Forex News
Commerzbank’s Norman Liebke reports that Silver has fallen from USD 70 to USD 57.50 per troy ounce and that the bank has lowered its forecasts, now seeing USD 67 by year-end and USD 80 by end‑2027. Despite substitution in solar and Indian import curbs, persistent market deficits and an expected Gold recovery are seen underpinning higher Silver prices ahead.
Deficits and Gold seen lifting Silver
"Nevertheless, the silver price is likely to continue rising in the coming months: According to forecasts by the Silver Institute and the research firm Metals Focus, the silver market was in a supply deficit for the fifth consecutive year last year."
"Another deficit is expected this year, as supply is projected to decline more sharply than demand."
"In addition to the fundamentals and the tight market, the rise in the gold price we anticipate is the main driver of the expected rise in the silver price."
"By year-end, we expect the silver price to reach USD 67 per troy ounce (previously: USD 80) and USD 80 by the end of 2027 (previously: USD 90)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/JPY remains near 163.80 despite softer US consumer confidence figures.
- Trump says he wants to avoid targeting Iranian power plants and bridges but maintains pressure on Tehran to reach a deal.
- Tokyo core CPI is expected to rise to 1.7% YoY, while unemployment is forecast to remain at 2.5%.
USD/JPY trades slightly higher near the 163.80 area on Tuesday, remaining close to multi-decade highs as the Japanese Yen (JPY) struggles to attract demand. Softer United States (US) consumer confidence data limited the US Dollar’s advance, although the pair maintained its upward bias.
The Conference Board Consumer Confidence Index declined to 90.8 in July from an upwardly revised 92.2 in June. The Present Situation Index fell for a third consecutive month to 114.9, while the Expectations Index remained unchanged at 74.7, suggesting that US households remain cautious about business and labor market conditions.
Geopolitical uncertainty also remains in focus. US President Donald Trump said Washington has a “very strong position” with Iran and described Pickaxe Mountain as “not a big problem.” Trump added that he would prefer to avoid attacking power plants and bridges and said he was “not looking to do that,” although he maintained that the US could strike additional targets if Tehran fails to reach an agreement.
Investors now await Tokyo inflation and employment figures. Tokyo CPI excluding fresh food is expected to accelerate to 1.7% YoY in July from 1.6%, while headline inflation previously stood at 1.7%. CPI excluding food and energy was previously 1.9%, and Japan’s Unemployment Rate is forecast to remain unchanged at 2.5%.
Short-term technical analysis:
On the 4-hour chart, USD/JPY trades at 163.85. The pair retains a bullish near-term bias as it holds above both the 20-period Simple Moving Average (SMA) at 163.76 and the 100-period SMA at 162.65, keeping the broader uptrend structure intact despite recent consolidation. The Relative Strength Index (RSI) at 60.60 has eased from overbought territory but still points to constructive momentum, suggesting dips are likely to attract buyers while the price remains supported by these averages.
On the topside, immediate resistance is located at the recent horizontal cap near 163.96, where a clear break would open the way for a fresh leg higher. On the downside, initial support aligns around 163.76, where a horizontal level converges with the 20-period SMA, followed by additional cushions at 163.64 and 163.59; a deeper pullback toward the 100-period SMA at 162.65 would be needed to materially challenge the prevailing bullish structure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- USD/CHF retreats from multi-month highs as traders await the Federal Reserve interest rate decision.
- The Fed is expected to keep rates unchanged while maintaining a hawkish policy stance.
- The SNB’s zero-interest-rate policy keeps the Franc attractive for carry trades, limiting the scope for a sustained recovery.
The Swiss Franc (CHF) steadies against the US Dollar (USD) on Tuesday as the Greenback gives up its early gains, with traders turning cautious ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. At the time of writing, USD/CHF trades flat around 0.8184, retreating from an intraday high of 0.8205, its highest level since June 2025.
The Greenback weakens as Oil prices extend their pullback following a pause in attacks between the United States and Iran. Lower energy prices ease inflation concerns and drag US Treasury yields lower.
US President Donald Trump said on Tuesday that it was a “good time for Iran to make a deal,” but warned that the US would “go back and finish the job” if no agreement was reached.
