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US Dollar Index
The US Dollar Index climbed close to 98 last week, with a weekly gain of approximately 1%, as investors responded to new tariff announcements and evolving monetary policy signals. Throughout the week, President Trump intensified trade tensions by announcing a 35% tariff on Canadian imports starting August 1 and a general tariff of 15% to 20% on most other trading partners. Earlier in the week, the administration also announced a 50% tariff on copper imports and Brazilian goods, all of which will take effect on the same date. On the monetary policy front, Chicago Federal Reserve President Goolsbee opposed the idea of cutting interest rates to ease government debt burdens, emphasizing that the Fed’s dual mandate remains focused on employment and price stability. Meanwhile, the latest weekly jobless claims data continued to suggest a labor market that remains solid but is showing signs of cooling. The dollar saw the largest gains against the yen this week, along with significant strength against the euro.
The Dollar Index is currently hovering near the key 98.00 level, after facing strong technical rejection around the 97.80–98.00 resistance zone, which aligns with the upper boundary of a falling wedge pattern. Momentum indicators show initial signs of recovery but lack strong conviction. The Relative Strength Index (RSI) is hovering around 41.89, recovering from oversold territory but still below the neutral 50 line. Meanwhile, the MACD shows early signs of a bullish crossover, with the histogram slightly turning positive. A break above 98.00 would signal a potential trend reversal. At this stage, the index continues to fluctuate within a clearly defined falling wedge pattern, a structure often associated with bullish reversal potential. The 97.80–98.00 range, previously a support zone, has now turned into resistance and closely aligns with the wedge’s upper boundary, forming a key barrier to any upward breakout toward the 98.45 level (40-day simple moving average), with a further break pointing to the 99.00 level and the 99.12 region (upper Bollinger Band). The 9-day simple moving average at 97.27 serves as short-term dynamic support. Continued weakness below the 97.00 level may trigger a retest of the recent low around 96.38.
WTI Spot Crude Oil
Last week, WTI crude oil rose slightly, continuing a second consecutive week of gains, supported by a rising geopolitical risk premium. Houthi forces launched attacks in the Red Sea, sinking two cargo ships last week, heightening concerns over potential supply disruptions. The market continued to weigh the impact of U.S. trade actions, as President Trump announced a 35% tariff on Canadian imports starting August 1 and hinted at broad 15–20% tariffs on most other trading partners. These measures are expected to slow global growth and suppress oil demand. Meanwhile, crude prices dropped more than 2% midweek due to OPEC’s downward revision of its global demand forecast for 2026–2029, citing weak consumption in China. The organization now expects 2026 demand to be 106.3 million barrels per day, down from last year’s estimate of 108 million. Reportedly, OPEC is also considering pausing further output increases starting in October, which traders view as a sign the market may struggle to absorb additional supply. On the other hand, at the July 6 meeting, OPEC and its allies (OPEC+) agreed to raise their collective crude output by 548,000 barrels per day, continuing the rollback of a series of voluntary production cuts. The substantial increase in production has sparked concerns over oversupply, which may pressure WTI prices in the short term.
From last week’s price action, WTI crude faced renewed selling pressure near $67.71 (daily Bollinger midline) and $67.98 (last week’s high), struggling to break higher following the recent rally. The 14-day Relative Strength Index (RSI) hovers just below 50, indicating a lack of clear bullish momentum and suggesting selling pressure at higher levels. Currently, initial support lies at the 40-day simple moving average of $65.39, with further downside risk pointing to $63.72 (last week’s low); a break below this would target the key $63.00 level. On the upside, WTI pulled back after testing $67.98 (last week’s high), which serves as immediate resistance. A sustained close above this level could open the path toward the 200-day simple moving average at $68.10. A breakout would then target the $70.00 psychological level and $70.23 (50.0% Fibonacci retracement of the $76.74–$63.72 range) resistance zone.
