Forex News
- Gold rallies above $4,420 as US Dollar weakness lifts bullion.
- Rising long-end yields cap upside near the $4,500 threshold.
- Fed minutes and Iran headlines may drive next market catalysts.
Gold (XAU/USD) price rises over 1% on Monday amid overall US Dollar (USD) weakness and lower US Treasury yields, following last week’s soft inflation data that reduced speculation of a hawkish Federal Reserve (Fed), . The XAU/USD trades at $4,422 after bouncing off daily lows of $4,367.
XAU/USD advances as softer inflation trims Fed bets despite rising yields
The US Dollar Index (DXY), which tracks the performance of the buck’s value against six currencies, is down 0.37% at 99.53, a tailwind for the precious metal. The US 10-year T-note yield, although rising over 2.5 basis points to 4.718%, caps Gold’s advance towards the $4,500 mark.
US Treasury yields at the long end of the curve, the 30-year, are reaching 2007 highs. Bloomberg reported that it reflects “investor angst over the surging national debt, a flood of long-dated bond sales and inflation that’s been stuck” above the Federal Reserve’s 2% for the past five years.
Last week’s consumer- and producer-side inflation triggered an investor reaction to trim Fed-hawkish bets. Fears that prices will not resume declines in the near term are fueled by the lack of progress in US-Iran talks in the Middle East.
Crude prices remain on the front seat, with West Texas Intermediate (WTI) surging over 2.30% to $84.35 per barrel.
Mixed geopolitical signals suggest that Iran is shifting its policy from defensive to an offensive one. The Iranian Foreign Ministry stated that the “Islamabad agreement has not collapsed and the possibility of returning to it remains,” via Al Arabiya.
In the meantime, Investors see a nearly 69% chance that the Fed will hold rates unchanged, while the odds for the December meeting continue to price in a 66% chance of a 25-basis-point rate hike, according to Prime Terminal.
Markets are now looking forward to the Fed's July meeting minutes, set to be released on Wednesday, to gain more insight into policymakers' monetary stance.
XAU/USD technical analysis: Gold surpasses the 100-day SMA, eyes on $4,500
Gold price has reclaimed the $4,400 figure and is on its way to clearing the 100-day Simple Moving Average (SMA) at $4,386, as part of a confluence of technical levels, which capped bullion’s price in the short term.
Worth noting that momentum is bullish, as depicted in the Relative Strength Index (RSI). This confirms that the uptrend is in place, though traders must clear the $4,500 milestone, followed by the 200-day SMA at $4,506. On further strength, the next resistance is the $4,600 mark.
For a bearish reversal, Gold needs to drop below the 100-day SMA, followed by the July 6 high at $4,202, followed by the 50-day SMA at $4,146 and $4,100.
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.
- USD/CHF bounces back above 0.8100 after finding support near the 50-day SMA.
- Weak ADX and neutral RSI readings suggest the pair may stay range-bound in the near term.
- Failure to hold the 50-day SMA could expose the 0.8000 mark.
USD/CHF rebounds on Monday as the US Dollar (USD) recovers from its early losses. At the time of writing, the pair trades around 0.8112 after touching an intraday low of 0.8072, its lowest level in over a week.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 99.60 after recovering from 99.30, its lowest level since June 5.
Analysts at MUFG/BTMU point out that the Dollar index “has not yet tested support from the 200-day moving average, which comes in at around 99.20,” underscoring that the broader gauge of Dollar strength is still trading above a key technical level. At the same time, they note that “the run of softer US economic data has encouraged market participants to scale back Fed rate hike expectations,” suggesting that the fundamental backdrop for sustained Dollar strength is becoming less supportive.
From a technical perspective, USD/CHF retains a mild bullish bias after reclaiming the key moving averages and the 0.8000 psychological mark in early June. However, price action has since turned largely sideways as momentum indicators soften.
The Relative Strength Index (RSI) on the daily chart stands near the neutral 52 level, while the Moving Average Convergence Divergence (MACD) indicator hovers slightly below zero. The Average Directional Index (ADX) at 16 also points to weak trend strength, inting at a consolidative tone rather than a decisive trend continuation.
