Forex News
Here is what you need to know for Wednesday, July 22:
The US Dollar (USD) advances on Tuesday as escalating tensions between the United States (US) and Iran push energy prices higher and revive concerns that inflation could remain elevated. The Greenback also benefits from safe-haven demand despite softer US inflation and employment indicators.
The US Dollar Index (DXY) rises toward 101.20, extending its recovery for a fourth consecutive session. The ADP Employment Change four-week average declined to 16.5K from 19.25K, pointing to weaker hiring momentum, although geopolitical uncertainty and higher Oil prices remain the dominant market drivers.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.12% | 0.39% | 0.46% | 0.25% | -0.03% | 0.19% | 0.31% | |
| EUR | -0.12% | 0.27% | 0.34% | 0.16% | -0.13% | 0.07% | 0.20% | |
| GBP | -0.39% | -0.27% | 0.07% | -0.13% | -0.40% | -0.20% | -0.07% | |
| JPY | -0.46% | -0.34% | -0.07% | -0.20% | -0.46% | -0.27% | -0.13% | |
| CAD | -0.25% | -0.16% | 0.13% | 0.20% | -0.27% | -0.06% | 0.06% | |
| AUD | 0.03% | 0.13% | 0.40% | 0.46% | 0.27% | 0.20% | 0.32% | |
| NZD | -0.19% | -0.07% | 0.20% | 0.27% | 0.06% | -0.20% | 0.12% | |
| CHF | -0.31% | -0.20% | 0.07% | 0.13% | -0.06% | -0.32% | -0.12% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD trades slightly lower near 1.1400 as broad US Dollar strength outweighs the impact of softer US economic data. With no major Eurozone releases scheduled, the pair remains mainly driven by geopolitical developments and expectations surrounding the Federal Reserve’s (Fed) policy outlook.
GBP/USD falls toward 1.3380, losing around 0.4% as the Pound Sterling (GBP) underperforms amid concerns over the UK fiscal outlook and the leadership transition in the Labour Party. Investors are also cautious ahead of Wednesday’s UK inflation report, which could provide fresh signals about the Bank of England’s next policy steps.
USD/JPY climbs above 163.20 after breaking the 163.00 level for the first time since December 1986. The combination of rising US yields, higher Oil prices and persistent Japanese Yen weakness increases speculation that Japanese authorities could intervene to slow the currency’s decline.
AUD/USD remains nearly unchanged near 0.7000. The Australian Dollar (AUD) receives some support from softer US inflation and labor market data, but its upside remains limited by broad Greenback demand and caution surrounding the Middle East conflict.
West Texas Intermediate (WTI) Oil advances more than 2% to $84.50 per barrel as continued US-Iran strikes and threats to shipping routes raise concerns about global energy supplies. Two tankers carrying Saudi crude reportedly reversed course following threats from the Iran-aligned Ansar Allah in Yemen.
Gold rises nearly 2% toward $4,085 per troy ounce, supported by safe-haven flows and softer US inflation data. The precious metal gains despite a stronger US Dollar as investors assess the possibility of further escalation after US President Donald Trump threatened additional strikes against Iranian nuclear-linked facilities.
The United Kingdom (UK) Consumer Price Index (CPI) is expected to increase 0.1% MoM in June, slowing from 0.2%, while annual inflation is forecast to ease to 2.7% from 2.8%. Core CPI is expected to decline to 2.5% from 2.6%.
Australia will publish the Westpac Leading Index, while New Zealand will release Credit Card Spending data. China’s Foreign Direct Investment figures will also be monitored.
In the United States, attention will turn to MBA Mortgage Applications.
A Reuters poll revealed that the Federal Reserve is most likely to keep interest rates unchanged for the rest of the year as it battles stubbornly high inflation that has remained above the Fed’s 2% goal for at least 5 years.
Money markets are pricing in two rate hikes by the end of Q1 2027, sponsored by high Oil prices due to the Gufl War. Traders should be aware that Fed Chair Kevin Warsh said the Fed is resolute in bringing inflation back to its 2% target, hinting that they’re squarely focused on inflation and external shocks that could drive prices higher.
Data from Prime Terminal indicates there’s no chance of a rate increase at the July 29 meeting, with odds for a hold being at 77%. However, for the December meeting, there is an 81% chance that the Fed could raise rates.
The survey showed that 104 economists expect no change to the Fed funds rate at the July meeting, while 78 see the Fed holding rates for the rest of the year. Despite this, 66% of the respondents indicated that the chance of a rate hike is higher.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
BNY’s Geoff Yu highlights how China’s regulators and state-backed funds have stepped in to stabilize A-shares after global tech deleveraging hit domestic markets. Official buybacks and insurer commitments are framed as market protection rather than macro repair, with institutional flows into Chinese equities recovering and seen as an upside risk to APAC (Asia-Pacific) sentiment heading into month-end.
