Forex News
- WTI Oil holds recent gains as supply risks in the Middle East stay in focus.
- The Strait of Hormuz remains the main driver of Oil prices as the US and Iran make conflicting claims about the waterway.
- Technically, WTI retains a mild bullish bias but faces strong resistance near the 100-day SMA at $86.
West Texas Intermediate (WTI) holds firm on Tuesday after jumping 3% the previous day. The lack of progress toward reopening the Strait of Hormuz keeps a geopolitical risk premium in energy markets.
At the time of writing, the US Oil benchmark trades around $84.47 per barrel, hovering near its highest level in over two weeks.
US President Donald Trump said in a Truth Social post on Tuesday that “there are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran,” adding that the US naval blockade “remains in full force and effect.”
However, the US and Iran make conflicting claims about the Strait of Hormuz. Trump claimed that “the Hormuz Strait is open and operating” and that all water mines had been removed or detonated.
In contrast, Iran’s top negotiator, Mohammad Bagher Qalibaf, said the waterway would remain closed until the United States meets the conditions of the interim agreement, according to state media.
Separately, Iran and Oman are holding talks on the joint management of the Strait. A spokesperson for Qatar’s Foreign Ministry said mediators are waiting for the two countries to reach a bilateral agreement on Hormuz before returning to broader US-Iran negotiations.
Technical analysis
On the daily chart, WTI holds a neutral near-term tone as price sits between key moving averages. The Relative Strength Index (RSI) near 56 suggests moderately constructive momentum, and the Moving Average Convergence Divergence (MACD) is positive, hinting at a mild bullish bias in price pressure despite a relatively weak trend signaled by the Average Directional Index (ADX) around 17.
On the downside, initial support is located at the 50-day SMA around $78, with a deeper structural floor at the 200-day SMA near $76 if sellers regain control. On the topside, the first hurdle is the 100-day SMA at $86, and a clear daily close above this barrier would open the door for a stronger recovery phase, whereas repeated failure below it would keep WTI confined to a consolidative range above its medium- and long-term averages.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Commerzbank’s Carsten Fritsch notes that Gold remains around USD 4,400 per ounce even as US Treasury yields rise back toward late-July levels, decoupling from real interest rates. He suggests markets may doubt the Fed’s willingness or ability to hike sufficiently, or fear fiscal risks, both supportive for Gold, with ETF flows showing renewed investor interest after recent outflows.
Higher yields fail to derail Gold
"The gold price is holding at around USD 4,400 per troy ounce, thereby defying the rise in oil prices and US bond yields."
The yield on 10-year US Treasuries reached 4.74%, almost returning to the level seen at the end of July, whilst the yield on 30-year Treasuries exceeded 5.3% for the first time since 2007. As market-based inflation expectations have hardly changed since then, real interest rates have also returned to the level seen at the end of July. By way of comparison: at that time, gold was trading at USD 4,040, i.e. significantly lower."
"Although the interest rate expectations reflected in Fed Funds futures have risen marginally in recent days, they remain significantly lower than at the end of July. One interest rate hike is priced in by the end of the year. At the end of July, this figure was 13 basis points higher."
"The rise in yields is therefore not attributable to increased expectations of interest rate hikes, but appears to have other causes."
"It could be, for instance, that the market doubts the Fed will raise interest rates sufficiently to combat inflation effectively. Another possible explanation is fiscal risks – notably rising government debt – which are also likely to preclude a more substantial increase in key interest rates."
"Both of these explanations would clearly be positive for gold."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Gold prices continue to draw support from expectations that the Federal Reserve (Fed) will hold interest rates steady through the remainder of the year after softer US inflation and employment data.
However, while money managers have aggressively built long exposure, energy price volatility originating from tensions in the Middle East presents a key capping risk. With potential Oil price spikes threatening to reignite inflation and reshape Fed rate expectations, the precious metal is likely to remain locked in a defined trading range.
Fed pause expectations and soft USD boost speculative long positioning
According to TD Securities strategists, speculation that the Fed will refrain from further rate increases this year has provided a strong tailwind for precious metals. A combination of modest inflation metrics, lackluster employment data and short-end yield stabilization appears to have convinced speculative traders that the US Dollar is on a downward path.
Consequently, asset managers have heavily built out long Gold positions, though a subset of traders maintain downside hedges against unexpected Oil-driven rate shocks.
Traders are hypothesizing that the Fed will not pull the trigger on rate hikes this year, which has subdued interest rates on the short end of the curve and convinced specs that the USD is headed lower.
Middle East energy risks cap near-term upside for Gold
TD Securities also points out that while political concerns and labor market soft spots bolster the Fed pause narrative, near-term price gains for Gold will likely remain constrained. Ongoing hostilities in the Persian Gulf keep energy supply lines vulnerable. Should an Oil price surge trigger renewed inflation concerns, the bar for the Fed to re-evaluate its rate path remains low, forcing traders to adjust policy pricing upward.