Spot Gold
Last week, gold prices rose for a second consecutive week, gaining nearly 0.65% and closing at $3,355. The market turned cautious due to U.S. President Trump’s controversial trade policies against Canada and his threats to expand tariffs on other countries and copper. The escalating trade tensions supported safe-haven demand, driving gold higher last week. Trump also called for a 300 basis point cut to the federal funds rate, sparking speculation about dovish Federal Reserve nominations next year and raising concerns about long-term inflation expectations. The market continues to price in two rate cuts this year, although rate futures suggest a consensus to hold rates steady at the upcoming meeting. The movement in gold was not driven by a single event. Within 48 hours, Trump launched a three-punch "tariff combo": in addition to tariffs on Canada, U.S. imports of copper and Brazilian goods will face a 50% tariff, along with rumors of a broad 15%-20% tariff. This indiscriminate approach directly spurred a rush of safe-haven flows into the gold market. However, the gains in gold were limited by two major factors: on one hand, the U.S. Dollar Index surged in the short term and is poised for a weekly gain, which suppressed the appeal of dollar-denominated gold; on the other hand, unexpectedly strong U.S. employment data—initial jobless claims hit a seven-week low—undermined expectations for aggressive Fed rate cuts.
From a technical perspective, gold prices reclaimed the key psychological level of $3,300 last week, confirming a reversal from recent weakness. The 14-day Relative Strength Index (RSI) hovered just above 50, indicating stable bullish momentum, which could pave the way for a further short-term uptrend. This may push gold toward the $3,365 (July 3 high) and $3,368 (last week’s high) resistance area. If momentum continues, the XAU/USD pair could retest the $3,397.30 level (June 23 high) and $3,398.80 (upper Bollinger Band). A breakout above these levels would point toward $3,445.70 (June 16 high). On the downside, a break below the immediate support zone of $3,325 (14-day simple moving average) to $3,320 may attract dip-buyers and help limit downside near the $3,300 psychological level. The next support lies in the $3,283–$3,282 region, potentially revisiting last week's low.
AUD/USD
Last week, the Australian dollar rose steadily against the US dollar, climbing from an early low of 0.6485 to a near-month high of 0.6595, recovering earlier intraday losses. However, AUD/USD faced headwinds after US President Trump announced new tariff measures. The Aussie was supported earlier in the week by the Reserve Bank of Australia's unexpected decision to keep the Official Cash Rate (OCR) unchanged at 3.85%. RBA Governor Michele Bullock stated that inflation risks remain, driven by high unit labor costs and weak productivity, which could push inflation above forecasted levels. Additionally, RBA Deputy Governor Andrew Hauser noted global economic uncertainty and warned that tariffs could have far-reaching effects on the global economy and dampen growth. On the other hand, China’s Consumer Price Index (CPI) rose 0.1% year-on-year in June, compared to a 0.1% decline in May. Meanwhile, the monthly CPI fell by 0.1%, missing expectations of 0%. The Producer Price Index (PPI) dropped 3.6% year-on-year in June after falling 3.3% in May, below the market consensus of a 3.2% decline. Any shifts in China’s economy could impact the Aussie, as China is a key trading partner of Australia.
AUD/USD resumed its upward momentum last week. Daily chart technical analysis shows continued bullish sentiment, as the pair remains above both the 25-day simple moving average at 0.6525 and the key psychological level of 0.6500. The 14-day Relative Strength Index (RSI) is above 50, reinforcing the bullish bias. The pair is also slightly above the Bollinger midline at 0.6528, indicating strengthening short-term momentum. On the upside, the pair reached an eight-month high of 0.6595 before the week ended. A breakout above this level could strengthen the bullish trend and open the door toward the upper Bollinger Band near 0.6615. A further breakout would target the 0.6680 level (November high) and 0.6699 (76.4% Fibonacci retracement of the 0.5914–0.6942 range). On the downside, AUD/USD may test initial support at the 14-day simple moving average of 0.6528 and the 0.6500 psychological level. A successful break below these would weaken sentiment and place downside pressure on the pair, targeting the lower Bollinger Band around 0.6442, followed by the 0.6400 key level.
GBP/USD
Last week, GBP/USD fell slightly below 1.3500, marking its lowest level in over three weeks, after the UK economy contracted for a second consecutive month. GDP fell by 0.1% in May, missing expectations of a 0.1% increase, following a 0.3% decline in April. The two straight months of contraction raised concerns over a potential economic shrinkage in Q2. Manufacturing output weakened notably, while rising taxes and escalating global trade tensions further weighed on the economy. In April, US President Trump imposed broad tariffs, including a 10% levy on UK goods, despite relatively balanced trade between the two nations. Since then, the UK has reached a trade agreement with the US, ahead of the EU. However, growth momentum is slowing. After a strong Q1 GDP growth of 0.7%, economists expect a deceleration going forward. The Bank of England has lowered rates from 5.25% to 4.25% over the past year and is now widely expected to cut rates again in August, even as inflation remains above 3%. Governor Bailey has indicated a gradual rate reduction path but has not committed to action in August.