On the upside, initial resistance is located at the 0.8150 horizontal level, followed by the stronger 0.8200 barrier. A sustained break above 0.8200 could restore bullish momentum and open the door to additional gains.
On the downside, the 50-day Simple Moving Average (SMA) at 0.8082 offers immediate support, followed by the 0.8000 psychological mark. A break below this area would expose the 100-day SMA at 0.7974 and the 200-day SMA at 0.7932.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
- XAG/USD jumps as weaker Greenback offsets rising Oil prices.
- Short-term RSI favors bulls, but bearish structure remains intact.
- Break above $68.72 exposes $70.00 and 200-day SMA.
Silver price surges nearly 1.80% on Monday as the Greenback dives, while uncertainty over the US-Iran conflict clouds investor sentiment. It seems like the precious metals segment reacquired its haven status, even though Oil prices edged higher. The XAG/USD trades at $65.85, after reaching a low of the day (LOD) of $64.70.
XAG/USD Price Forecast: Technical Outlook
Silver seems poised to consolidate around the $64.70–$66.70 area, though, per market structure, it remains neutral to downward-biased. In the short term, momentum favors bulls, as indicated by the Relative Strength Index (RSI), but they must clear key technical resistance levels before the white metal shifts bullish.
The first resistance is the 100-day Simple Moving Average (SMA) at $68.72. Once cleared, the next stop would be the $70.00 figure, followed by the 200-day SMA at $71.73.
On the flip side, XAG/USD’s first support is the August 14 daily low of $63.51. Below this floor level, the next support is the 50-day SMA at 61.31, ahead of the $60.00 threshold. A breach of the latter will expose an upslope support trendline at around the $58.40–$58.60 range.
XAG/USD Price Chart – Daily
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.
- EUR/USD gives back part of its early gains as the US Dollar recovers from recent lows.
- Soft US economic data has pushed traders to scale back expectations of a Fed rate hike next month.
- The ECB is widely expected to raise interest rates again next month.
EUR/USD trims earlier gains on Monday as the US Dollar (USD) shows signs of stabilization after opening the week under selling pressure. At the time of writing, the pair trades around 1.1580 after touching an intraday high of 1.1614, its highest level since June 17.
The Greenback is caught between fading expectations of an imminent Federal Reserve (Fed) rate hike and tensions in the Middle East, which keep some defensive demand alive and limit the downside.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 99.57 after touching 99.30, its weakest level since June 5.
Traders no longer expect the Fed to raise interest rates at its September meeting. According to the CME FedWatch tool, markets now assign around a 70% probability that the central bank will keep rates unchanged next month.
The shift follows recent US economic data pointing to weaker labour demand, softer consumer spending and easing inflationary pressure. In contrast, the European Central Bank (ECB) is widely expected to raise interest rates for the second time this year in September as policymakers seek to bring inflation back toward the 2% target.
On the geopolitical front, the 60-day memorandum of understanding signed by the United States and Iran in June expired on Monday without a permanent agreement, while shipping through the Strait remains heavily restricted.
Against this backdrop, energy-driven inflation risks remain alive. This supports expectations of an ECB rate hike in September while preventing markets from fully ruling out a Fed hike later this year.
Looking ahead, the final Eurozone Harmonized Index of Consumer Prices (HICP) data for July are due on Wednesday. Core HICP inflation is expected to be confirmed at 2.5% YoY.
In the US, traders will examine the Minutes of the July Federal Open Market Committee (FOMC) meeting, also due on Wednesday, for fresh clues about the Fed’s policy path.
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger 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.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
- EUR/GBP is going nowhere fast, boxed into the mid-0.8500s ahead of Tuesday's UK labor market report.
- UK wage growth is the number that matters for the Bank of England and the next real catalyst for the cross.
- A fresh escalation warning out of Iran is a background risk, working through energy prices rather than hitting the cross directly.
EUR/GBP is holding a narrow band around the mid-0.8500s with little conviction in either direction. At the time of writing, the cross is close to flat on the day.
The European Central Bank (ECB) raised rates in June, and markets continue to lean toward a further move at the September meeting, with persistent energy-driven inflation keeping the hawks in charge.