State-backed buying underpins Chinese markets
"China’s “national team” of regulators and state backed funds moved to calm A-share volatility on Monday after global tech deleveraging and profit-taking spilled into domestic markets. The China Securities Regulatory Commission held an investor symposium, signaling stronger supervision, investor protection and a commitment to stable market operations. At the same time, the so-called national team injected about ¥60bn through stock buyback re-lending facilities, with centrally administered state firms buying shares in SOEs, technology companies and ETFs."
"Our data indicate that this had been expected, as institutional flows last week jumped materially after material sales throughout much of June. As key levels approached, the signaling was clear, and we expect both domestic and cross-border participation to push higher. Whether retail participates is a different question: this group moved from clear selling interest in early April to strong purchases in mid-June – even absorbing some institutional sales – but the recent momentum turn is clear."
"Institutional pickup in Chinese equities, with official backing, is a clear upside risk to APAC sentiment heading into month end, especially with the customary end-July politburo meeting due to set the growth agenda for the rest of the year."
"China’s national team is offering market protection, not macro repair. State-backed equity purchases can stabilize benchmarks and reduce downside pressure, but they don’t solve weak domestic demand or the property drag. Beijing can protect prices, but confidence still requires a stronger growth impulse."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/JPY breaks above 163.00, raising the risk of intervention.
- Red Sea tanker diversions revive energy-supply concerns.
- Japan trade data, inflation, and the Fed decision drive the next move.
The USD/JPY extends its rally on Tuesday, hitting 40-year highs above 163.00 as the Greenback continues to gain ground versus the Japanese Yen. At the time of writing, the USD/JPY trades at 163.19, slightly shy of the multi-decade high of 163.24.
USD/JPY weakens as Gulf tensions lift US Dollar demand
The Gulf War continues as the US and Iran exchange strikes. Meanwhile, US President Donald Trump said that Iran wants to desperately meet, but he said that he doesn’t have any interest. He added that the US have not finished at all with Iran, and that they are not leaving now. At the same time, two oil tankers transporting Saudi Crude to Asia changed course in the Red Sea following threats from Yemen's Ansar Allah, which is aligned with Iran.
In the meantime, there’s growing speculation that Washington and Tehran may reach a deal. However, traders remain skeptical about a solution and bought the Greenback against most G8 FX currencies due to its safe-haven appeal.
The US Dollar Index (DXY), which measures the Greenback against a basket of currencies, gains 0.19% to 101.18, refreshing five-day highs.
Meanwhile, Japanese authorities remain mute about the Yen's weakness, though traders should be cautious that USD/JPY is above 160.00, a level seen as a line in the sand that could trigger an intervention.
Ahead, the Japanese economic docket will feature the release of the Merchandise Trade Balance Total for June, ahead of Thursday’s inflation report. In the US, traders are eyeing the release of Initial Jobless Claims data on July 23, while awaiting the Fed’s monetary policy decision next week.
USD/JPY price forecast: Technical outlook
In the daily chart, USD/JPY trades at 163.22, extending its advance above the clustered Simple Moving Averages (SMA) pack, with the latest composite reading near 160.75 now acting as underlying support. The pair also holds comfortably over the recent horizontal floor near 160.00 and the former trendline break zones at 158.52 and 154.61, reinforcing a bullish near-term bias, while the Relative Strength Index (RSI) at 66.66 stays in positive territory but shy of extreme overbought conditions.
On the downside, initial support is seen at the 160.75 composite SMA area, followed by the psychological 160.00 handle and the earlier uptrend break region near 158.52, with deeper structural backing coming from the longer-standing rising trendline originating around 152.10. With no significant resistance levels immediately overhead in this dataset, the spot remains technically supported, and any pullback toward the 160.75–160.00 band would likely be treated as a corrective dip within the prevailing uptrend as long as price holds above the 158.52 region.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Societe Generale’s technical team notes USD/KRW failed twice to break above the June high around 1,561, triggering a deeper decline towards the 200-day moving average. The pair is now testing this key MA, with next support at a multi-month ascending trend line near 1,464/1,461. A rebound from this zone could be capped by the recent pivot high at 1,491, keeping downside risks alive.
Trend line and 200-DMA guide Won
"USD/KRW struggled to surpass the June high around 1,561 on its second attempt, resulting in a deeper decline."
"The pair is now challenging the 200-DMA, previous pullbacks during February and May had found support around this MA."
"The next potential support is located at a multi-month ascending trend line near 1,464/1,461."
"Achievement of this zone could trigger a rebound; however, the recent pivot high of 1,491 may cap upside."
"Failure to break above 1,491 could result in an extended down move."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Silver challenges descending trendline as buyers regain short-term control.
- RSI strengthens, signaling bullish momentum may extend near-term rebound.