The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades around 101.35, easing from 101.64, its highest level in a month.
US economic data offered little support. The Conference Board’s Consumer Confidence Index fell to 90.8 in July from an upwardly revised 92.2 in June.
The US central bank is widely expected to leave the federal funds rate unchanged at 3.50%-3.75%, although the CME FedWatch Tool shows that markets price in around a 30% chance of a 25-basis-point rate hike.
US inflation is running well above the Fed’s 2% target. While the pullback in Oil prices eases some immediate inflation concerns, upside risks persist. Even if the Fed leaves rates unchanged, policymakers are expected to retain a hawkish stance, which could keep the US Dollar supported.
Meanwhile, the Swiss Franc has been among the worst-performing major currencies since the US-Iran war began. The Swiss National Bank's (SNB) zero-interest-rate policy makes the Franc attractive for carry trades, while broad-based US Dollar strength and the central bank’s readiness to counter excessive Franc appreciation add to the pressure.
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.19% | -0.02% | 0.05% | -0.14% | 0.21% | -0.24% | -0.12% | |
| EUR | 0.19% | 0.17% | 0.24% | 0.04% | 0.40% | -0.03% | 0.08% | |
| GBP | 0.02% | -0.17% | 0.07% | -0.09% | 0.27% | -0.18% | -0.06% | |
| JPY | -0.05% | -0.24% | -0.07% | -0.18% | 0.17% | -0.27% | -0.13% | |
| CAD | 0.14% | -0.04% | 0.09% | 0.18% | 0.36% | -0.11% | 0.04% | |
| AUD | -0.21% | -0.40% | -0.27% | -0.17% | -0.36% | -0.42% | -0.31% | |
| NZD | 0.24% | 0.03% | 0.18% | 0.27% | 0.11% | 0.42% | 0.14% | |
| CHF | 0.12% | -0.08% | 0.06% | 0.13% | -0.04% | 0.31% | -0.14% |
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).
- DJIA adds close to 700 points to trade just short of 52,900, roughly 450 points beneath the record set in the first week of July.
- Healthcare and financials reach record highs, while the technology sector sits at its lowest level since early May.
- Both conditions the rotation depends on, cheaper energy and a rate curve that stays put, get tested inside 48 hours.
The Dow Jones Industrial Average (DJIA) trades just short of 52,900 on Tuesday, higher by close to 700 points and 1.3%, roughly 450 points beneath the record it set in the first week of July. Taken alone, that reads as a broad risk rally. One index over, the semiconductor complex is in a drawdown that has taken more than 20% out of the sector this month, and Korea's benchmark tripped its ninth circuit breaker of the year overnight on a fall of nearly 11%.
The selling has a destination
Nine of the 11 S&P 500 sectors trade higher on the session. Healthcare and financials both reach record highs, led by insurers, while consumer staples add close to 4% on the strength of a single earnings report. The technology sector, on the same tape, sits at its lowest level since the first week of May.
That is not a market selling off but a market changing seats. Cash exiting the names that carried the tape to records has to arrive somewhere, and it is arriving in exactly the old-economy exposure the DJIA is built out of. The leap is real. A good part of it is also borrowed.
An index that cannot feel the rout
Price weighting converts a pair of earnings beats into an outsized number of index points. Sherwin-Williams (SHW) adds 8% on a second-quarter beat and a raised full-year outlook, and as one of the highest-priced names in the thirty it pulls more index points behind it than any equal-weighted structure would grant. Coca-Cola (KO) adds 5% on a beat at both lines with guidance lifted alongside it.
Micron (MU) falls about 9% and Advanced Micro Devices (AMD) about 6% in the same session, and neither costs the index a single point, because neither is a member. Nvidia (NVDA) is the only chipmaker in the thirty, and the largest names in that complex have been handled far more gently this month than memory and equipment makers down 20% to 50%. What the benchmark does not carry matters more than what it does.
Software supplies the rest of the lift, with Microsoft (MSFT) adding 2% and Salesforce (CRM) 5%, both of them members, while Apple (AAPL) leads through a $5 trillion market value ahead of its own results later this week. The composition that made this index look sluggish through two years of an artificial intelligence melt-up is the composition paying now.