A senior Iranian official told Reuters that Tehran has decided to shift its stance from defensive to a "fully offensive" one, set a deadline of a few weeks for the United States to fully implement the June memorandum of understanding, and warned that all Iranian entities are prepared to escalate tensions in the Strait of Hormuz and the wider region if diplomacy fails. The comments landed as the June MoU lapsed, with Washington so far in no hurry to make concessions.
For Sterling, the focus is squarely on Tuesday's United Kingdom (UK) jobs report. The key releases are the Average Earnings figures and the wage data the Bank of England (BoE) watches most closely as it judges how sticky domestic inflation really is. Alongside them come the Claimant Count, Employment Change and the ILO Unemployment Rate, which is seen edging down. A firm wage print would give the Pound something to work with; a soft one hands the initiative back to the Euro.
Germany's ZEW sentiment surveys are also on the calendar, but they sit well down the order of importance for this cross and are unlikely to move it on their own.
Until the UK numbers land, EUR/GBP looks content to drift inside its recent range. The wage data is the release that can break it everything before that is noise.
Short-term technical analysis:
On the 4-hour chart, EUR/GBP trades at 0.8546, with the cross capped beneath both the 20-period Simple Moving Average (SMA) at 0.8547 and the 100-period SMA at 0.8557, keeping the near-term tone mildly bearish. The latest rejection around the pivot band at 0.8546, alongside a Relative Strength Index (RSI) drifting just below the 50 line, suggests upside attempts are fading while momentum remains subdued.
On the topside, initial resistance aligns with the 20-period SMA at 0.8547, followed by the nearby horizontal barrier at 0.8548, while the 100-period SMA at 0.8557 represents a stronger cap if bulls regain traction. On the downside, immediate support emerges at 0.8544, with a break exposing the next minor floor at 0.8543, below which selling pressure could extend the corrective phase.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- DXY trades near 99.50, a session low just above 99.25 breaking August's range.
- Euro at a two-month high, the Pound near three-month peaks, Gold bid.
- Empire State manufacturing prints 20.6 against 11, a four-year high.
The Dollar Index trades near 99.50, roughly a tenth of a percent lower, having opened directly on its 200-day Exponential Moving Average (EMA) and failed there inside the first minutes, with a session low just above 99.25 taking out the August range. That is the tape on the day a 60-day framework meant to end the war over the Strait of Hormuz expires with nothing agreed to replace it, which is not how a haven currency is supposed to behave on a deadline.
The haven bid went somewhere else
A senior Iranian official told Reuters the country may move from a defensive policy to an offensive one should diplomacy fail, escalating both in the Strait and across the wider region, and three vessels crossed the waterway on Sunday against a five-day average of 12 and roughly 130 a day before the war. Crude Oil firmed on the headlines, with West Texas Intermediate (WTI) near the $83.00 handle and Brent above the $88.00 handle.
On paper this should pay the Dollar twice over. Haven flow is the obvious leg and the terms-of-trade leg is the stronger one, because the United States exports energy on net while the euro area imports the barrels that move through that chokepoint. Instead the Euro trades at a two-month high, the Pound sits near three-month peaks and Gold is bid, which is the signature of a market that has stopped buying safety and started selling one currency.
The rate premium left the price last week
The Dollar had carried a hike premium since the July 29 meeting, where three policymakers dissented in favour of a quarter point against a committee that held. A soft Consumer Price Index (CPI) print, a soft Producer Price Index (PPI) print and a 0.6% contraction in July retail sales took that premium apart inside four sessions, moving September hike odds from a coin flip on August 10 to roughly a third by Friday.
Monday's Empire State manufacturing survey argues the other way and is being ignored for it. The index printed 20.6 against an 11 consensus and 15.6 in July, the strongest reading in more than four years, with unfilled orders up ten points to 15.5 and prices paid rising while prices received fell. A regional survey does not rebuild a rate premium that three national prints dismantled, which leaves Wednesday as the first genuine test of the repricing.
The Dollar has an official seller now
The largest single move on this chart was not a data event at all. At the turn of the month Tokyo intervened alone and then ran a coordinated Yen-buying operation with the US Treasury, the first joint action of its kind since 1998, with the New York Federal Reserve reportedly selling Euros to fund it. The index travelled from above 101.50 to beneath the 100.00 handle inside that window and has not reclaimed a figure of it in the fortnight since.