- Break above $60 exposes 50-day SMA and $67.17 resistance.
Silver price (XAG/USD) surges over 4.50% on Tuesday, reaching five-day highs, clearing $59.00 as buyers push the white metal to test a downslope resistance trendline near the $59.65/$50.75 range, about to surpass the $60.00 mark.
XAG/USD price forecast: Technical outlook
From a technical perspective, it seems XAG/USD is about to break a downtrend resistance line, which could open the door to a recovery. The Relative Strength Index (RSI) shows that buyers are gaining momentum, suggesting Silver could test higher levels in the near term.
If XAG/USD clears $59.75, the immediate test would be $60.00. A breach of the latter opens the path to challenge the 50-day Simple Moving Average (SMA) at $66.89 ahead of the June 22 daily peak at $67.17. Above, the next area of interest would be the psychological $70.00.
On the downside, Silver’s first support is the low of the day (LOD) at $56.11. Below lies $55.00, followed by the November 13. 2025 high turned support at $54.39, followed by the $55.00 milestone.
XAG/USD daily price chart
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.
- USD/CAD trades just above the 1.4100 handle, up around a fifth of one percent and rising for a second straight session.
- Washington opens the week with a 50% tariff round on most Canadian goods.
- Record US import prices show who actually pays for the tariff wall, but Ottawa is racing to the negotiating table anyway.
USD/CAD trades just above the 1.4100 handle into the North American afternoon, up around a fifth of one percent and on track for a second consecutive daily advance. The recovery follows the July slide from the year's high near 1.4250 down to the 50-day Exponential Moving Average (EMA), a floor the pair defended last week with the daily Stochastic Relative Strength Index (SRSI) pinned near zero. The bounce now has a fundamental author, because the trade war has found its way back to Canada's doorstep.
US threatens 50% tariff on most Canadian goods
The White House opened the week with a fresh 50% tariff round on most Canadian goods, framed by administration officials as retaliation for alleged trade discrimination against US products. The follow-through arrived Tuesday, when US Trade Representative Jamieson Greer said on television that action against dozens of countries is coming soon, putting flesh on reports of a broader wave being prepared before the current 10% global regime expires.
The pair spent the London morning drifting to a session low just above 1.4050 before the North American bid took over and carried it to fresh highs through the 1.4100 handle. The tape read the queue of tariff headlines the way it usually does, as a US Dollar story first and a Canadian growth story second.
Ottawa's answer was to reach for the calendar rather than the retaliation list. Prime Minister Mark Carney has agreed to accelerated trade talks with Washington, a concession to the arithmetic of the United States-Mexico-Canada Agreement (USMCA) review cycle. The US declined to renew the pact in its current form at the July 1 joint review, tipping the process into annual reviews that run until the deal is extended or expires in 2036.
The forecast said 5%, the White House said 50%
The awkward institutional detail is that the Bank of Canada's July Monetary Policy Report, finalised on 10 July, embedded an average US tariff rate on Canada of 5.0%, with 1.5% running the other way. Eleven days later, the posted number from the Trump administration on most Canadian goods is 50%. The report's Crude Oil conditioning was already conceded stale at the July press conference, and its tariff conditioning has now aged considerably worse.
The same document assumes the Loonie averages roughly $0.71 across the projection horizon, and every cent below that assumption imports inflation into an economy already in technical recession. Markets have run that arithmetic to its conclusion. A Bank of Canada hike is fully priced by the 9 December meeting, and a currency leaking lower on tariff risk hardens the case rather than softening it.
The bill lands at the US border
The under-covered half of the story is who actually pays for a tariff wall, and June's import price data answered it before this round was even announced. The US import price index printed a record 150.8 points, the highest reading on a series running back to 1982, with the annual rate at 7.1%, the fastest since August 2022. The index excludes tariffs by construction, so rising border prices under the tariff regime mean exporters are not absorbing the duties. That surcharge lands on the administration's own consumers.
The domestic hiring pulse is not obviously braced for it either. ADP's weekly employment gauge slowed to a 16.5K four-week average at 12:15 GMT this morning, down from a downwardly revised 19.25K and a fourth consecutive week of deceleration. A cooling labour market walking into a fresh import price shock is the shape in which the Federal Reserve (Fed) meets next week, with markets still carrying a fully priced hike by December as well.
The docket: Retail sales, flash PMIs, then the Federal Reserve
Canadian May Retail Sales open the local docket Thursday at 12:30 GMT, with consensus at 1% MoM headline and 1.4% ex-autos, both an acceleration, and an upside print would hand the December hike pricing another data point. Friday brings the preliminary July S&P Global Purchasing Managers Index (PMI) round out of the US at 13:45 GMT, with manufacturing expected at 54.5.