Two conditions, both tested inside 48 hours
The rotation into cyclical and rate-sensitive exposure runs on two things, cheaper energy and a rate curve that does not shift higher. Crude Oil is delivering on the first, with West Texas Intermediate roughly 5% lower near $78.00 and Brent just below $84.00, a decline driven by diplomacy rather than by barrels.
Iran's foreign ministry held separate calls with its Saudi and Omani counterparts on the Strait of Hormuz, and Muscat has reportedly put a Gulf-backed plan in front of Tehran built on voluntary transit contributions rather than tolls imposed by Iran. Trump publicly credits the exchanges as productive, while Tehran denies that any direct negotiation with Washington is under way. Verified transits through the Strait ran to fewer than 30 across the entire weekend, against roughly 100 vessels a day before the war.
The second condition gets its answer at 18:00 GMT on Wednesday. A hold at 3.75% is the base case, with futures pricing the July increase near one in three and cumulative odds of at least one hike by the September meeting close to 80%. Four de-escalations since April have bought equity index points and no relief whatsoever at the front end of the curve.
The week's real tests
Wednesday's statement lands at 18:00 GMT with the press conference at 18:30 GMT. Forward guidance has been struck from the statement, so the vote tally carries the message, and a hold arriving with dissents reads nothing like the unanimous hold delivered in June.
Thursday at 12:30 GMT brings the June Personal Consumption Expenditures (PCE) price data. The PCE headline gauge is seen at -0.1% MoM and 3.7% YoY from 4.1%, with the core measure at 0.2% MoM and 3.3% YoY. Second-quarter Gross Domestic Product arrives in the same window at 2.1% annualized, alongside Initial Jobless Claims seen at 200K against 187K.
Friday fills in the wage and survey side, with the second-quarter Employment Cost Index at 0.8%, the Chicago Purchasing Managers Index at 56 and Michigan Sentiment at 54. The one-year inflation expectation is seen unchanged at 4.2%, and that is the figure deciding whether this month's energy relief has reached the household yet.
Levels and bias
Resistance: The session high just short of 52,900 is the immediate line, and clearing it opens the 53,000 handle with the record just above 53,300 as the objective beyond.
Support: The 52,600 area is the first shelf beneath spot, then the 52,200 area carrying both the session low and Monday's close. The 52,000 handle sits under that, with the 50-day Exponential Moving Average near 51,600 the trend defence of last resort.
Bias: Bullish above the 52,600 area, objective the record just above 53,300, invalidation on a daily close back beneath 52,200. The daily Stochastic Relative Strength Index near 20 is describing the range the index just left rather than the breakout it is making, while the five-minute reading above 90 puts the stretch squarely intraday, so the near-term risk is a pause and not a reversal.
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.
- EUR/GBP trades above 0.8550, on track for its eighth gain in nine sessions and more than a hundred pips above the mid-July low just over 0.8450.
- The posted policy-rate gap has not moved a basis point since June, so this recovery is a repricing of the British side rather than a European revival.
- Thursday delivers euro-area second-quarter growth at 09:00 GMT and a Bank of England decision at 11:00 GMT, with a fresh forecast round and a press briefing attached.
The Euro is on track for its eighth gain in nine sessions against the Pound, and the explanation that would normally cover a run of that length is not available. Bank Rate sits 150 basis points above the European Central Bank deposit rate, precisely where it has sat since the middle of June, and that spread is what dragged this cross to a one-year low in the first place. The gap has not moved. The cross has.
The spread that never narrowed
Currencies do not trade the rate differential printed on the screen. They trade the one the forward curve expects to exist in six months, which is how a cross can sit still for weeks under an enormous posted gap and then travel a full percent while that gap is unchanged. Since the middle of July the expected differential has narrowed steadily, and almost all of that narrowing has come from the British side.
The mid-July low just over 0.8450 marked the point of maximum agreement that the Bank of England would stay restrictive for longer than the European Central Bank. That view has been taken apart in stages since, mostly by British data and partly by a European central bank that has quietly told the market it has more to do.