The size of one operation is not the point of it. A currency whose own Treasury has bought the other side, called the Yen substantially undervalued and promised to act again trades beneath a declared ceiling. Positioning long the Dollar into a war headline now carries the risk of meeting an official seller at the top of the move, which is precisely why the escalation premium is being expressed in Gold and in European currencies instead.
The week the Dollar has to work with
The Federal Open Market Committee (FOMC) publishes minutes from the July 29 meeting on Wednesday at 18:00 GMT, the only scheduled event this week capable of rebuilding what the data removed. The useful detail is not the 9-3 vote, which is known, but how close the remainder of the committee sat to the three who wanted a quarter point, and the account predates the soft inflation prints and the retail sales miss entirely.
Friday carries preliminary August Purchasing Managers Index (PMI) readings at 13:45 GMT, US manufacturing seen at 53.8 from 53.9 and services at 54 from 54.6, alongside euro-area flash readings that are the first real test of whether the other side of the basket can supply a leg of its own. Beyond the week sits the Jackson Hole symposium on August 27-29, with the chair's keynote on the Friday, 19 days ahead of the September decision.
The domestic calendar in between is second tier and priced that way. Tuesday stacks housing starts at 1.35 million from 1.427 million and building permits little changed at 1.37 million from 12:30 GMT, industrial production 0.3% from 0.1% at 13:15 and pending home sales 0.2% from -5.4% at 14:00. Thursday brings initial claims at 212K against 209K and a Philadelphia Fed survey seen at 25 from 41.4, none of which moves September on its own.
Dollar Index technical levels
Resistance: The 200-day EMA near 99.65 caps immediately, having turned the opening print back, with the 100.00 handle above it and a declining 50-day EMA near 100.25 the line that would end this leg.
Support: Just above 99.25 is the session floor and the break of the August range, with the 99.00 handle beneath it and the 98.75 area behind that.
Bias: Bearish. A daily Stochastic Relative Strength Index (Stoch RSI) near 13 reads oversold, though oversold beneath a rolled-over 50-day EMA and a lost 200-day EMA describes a trend rather than a bounce, and rallies into the 100.00 handle are for selling. Invalidation on a daily close back above 100.00.
DXY daily chart
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- DJIA trades near 53,550, roughly 1,200 points beneath the August 5 record.
- The 60-day US-Iran framework expires with three vessels crossing Hormuz on Sunday.
- Refiners at record highs on diesel margins near $100 a barrel, all outside the index.
The Dow Jones Industrial Average (DJIA) trades near 53,550 on Monday, down close to 200 points and roughly 1,200 beneath the record printed on August 5, on the day the 60-day negotiating window that was meant to end the war over the Strait of Hormuz lapses with nothing agreed to replace it. For a second consecutive session, the highest print of the day is the opening print, an index sold from the first minutes rather than one drifting off a mid-morning high.
The deadline arrives with nothing on the other side of it
The memorandum signed at Versailles in June ran 60 days and expires on Monday, with no extension announced and no direct talks under way. A senior Iranian official told Reuters the country may move from a defensive policy to an offensive one should diplomacy fail, escalating both in the Strait and across the wider region, while the Revolutionary Guard's political bureau spent the weekend describing preparations for a US ground operation.
Tehran's foreign ministry argues in reply that the two-month window was never written into the text and that the date carries no particular significance, which is a strange thing to insist on while the physical evidence says otherwise. Three vessels crossed the Strait on Sunday against a five-day average of 12 and roughly 130 a day before the war, and Trump has told Oman, the only live channel left, that getting in the way would be answered with bombing. Crude Oil firmed on the headlines, with West Texas Intermediate (WTI) near the $83.00 handle and Brent above the $88.00 handle.
The war trade is fully priced, just not here
Three large American refiners trade at or near record levels, Valero (VLO) at an all-time high, Marathon Petroleum (MPC) at its best since its 2011 separation and Phillips 66 (PSX) at a record since listing. Valero and Marathon Petroleum have more than doubled this year and Phillips 66 is up roughly 85%, on diesel margins running near $100 a barrel as Ukrainian strikes take Russian refining offline and Gulf capacity stays blocked in behind the chokepoint.