The heavier event sits the following Wednesday, July 29, when the Fed decides at 18:00 GMT with no forecast round attached, before Canadian May Gross Domestic Product (GDP) figures land Friday, July 31 at 12:30 GMT. Between a tariff shock, a stale forecast, and two central banks priced for hikes, the calendar offers the reclaim trade no shortage of catalysts.
Loonie technical levels
Resistance: The 1.4100 handle is the immediate cap, with the session high just above it. Through that, the 1.4150 June breakout shelf is the line the pair must reclaim to reopen the uptrend, and beyond it the year's high waits just below 1.4250.
Support: The session low just above 1.4050 is the first shelf. Beneath it, the 1.4000 handle forms the floor that absorbed the July selling.
Bias: Bullish while the pair holds above 1.4000. A daily close through 1.4150 opens a run at the year's high near 1.4250, while a daily close back beneath the region hands control to the sellers and puts the 200-day EMA just below 1.3900 in the frame.
USD/CAD 5-minute chart
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
Commerzbank’s Moses Lim and Dr. Henry Hao note that Singapore’s June non-oil domestic exports (NODX) growth moderated to 20.7% year-on-year but remained strong, with electronics exports surging on AI-related semiconductor demand. They stress that overall export prospects look resilient, as continued AI infrastructure investment should offset chemical-sector disruptions, while clearer global trade policies and easing Middle East tensions could support a recovery in non-electronics exports. USD/SGD trades near 1.2910.
AI demand supports NODX and SGD
"In H1 2026, NODX grew 18.6%, well above the government's full-year forecast of 3-5%, suggesting external demand remains resilient despite ongoing geopolitical and trade-related uncertainties."
"This suggests the global electronics upcycle remains intact, supported by sustained capex commitments from hyperscalers and cloud service providers."
"In addition, tariff-related headwinds could weigh on non-electronic exports."
"Nevertheless, the tariff impact may prove less severe than feared, given that most economies are expected to face a baseline 10% tariff on shipments to the US."
"Overall, the export outlook remains resilient as continued AI infrastructure investment could support electronic shipments and offset supply chain disruptions in the chemical sector."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Trump weighs ceasefire or full-scale Iran war, lifting safe-havens.
- Rising Oil prices fuel inflation and Fed hike concerns.
- Jobless claims and Fed decision anchor next policy catalyst.
Gold price surges on Tuesday during the North American session, up by more than 1.50% amid continued missile strikes between the US and Iran despite mediators' efforts to end the war. The XAU/USD trades at $4,071
XAU/USD gains as ceasefire doubts revive safe-haven demand
The yellow metal is gathering traction even as US Treasury yields and the Greenback register gains. Oil prices are also rising as Ansar Allah threatens to attack vessels in the Red Sea, adding to fears for Crude supply disruptions.
Newswires revealed that the US is demanding a longer ceasefire and partial navigation in Hormuz. Meanwhile, Iran proposed a 10-day ceasefire.
Other news showed that US President Donald Trump is considering whether to accept Iran’s 10-day ceasefire or to launch a full-scale war on Iran. A US official hinted that if the President chooses the latter, the strikes could target Tehran and Iran’s nuclear sites.
This week, the US economic calendar is quiet. The ADP Employment Change 4-week average decreased to 16.5K from 19.25K. On Wednesday, the docket is absent, followed by Thursday’s Initial Jobless Claims, leading up to the Federal Reserve’s (Fed) monetary policy meeting on July 29.
In the meantime, the US 10-year Treasury yield is rising by nearly 3.5 basis points to 4.628%, usually a headwind for Bullion, which tends to edge lower due to its non-yielding nature. Consequently, the US Dollar Index (DXY), which measures the US Dollar against six others, advances 0.12% to 101.11.
Expectations that the Fedmight increase the pace of rate hikes in 2026 are surging, driven by elevated Oil prices as Gulf supply disruptions stoke inflation fears and fuel speculation of higher interest rates for a longer period.
Prime Terminal data indicates a 78% probability that the Fed will hold rates steady at next week’s meeting, while the likelihood of a September hike is about 68%.
XAU/USD technical outlook: Gold price recovers yet is poised to consolidate
Gold is poised to continue trending sideways, though it’s trading near five-day highs approaching $4,100. Momentum is moderately bullish in the short term as the Relative Strength Index (RSI) is approaching the 50-neutral level.
From a market structure perspective, the trend is downward. To restart an upward trend, Gold needs to clear the resistance trendline circa $4,125. Once cleared, the next higher-high will be the July 10 high at $4,134, ahead of the July 6 peak at $4,202. A breach of the latter will put the 50-day Simple Moving Average (SMA) at $4,264 into play.
For a bearish continuation, Bullion needs to clear the $4,000 mark. Below is the July 17 low at $3,959, followed by $3,900. If sellers continue to drive prices lower, the next area of interest would be the October 28, 2025 low of $3,886.
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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