One committee is loading while the other unloads
The European Central Bank held at 2.25% on 23 July, unanimously, then used the press briefing to make a September move sound close to inevitable. The President disclosed that some Governing Council members had asked whether rates should rise immediately, and warned that the longer energy costs stay elevated, the more likely they are to leak into broader prices through second-round effects. Roughly 70% odds of a quarter-point September move are now priced, with fresh staff projections landing at that meeting.
The Bank of England arrives on Thursday with the opposite problem. June Consumer Price Index (CPI) inflation cooled to 2.6% with services down to 3.6%, pay growth is decelerating, and forecasters expect the new Monetary Policy Report to show inflation peaking near 3% later this year. That projected peak is the whole argument, because a peak nearer 4% has previously been treated as the point at which second-round effects become statistically likely. A forecast topping out a full percentage point below that line disarms the Committee's own hawks.
Both tightening cases rest on the same barrel of Crude Oil, which is the part nobody is pricing consistently. The Gulf stand-down has pulled energy well off its July highs and weakened the inflation impulse on both sides of the Channel, and yet only one front end has repriced for it.
What the Pound was actually paid for in July
July was the best month the Pound has had in years, and it stood on three legs. Political risk unwound as an uncontested succession replaced the contest markets had feared, speculative shorts covered into the move, and traders held a firm expectation of another Bank of England hike before year-end.
Two of those legs have already been collected. The political premium was released the day Andy Burnham walked into Downing Street, and the hike expectation has been draining away since the June inflation print. What is left is carry, a thin defence for a currency heading into an October Budget with the highest long-end government yields in the Group of Seven behind it and borrowing above the official forecast.
Positioning tells the same story from the other end. One widely watched measure had the Pound more technically stretched against the Euro than at any point since before the Brexit referendum, and a July survey of investment banks found a clear majority expecting this cross back into the 0.8700 to 0.8900 area through 2027. Crowded trades do not need bad news to unwind, only the absence of fresh good news.
Thursday does the deciding
Thursday opens at 09:00 GMT with preliminary euro-area second-quarter growth, consensus 0.2% QoQ against a 0.2% contraction previously and 0.5% YoY from 0.3%. Unemployment is seen holding at 6.2% and the Economic Sentiment Indicator improving to 96 from 95. Friday adds the euro-area flash inflation estimate, headline seen at 2.9% YoY from 2.8% with core steady at 2.4%.
The Bank of England follows at 11:00 GMT, consensus a hold at 3.75% on a 7-2 vote, none for a cut and two again preferring 4.00%, with the Monetary Policy Report and minutes attached and a press briefing half an hour later. The hold carries no risk because it is fully priced, which leaves the vote split as the only live variable, and the asymmetry there runs one way. A third hawkish dissent would be a real shock against a forecast round showing a lower peak, while an 8-1 split or a unanimous hold confirms what that forecast already implies.
Technical levels
Resistance: The 50-day Exponential Moving Average just under 0.8600 is the first obstacle, and price has traded beneath it since late June. Above it sits the 0.8600 handle, then the declining 200-day Exponential Moving Average just under 0.8650, the level separating a retracement from a trend change.
Support: The 0.8550 shelf is immediate, defended at the session low just underneath. Beneath that, 0.8500 is the first real test of the recovery, with the mid-July base just over 0.8450 the line that ends it.
Bias: Bullish while above 0.8550, with the daily Stochastic Relative Strength Index turning up out of its July trough and Thursday's event risk skewed toward a softer British outcome. Objectives are the 50-day average just under 0.8600 and then the 0.8600 handle, with 0.8650 the decision point. Invalidation on a daily close back beneath 0.8500.
EUR/GBP daily chart
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the 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.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- Silver declines 1.7% on Tuesday, trading around $57.40 at the time of writing.
- Hopes for negotiations between the US and Iran are reducing demand for safe-haven assets.
- Investors await the Federal Reserve's monetary policy decision later this week.
Silver (XAG/USD) trades around $57.40 on Tuesday at the time of writing, down 1.7% on the day. The white metal is under pressure as the US Dollar (USD) loses some strength and investors reduce their exposure to safe-haven assets ahead of the Federal Reserve's (Fed) monetary policy decision.