Not one of the three sits in this index. The only energy name among the thirty is Chevron (CVX), an integrated major whose refining arm is a segment inside a business that also owns the barrels going in. The cleanest equity expression of a five-month supply war is being paid out in full on the American tape, and the Dow Jones Industrial Average is not a shareholder in it.
A refining margin near $100 a barrel is also more than a sector curiosity, because diesel is the price of freight, farm equipment and every good that moves by truck. A margin at that level is an inflation input with a delivery lag rather than an energy windfall, and the equity market has spent the last fortnight buying the earnings while pricing away the consequence.
Prices paid up, prices received down
The August Empire State manufacturing survey printed 20.6 against an 11 consensus and 15.6 in July, the strongest reading in more than four years, with unfilled orders jumping ten points to 15.5. New orders and shipments softened from July without leaving expansion and the employment measure eased to 9.3, so the headline is not a hiring story.
The internals carry the more useful signal, since prices paid rose while prices received fell, which is a manufacturer absorbing an input cost it cannot yet pass on. Passthrough deferred is not passthrough avoided. Against a soft Consumer Price Index (CPI) print and a 0.6% retail sales contraction last week, futures took September hike odds from a coin flip on August 10 to roughly a third by Friday, on the view that demand is doing the Committee's tightening for it.
The week answers back
The Federal Open Market Committee (FOMC) publishes minutes from the July 29 meeting on Wednesday at 18:00 GMT, an account of a 9-3 hold argued before the soft inflation prints, before the retail sales miss and before this morning's manufacturing beat, so the record of the debate lands after the data that moved it. Friday's preliminary August Purchasing Managers Index (PMI) readings carry the same red band, manufacturing seen at 53.8 from 53.9 and services at 54 from 54.6.
Tuesday stacks the housing file, with building permits at 1.37 million against 1.374 million and housing starts at 1.35 million from 1.427 million at 12:30 GMT, industrial production 0.3% from 0.1% at 13:15 and pending home sales 0.2% from -5.4% at 14:00. Thursday brings initial claims at 212K against 209K and a Philadelphia Fed survey seen at 25 from 41.4. Home Depot (HD) reports Tuesday and Walmart (WMT) Thursday, giving the consumer who missed last week a second hearing from inside the index.
Dow Jones Industrial Average technical levels
Resistance: The 53,800 area caps, having flipped from floor to ceiling on last session's break, with 53,900 and the early-August ledge near 54,100 above it and the record just short of 54,750 beyond.
Support: The 53,500 area has already been tested this session and is the line that decides the week. Beneath it sit the 53,200 area and then 53,000, with the 50-day Exponential Moving Average (EMA) near 52,400 the deeper defence.
Bias: Bearish. Two consecutive sessions whose high is the opening print, on a daily Stochastic Relative Strength Index (Stoch RSI) that has climbed into its upper band without price making a new high, describe an index distributing rather than basing. Invalidation on a daily close back above 53,800.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- WTI gains 0.68% on Monday and trades around $82.10 at the time of writing.
- The lack of negotiations between Washington and Tehran keeps concerns over Oil flows through the Strait of Hormuz elevated.
- Tensions in Lebanon and Ukrainian attacks on Russian refineries add to risks surrounding global supply.
West Texas Intermediate (WTI) US Oil advances on Monday and trades around $82.10 at the time of writing, up 0.68% on the day. Oil prices remain supported by the deadlock between the United States (US) and Iran, which keeps concerns about Oil flows through the Strait of Hormuz elevated.
Prospects for a full reopening of the Strait of Hormuz remain uncertain as talks between Washington and Tehran appear to have reached a standstill. Iranian Foreign Minister Abbas Araghchi says that no negotiations are currently taking place between the two countries and that the United States (US) must accept Iran's conditions for shipping to resume through the strategic waterway.