Such a development [an oil price surge] would likely force gold traders to reprice policy expectations to reflect higher Fed funds rates this year and next.
Strategists project Gold to trade range-bound
TD Securities projects a consolidated holding pattern for Gold in the near to medium term. The risk of higher interest rates driven by energy market uncertainty is expected to anchor the precious metal within a $4,200–$4,500/oz corridor into early 2027. However, once inflation pressure subsides, the metal is poised to break out toward higher levels later in 2027.
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Euro consolidates below its two-month high as the US Dollar stages a modest recovery.
- US-Iran tensions keep Oil prices elevated and inflation concerns alive.
- Markets expect the Fed to hold rates in September, while the ECB is widely expected to raise borrowing costs.
EUR/USD consolidates losses on Tuesday after pulling back from a two-month high of 1.1614 reached the previous day. A firmer US Dollar (USD) weighs on the Euro (EUR), while traders show a muted reaction to the latest economic releases as market sentiment remains tied to developments in the Middle East and their impact on monetary policy expectations. At the time of writing, the pair trades around 1.1578.
In the United States (US), the four-week average of the ADP Employment Change rose to 9.5K in the week ending August 1 from 8.25K previously. Meanwhile, the Eurozone ZEW Survey showed that Economic Sentiment improved sharply to 31.4 in August from 23.4, beating the market forecast of 25.4.
Despite the stronger Eurozone sentiment reading, the Euro struggles to gain traction as rising US Treasury yields provide some support to the Greenback. The US Dollar Index (DXY), which tracks the US Dollar against a basket of six major currencies, trades around 99.60 after recovering from the two-month low of 99.30 touched on Monday.
Still, the US Dollar’s strength appears limited in the near term as a run of weaker US economic data prompts traders to scale back Federal Reserve (Fed) rate-hike expectations. According to the CME FedWatch Tool, markets now see around a 65% probability that the Fed will leave interest rates unchanged next month, compared with earlier expectations for a hike.
Nevertheless, the US-Iran standoff over the Strait of Hormuz keeps the inflation outlook uncertain. US President Donald Trump said Washington is not seeking an extension of the memorandum of understanding with Iran, which expired on Monday, reducing hopes for a peace agreement and the reopening of the key waterway in the near term.
Elevated Oil prices raise the risk that inflation stays above the Fed’s 2% target for longer, preventing markets from fully ruling out a rate hike later this year. Meanwhile, the European Central Bank (ECB) is widely expected to raise interest rates in September.
ECB Chief Economist Philip Lane said on Tuesday that Eurozone inflation running “one percentage point above the ECB’s 2% target is a lot” and expects it to “hover around the 3% level for the rest of the year.”
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.
TD Securities analysts describe Copper’s current strength as driven by speculative positioning, tariff-related arbitrage and supply disruption headlines rather than genuine global shortage. Looking ahead, they expect softer demand, normalization of trade flows and returning mine capacity to erode tightness and pull Copper down from present elevated levels as surpluses emerge through 2027.
From speculative tightness to surplus
"Our copper price projections remain constructive, as money managers continue to double down on the red metal."
"With little clarity around Section 232 tariffs, a supportive arbitrage continues to draw copper into the U.S., reshuffling inventories across regions rather than reflecting an outright global shortage of metal."
"Supply disruption headlines, including the DRC's immediate ban on concentrate exports, have added another layer of concern, helping to drive prices higher and offset weakening industrial demand."
"Looking ahead, we expect softer demand and a normalization of tariff-driven trade flows to erode some of the tightness currently embedded in copper prices."
"As a result, improving market fundamentals should pull copper down from the $14,000+/t levels currently reflected in the market."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
BNY’s Geoff Yu highlights that foreign holdings of New Zealand government bonds rose to 58.9% in July 2026, while NZD/USD trades slightly above its 12‑month average. Despite robust domestic activity, Yu doubts current market pricing that implies two more RBNZ hikes by year-end, arguing well-anchored inflation expectations and stable nontradables inflation soften the case for further tightening.
Foreign demand vs. rate expectations
"New Zealand’s central bank data show foreign investors held 58.9% of government bonds in July 2026, up from 57.7% in June. Nonresident holdings rose to NZ$122.47bn from NZ$115.53bn, while non-resident repo holdings edged down to NZ$11.02bn from NZ$11.09bn."
"The NZD itself is now trading slightly above the rolling 12-month average, but we continue to doubt the current market pricing of interest rates expectations, where two more Reserve Bank of New Zealand (RBNZ) hikes are expected by year end. Domestic activity remains robust, but inflation expectations remain relatively well-anchored."
"Nontradables inflation is relatively stable, and if the RBNZ looks past headline price risks, the domestic case for tightening softens considerably."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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