Market sentiment improves following the latest comments from US President Donald Trump, who says the United States (US) is holding "good talks" with Iran. The US President also says he wants to avoid targeting critical infrastructure such as power plants and bridges, while warning that Iran can no longer break agreements. These remarks fuel hopes of a de-escalation in the Middle East conflict, contributing to lower Oil prices and easing concerns over renewed inflationary pressures.
Despite the improvement in geopolitical sentiment, risks have not disappeared completely. Donald Trump warns that US military strikes could resume if negotiations fail, while several security incidents reported in Saudi Arabia, Jordan and Iraq highlight that regional tensions remain elevated.
Investors are also digesting several US economic releases published on Tuesday. The Conference Board Consumer Confidence Index eased to 90.8 in July from 92.2 previously, reflecting a slight deterioration in household sentiment. Meanwhile, the four-week average of the Automatic Data Processing (ADP) NER Pulse report shows that private-sector job creation slowed to just 15K jobs per week in mid-July, confirming a gradual cooling in the labor market.
Attention now turns to the Fed's policy decision on Wednesday. Markets widely expect policymakers to leave interest rates unchanged, but investors will closely monitor the central bank's statement and comments from Fed Chair Jerome Powell for fresh clues on the future path of monetary policy.
(This story was corrected at 16:31 GMT to say in the first paragraph that the US Dollar is losing strength not regaining strength)
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.
- WTI falls below $80, extending Monday’s 9% decline as the pause in US-Iran attacks reduces the geopolitical risk premium.
- The technical outlook turns bearish below the 50-day SMA, with the 200-day SMA at $74.78 offering key support.
- Momentum weakens as the RSI retreats below 50 and the positive MACD loses strength.
West Texas Intermediate (WTI) Oil extends its decline on Tuesday after falling 9% the previous day following a pause in attacks between the United States and Iran. At the time of writing, WTI trades around $77.90, down nearly 4% on the day.
Easing hostilities between the US and Iran have raised hopes that security risks around the Strait of Hormuz could ease, prompting traders to unwind part of the geopolitical premium built into Oil prices.
US President Donald Trump said on Tuesday that it was a “good time for Iran to make a deal,” but warned that the US would “go back and finish the job” if no agreement was reached.
Separately, Oman presented Iran with a proposal for the joint management of the Strait of Hormuz through “voluntary fees,” under which Tehran would not exercise sole control over the key shipping route.
Despite the diplomatic efforts, the pullback could prove short-lived. The risk of renewed military action is likely to keep a geopolitical premium embedded in Oil prices, leaving WTI vulnerable to sharp swings.
From a technical perspective, WTI has failed to hold above the 100-day Simple Moving Average (SMA) at $88.19, which it briefly reclaimed last week. Prices have now slipped below the 50-day SMA at $81.26, pointing to a bearish near-term bias.
Momentum indicators offer mixed signals. The Relative Strength Index (RSI) has slipped below the neutral 50 level after briefly entering overbought territory, while the Moving Average Convergence Divergence (MACD) is still positive but losing altitude, which hints at waning upside pressure.
On the downside, the 200-day SMA at $74.78 provides key support. A decisive daily close below this level could open the door to a deeper decline toward the pre-war region of $67-$65.
On the upside, initial resistance is located at the 50-day SMA at $81.26. A sustained break above this barrier would expose the 100-day SMA near $88.19, followed by the psychological $90 mark.
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.
- The US Dollar loses some upside momentum and slips back toward the daily lows.
- US Treasury yields extend the drop to multi-day lows across the curve.
- The Fed begins its two-day meeting and is expected to keep rates unchanged.
The Greenback, when tracked by the US Dollar Index (DXY), abandons the area of monthly peaks and recedes toward the 101.30 zone on turnaround Tuesday.
A test of YTD peak remains in place
The US Dollar’s correction comes after three consecutive daily advances and seems to have met a tough nut to crack in the 101.60-101.70 band, a region close to its yearly highs around 101.80 recorded in late June. Despite the daily pullback, the index continues to trade well above its key 200-day SMA, keeping the short-term constructive outlook in place and allowing for extra advances down the road.