Tensions intensified further over the weekend. Iranian Deputy Foreign Minister Kazem Gharibabadi called on US President Donald Trump to “accept the reality of defeat,” after Trump suggested that he would soon declare the Strait of Hormuz a “territory of the United States.” The rhetoric reduces the prospects of a rapid de-escalation and helps maintain a geopolitical risk premium in Oil prices.
The Oil market is also monitoring developments in Lebanon following a renewed escalation in fighting between Israel and the Iran-backed Hezbollah. A further deterioration in the conflict could heighten concerns about the stability of energy supplies in the Middle East and continue to support WTI.
Supply risks are not limited to the Middle East. Russia is facing fuel shortages after Ukraine resumed near-daily attacks on Russian Oil refineries. These disruptions add another source of uncertainty over the availability of energy products in the global market.
Traders now turn their attention to the American Petroleum Institute (API) weekly US Crude Oil inventory report, due on Tuesday. The data could provide fresh indications about the supply-demand balance in the world's largest Oil market.
WTI US Oil technical analysis
In the one-hour chart, WTI US Oil trades at $82.08, holding a constructive near-term bias as it stays above the 100-period simple moving average (SMA) at $81.53 and the 200-period SMA at $79.22. The reclaimed moving-average stack under price hints at a supportive backdrop, while the downward resistance trend line coming in near $82.28 caps the immediate topside. The Relative Strength Index (RSI) around 57 suggests positive but not overextended momentum, keeping scope for further gains as long as intraday pullbacks remain contained above nearby support.
On the topside, initial resistance is located at the descending trend line around $82.28, with further barriers at the horizontal level of $83.57 and then $84.60, where selling interest is likely to intensify. On the downside, immediate support is provided by the 100-period SMA at $81.53, ahead of a more significant horizontal floor near $80.00; a deeper slide would expose the 200-period SMA at $79.22, where buyers would be expected to defend the broader bullish structure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- GBP/USD rises as traders digest softer US inflation data.
- UK jobs and CPI figures could reshape BoE expectations.
- Middle East headlines may revive US Dollar demand through yields.
The Pound Sterling (GBP) registers modest gains of 0.14% on Monday against the US Dollar (USD) as investors digest softer-than-expected US inflation data and brace for the release of crucial UK jobs and inflation data. The GBP/USD pair trades at 1.3552 after hitting a three-month high of 1.3571.
GBP/USD firms as softer US inflation supports Fed hold bets
Over the past week, inflation on the consumer and producer sides in the US pushed US Treasury yields lower, indicating that traders are not expecting a rate hike, at least at the September meeting, according to Prime Terminal. The disinflation process continued for the second straight month, yet Fed-dovish officials are not out of the woods, amid the uncertainty around the Middle East conflict.
In the meantime, investors see a nearly 69% chance that the Fed will hold rates unchanged, while odds for the December meeting continue to price in a 66% chance of a 25-basis-point rate hike, according to Prime Terminal.
Last week’s data bolstered Sterling as the UK economy grew above estimates in June. Now eyes are on employment data, with the ILO Unemployment Rate expected to drop from 4.9% to 4.8% in the 3-month rolling average to June. The Claimant Count Change in July is projected to rise from 6.7K to 11.2K.
Regarding the UK’s inflation data, the Consumer Price Index (CPI) is projected to rise from 0.1% to 0.3% MoM in July, while on an annual basis it is projected to rise from 2.6% to 2.9%. Meanwhile, core inflation is projected to tick lower from 2.6% to 2.5% YoY.
Aside from this, geopolitical headlines seem to resume at the beginning of the week as the Iranian Foreign Ministry stated that the “Islamabad agreement has not collapsed and the possibility of returning to it remains,” via Al Arabiya.
If the US-Iran conflict escalates, this would benefit the Greenback, as inflationary pressures push US yields higher. The US Dollar Index (DXY), which tracks the performance of the buck’s value against six currencies, is down 0.15% at 99.48.
GBP/USD Price Forecast: Technical Outlook
In the daily chart, GBP/USD trades at 1.3561, extending a constructive near-term bullish bias as spot holds above the simple moving average cluster around 1.3378 and former descending trend-line resistance now turned support near 1.3416. The pair is also trading over the broken downtrend from 1.3653, with that line now reinforcing support around 1.3504, while the upward-sloping trend line from 1.3159, currently projected near 1.3600, acts as the next immediate resistance. A firm Relative Strength Index (14) near 65 hints that bullish momentum remains in place, though not yet into overbought territory.