GBP/USD has been in a downward trend since retreating from a multi-year high near 1.3800 in early July. Last week, it fell for five consecutive sessions, pulling back to the lower end of its recent three-week range just below 1.35. However, the pair is still trading just above the 60-day simple moving average at 1.3469. On the daily chart, the 14-day Relative Strength Index (RSI) has retreated from overbought levels, but short-term downward momentum may still have room to develop. If the pair breaks below the 60-day SMA at 1.3469 and begins to treat it as resistance, the next support levels may be seen at 1.3400 (psychological level) and 1.3397 (lower Bollinger Band), followed by 1.3370 (June 23 low). On the upside, resistance may be found at 1.3592 (Bollinger midline) and 1.3600 (psychological level). A breakout above these levels would point toward 1.3662 (last week’s high).
USD/JPY
Last week, USD/JPY strengthened from levels below 144 to around 147.52, near a three-week high, as the US dollar rallied amid escalating global trade tensions. This move followed US President Trump’s announcement of a series of aggressive tariff measures, including a 35% tariff on Canadian imports and plans to impose broad 15%–20% tariffs on most other trading partners. Tensions between the US and Japan also remained in focus. Earlier in the week, Trump announced a 25% tariff on Japanese goods, effective August 1, further straining bilateral relations. In response, Japanese Prime Minister Shigeru Ishiba emphasized the need to reduce Japan’s reliance on the US in strategic areas such as defense, food security, and energy, calling the ongoing negotiations “a battle over national interests.” A leading Japanese think tank forecasted that the tariffs could reduce Japan’s GDP by 0.8% in 2025 and by a cumulative 1.9% by 2029.
USD/JPY rose from near the 144 level to a weekly high of 147.52, close to its three-week peak. From a technical perspective, the pair attracted dip-buying interest near the 100-day simple moving average at 145.82. A sustained move above the key 147.00 level could be seen as a new trigger point for bullish traders. On the daily chart, the 14-day Relative Strength Index (RSI) is above 60 with no signs of weakening, indicating strong upside momentum. The pair may rise toward the intermediate resistance zone at 147.60–147.65, with the ultimate target being a retest of June’s swing high near the 148.00 psychological level. Further gains could challenge 148.65 (May 12 high), followed by the major psychological barrier at 150.00.
On the downside, any corrective pullback is likely to find solid support near the 100-day SMA at 145.82. A break below 145.26 (Bollinger midline) could shift bias in favor of USD/JPY bears, with the downtrend potentially extending to the 144.22 zone (last week’s low) and toward the 144.00 psychological level.
EUR/USD
Last week, EUR/USD fell below the 1.1700 level, retreating from the 2021 high of 1.1830 reached last month, as escalating trade tensions continued to weigh on investor sentiment. The U.S. President hinted that the EU would soon receive a detailed letter outlining specific tariff rates, suggesting that efforts to reach a trade agreement before the August 1 deadline are unraveling. He also stated plans to impose broad tariffs of 15%–20% on most trading partners, casting further doubt on earlier expectations of a baseline 10% tariff rate. Despite the recent decline in the first half of July, the euro has still appreciated nearly 13% against the dollar year-to-date, supported by broad dollar weakness and hopes for an economic recovery driven by Germany’s shift toward greater fiscal spending. On the monetary policy front, the European Central Bank is widely expected to keep rates unchanged this month, though markets still anticipate at least one rate cut later this year.
On the daily chart, EUR/USD remains in a bearish correction phase since reaching 1.1830 on July 1, trading within a series of lower highs and lower lows and trapped inside a broadening wedge pattern. The 14-day Relative Strength Index (RSI) has dropped below 60, reinforcing the short-term bearish outlook, although the longer-term bias remains bullish. On the downside, initial support lies at 1.1664 (Bollinger midline), followed by 1.1600 (psychological level) and 1.1563 (34-day simple moving average). To revive the bullish trend, EUR/USD must retest 1.1750 (July 10 high). A breakout above this level would expose the next resistance at 1.1800 (psychological level) and the year-to-date high of 1.1830. Further upside could target the 1.1900 region, which capped prices during July–September 2021. A clear break above that would open the path toward the 1.2000 psychological mark.
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