opening the door for a move lower. In a further bearish scenario, GBP/USD could test the week’s low at 1.3402, followed by the 75-day simple moving average at 1.3452 and the 1.3400 round number. A break below would target 1.3300 next.

On the upside, if buyers manage to push the pair back above the 20-day simple moving average at 1.3542, a retest of last week’s high at 1.3588 and the 1.3600 level may follow, with further potential toward the July 7 high at 1.3662.

USD/JPY

Ahead of last weekend, the Japanese yen pared some of its intraday losses against the U.S. dollar, after the pair had earlier dropped to a near three-week low of 145.85. Despite this recovery, the yen still held a negative bias due to diminished expectations for an imminent rate hike by the Bank of Japan. Data released Friday morning showed consumer inflation in Tokyo, Japan’s capital, while ongoing domestic political uncertainty could complicate the BOJ’s path toward policy normalization.

Additionally, the recent rebound in risk appetite has further weakened demand for the safe-haven yen. However, yen bears appear cautious about placing aggressive bets, as the U.S.-Japan trade agreement seems to have eased economic uncertainty and kept the door open for a potential BOJ rate hike later this year. On the other hand, lingering concerns over the Federal Reserve’s independence may limit the dollar’s ability to attract sustained follow-through buying, which in turn caps the upside potential for USD/JPY.

From a technical perspective, USD/JPY rebounded last week from the 145.85 level, which marked the confluence of the 100-day simple moving average (145.68) and the 50% Fibonacci retracement of the recent upward move. This bounce, along with positive oscillators on the daily chart, supports the case for further upside.

A sustained move above 147.71 (the 140-day simple moving average) could confirm a bullish outlook and allow the pair to retest the psychological 148.00 level. Momentum may then extend toward last week’s high around 148.67. A breakout beyond that could open the door for a push toward the 200-day simple moving average at 149.63.

On the downside, initial support is expected at the 147.00 round level, followed by the 146.70–146.65 region, which aligns with the 38.2% Fibonacci retracement. Below that lies the 100-day simple moving average near 146.68. A break beneath this zone may lead to a drop under 146.00. If follow-through selling develops below the July 10 low of 145.75, the pair could fall further toward the 145.00 psychological support.

EUR/USD

EUR/USD reached a near three-week high of 1.1775 last week. However, the pair has since lacked follow-through momentum and is currently trading just below the 1.1700 mark. Despite the European Central Bank's decision last Thursday to keep interest rates unchanged, the euro has struggled to attract meaningful buying interest amid ongoing trade-related uncertainty.

White House spokesperson Kush Desai stated that any reports regarding a U.S.-EU trade agreement should be considered speculative unless confirmed by President Trump. This undermined earlier media reports suggesting a deal was close, which in turn weighed on the euro and exerted pressure on the EUR/USD pair.

On the U.S. side, macroeconomic data released last week reinforced expectations that the Federal Reserve will leave interest rates unchanged at its July 30 meeting. S&P Global’s U.S. Composite PMI showed that business activity expanded for the 30th consecutive month, supporting the case for a hold in policy, which benefits the dollar and limits upside in EUR/USD.

From a daily chart perspective, EUR/USD rebounded last week from a three-week low of 1.1556 and moved back above 1.1600. However, the overall trend remains bearish. Since July 1, the pair has been trading within a broadening wedge pattern, reflecting market volatility and often signaling the potential for a significant reversal. While the end-of-week price action showed easing bearish pressure, the 14-day RSI remains around 60, suggesting cautious sentiment.

The former support at 1.1655 (lows from July 11 and 14) now acts as the first resistance target for bulls. Further upside may encounter resistance just below 1.1700, where the highs from July 14 and 15 are located. A break above this area could see a test of 1.1750 (July 10 high). Beyond that, resistance lies at 1.1800 (psychological level) and the year-to-date high at 1.1830.

On the downside, the area between last Thursday’s low of 1.1556 and the 40-day simple moving average at 1.1567 forms a key technical support zone. A break below this would shift focus toward the psychological level at 1.1500.

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