On the topside, a clear break above the nearby resistance zone around the rising support-turned-cap near 1.3600 would open the door to further gains toward higher swing highs beyond the recent range. On the downside, initial protection is provided by the cluster of supports just under the market, starting with the former descending line now cushioning the pair around 1.3504, followed by the prior breakout area near 1.3416 and the daily simple moving average around 1.3378, with a deeper floor aligning with the secondary rising trend base near 1.3354.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.15% | -0.17% | 0.03% | -0.03% | -0.39% | -0.27% | -0.45% | |
| EUR | 0.15% | -0.04% | 0.20% | 0.10% | -0.22% | -0.13% | -0.29% | |
| GBP | 0.17% | 0.04% | 0.24% | 0.14% | -0.16% | -0.09% | -0.25% | |
| JPY | -0.03% | -0.20% | -0.24% | -0.07% | -0.42% | -0.30% | -0.46% | |
| CAD | 0.03% | -0.10% | -0.14% | 0.07% | -0.35% | -0.24% | -0.40% | |
| AUD | 0.39% | 0.22% | 0.16% | 0.42% | 0.35% | 0.11% | -0.10% | |
| NZD | 0.27% | 0.13% | 0.09% | 0.30% | 0.24% | -0.11% | -0.16% | |
| CHF | 0.45% | 0.29% | 0.25% | 0.46% | 0.40% | 0.10% | 0.16% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
- Gold extends gains above $4,400 as fading expectations of an upcoming Fed rate hike weigh on the US Dollar.
- Focus shifts to Wednesday’s FOMC Minutes for more insight into the Fed outlook.
- XAU/USD holds above the 100-day SMA, although buyers struggle to extend the advance.
Gold (XAU/USD) extends its intraday advance on Monday, supported by fading expectations that the Federal Reserve (Fed) will raise interest rates at its September meeting, while the US Dollar (USD) remains on the back foot. At the time of writing, XAU/USD trades around $4,425, up 1.11% on the day.
According to the CME FedWatch tool, markets now see around a 70% chance that the US central bank will keep rates unchanged next month, up from 48% a week ago.
The change in expectations from a hike to a pause follows a run of disappointing US economic releases. Nonfarm Payrolls (NFP) fell in July, Retail Sales declined on a monthly basis, and both Consumer Price Index (CPI) and Producer Price Index (PPI) inflation slowed on an annual basis.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 99.50 after touching 99.30, its lowest level since June 5.
Gold retains a positive near-term bias, although buyers appear reluctant to push prices sharply higher. Developments in the Middle East remain in focus, particularly tensions around the Strait of Hormuz, which keep Oil prices elevated and energy-driven inflation risks alive.
US President Donald Trump reiterated on Monday that Iran would not be allowed to obtain a nuclear weapon as the 60-day memorandum of understanding expires without an agreement. Meanwhile, a senior Iranian official told Reuters that Tehran would escalate tensions in the Strait and across the wider region if diplomacy with Washington fails.
Persistent energy-driven inflation risks mean markets have not fully ruled out a rate hike later this year. Traders now await the Minutes of the July FOMC meeting on Wednesday for greater clarity on the Fed’s policy path.
Technical Analysis: XAU/USD holds bullish bias with 200-day SMA in sight
XAU/USD holds a constructive bullish bias as spot price hovers just above the 100-day Simple Moving Average (SMA) at $4,385. Momentum remains positive, with the Relative Strength Index (RSI) on the daily chart near 65 and the Moving Average Convergence Divergence (MACD) staying in positive territory, which together suggest that buyers retain control without pushing conditions into extreme overbought territory.
On the downside, immediate support is seen at the 100-day SMA around $4,385, with additional structural demand aligning lower at the horizontal level of $4,200 and the 50-day SMA near $4,147, ahead of a deeper floor at $4,000.
On the topside, the 200-day SMA at $4,506 is the next notable resistance, and a clear break above this longer-term average would likely open the door to a continuation of the recent uptrend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
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