Oil, yields and inflation
Cooling tensions in the Middle East have been collaborating with the severe pullback in crude oil prices. That said, prices for a barrel of the American benchmark for sweet light Crude Oil (WTI) have retreated for the third consecutive day, breaching the key $80.00 mark and hitting new two-week troughs.
By the same token, inflation fears seem to have shrunk a tad, motivating US Treasury yields to extend their corrective move across the spectrum, all at the time when market participants continue to assess the potential Fed rate path prior to the FOMC event on Wednesday.
On the latter, the central bank is widely anticipated to keep its hand steady once again, leaving its Fed Funds Target Range (FFTR) intact at 3.25%-3.75%. Meanwhile, US inflation is expected to gather all the attention of the media questions, particularly in light of the softer-than-expected CPI data in June and the current cooling of geopolitical effervescence and its impact on consumer prices going forward.
Back in the US, disappointing data from the Conference Board’s Consumer Confidence gauge accompany the move lower in the buck. Next on tap is the API’s weekly release of US crude oil inventories ahead of Wednesday’s official data by the EIA.
Technical view
In the daily chart, the US Dollar Index trades at 101.29. The near-term bias is bullish, with price holding above the 55-day, 100-day and 200-day simple moving averages (SMAs), which cluster between roughly 99.1 and 100.3 and reinforce an underlying uptrend. Momentum remains constructive, as the 14-period Relative Strength Index at 57 stays comfortably above the midline, while the Average Directional Index around 26 suggests a modest but still active trend rather than an exhausted move.
On the topside, initial resistance is outlined by the recent horizontal cap at 101.98, where a daily close higher would open the way for further gains. On the downside, immediate support is seen at 100.64 and then 100.39, with a deeper pullback eyeing the 99.50 area ahead of the 55-day SMA near 100.30 and the 100-day SMA around 99.72; a break below these moving averages would expose the more distant structural floors at 97.62 and the mid-95.00s.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- EUR/USD rises around 0.3% and approaches 1.1400 as the US Dollar Index falls toward 101.30.
- German IFO Business Climate improved to 86.6, driven by a sharp recovery in companies’ expectations.
- US Consumer Confidence declined to 90.8, while the Bundesbank said Germany likely recorded modest second-quarter growth.
EUR/USD trades higher near the 1.1400 area on Tuesday, gaining around 0.3% as the US Dollar (USD) weakens following softer United States (US) consumer-confidence data. The US Dollar Index falls toward 101.30, helping the Euro extend its recovery.
The Conference Board Consumer Confidence Index declined to 90.8 in July from an upwardly revised 92.2 in June. The Present Situation Index fell for a third consecutive month to 114.9, while the Expectations Index remained unchanged at 74.7 and stayed below the level generally associated with recession concerns. The figures suggest that US households remain cautious about current business and labor-market conditions.
Germany’s Bundesbank added that the economy likely expanded slightly in the second quarter despite headwinds from the Middle East conflict and elevated energy prices. The central bank highlighted resilient industrial activity, stronger foreign demand and growing exports, while consumer spending probably remained at least stable. However, it warned that growth could lose some momentum in the third quarter as temporary supportive factors fade, while higher energy costs could lift inflation again.
Short-term technical analysis:
On the 4-hour chart, EUR/USD trades at 1.1399. The pair hovers around a key pivot at 1.1399 after reclaiming the short-term floor, with the 20-period Simple Moving Average (SMA) at 1.1380 now lending nearby support. Price, however, still trades beneath the 100-period SMA at 1.1416, which keeps the broader topside constrained even as the Relative Strength Index (RSI) near 54 hints at mildly improving momentum rather than outright bullish conditions.
On the downside, immediate support is seen at the 1.1399 pivot, followed by a confluence of the 20-period SMA and horizontal support around 1.1380, ahead of additional floors at 1.1374 and 1.1361. On the topside, initial resistance is defined by the 1.1399 pivot on any intraday pullback failure, with the 100-period SMA at 1.1416 acting as the next meaningful cap that bulls would need to clear to extend the recovery.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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