Next week, key events will include US President Trump’s trade deadlines and various monetary policy meetings. We will see rate decisions from the RBA, RBNZ, and BoK, along with important economic data such as UK GDP and the Canadian Jobs Report. OPEC+ is planning to approve a 411k bpd output increase for August. This shift focuses on market share, but compliance levels among members vary. There is a possible risk of oversupply in the second half of the year, especially with US shale production reaching new highs. Swedish CPIF inflation has decreased, prompting a rate cut from the Riksbank. June’s inflation data may affect future policy, although another cut in 2025 is not certain. The RBA is expected to lower rates to 3.60%, as inflation slows and unemployment forecasts rise. The RBNZ might keep rates steady, but uncertainty is high. The US and EU are negotiating trade tariffs with a deadline of July 8th. Four possible outcomes range from a complete breakdown to a framework deal. The FOMC currently plans to keep interest rates steady, with potential cuts later in the year. China’s inflation data could continue to show negative trends. Weak Korean exports are impacting the BoK’s rate decisions, while Norwegian CPI adjustments are influencing Norges Bank predictions. The UK GDP is anticipated to show a slight recovery, while the Canadian Jobs Report could affect BoC easing expectations. The job market and trade relations remain under close watch. We are entering a phase where scheduled decisions and economic indicators will directly influence prices. Monetary committees in the Asia-Pacific region are finalizing their rate assessments, shifting focus to what comes next. The decisions made next week may not change overarching themes, but they will clarify the paths already forming. The Reserve Bank of Australia is expected to cut its policy rate again due to signs of weak wage growth and softening employment figures. With inflation falling, market participants are anticipating a cycle of monetary easing, which may create a divergence with more hawkish rate-setters elsewhere. In New Zealand, policymakers are taking a cautious approach. No immediate changes are expected, but every word of the forward guidance will be scrutinized. The same goes for the Korean central bank, as recent export data has weakened and confidence indicators are dropping. Manufacturing pressures are rising, influenced by hesitance in regional demand, leaving room for adjustments when inflation stabilizes. Norwegian consumer prices are drawing attention, leading to updated forecasts. Norges Bank may not play a significant role compared to larger economies, but any tone changes will be seen as a measure of credibility concerning guidance timelines. In Canada, employment statistics are set to be released, where volatility could be greater than anticipated. Any significant deviations in participation or wage growth could alter rate cut timelines. The implications of these figures for the Bank of Canada’s timeline must not be underestimated, especially as global peers hint at easing. Meanwhile, trade relations between the US and China remain tense. The known tariff negotiation deadline is less important than how both sides express their red lines. The four potential paths, ranging from a complete breakdown to a full framework deal, suggest a greater likelihood of delays rather than breakthroughs. From a political perspective, energy markets are adjusting to decisions made by oil-producing nations. The plan to boost oil output in August reflects a shift from coordination to competition. Although official quotas indicate restraint, actual shipments may differ, particularly as US shale continues to break records. The risk of oversupply remains present, adding pricing pressure in future contracts—a trend already seen in certain parts of the futures market. In Sweden, last week’s unexpected inflation adjustment triggered a quick rate cut, but whether this will become a trend remains uncertain. Next month’s inflation data will be crucial for rate path expectations into 2025. This change marked a departure from previous caution, allowing the krona to weaken with less resistance and impacting regional rate differentials for multi-currency portfolios. In the UK, modest gains in GDP are expected. After a slight contraction, even a small recovery offers political and policy relief. The market is keen not only on the overall figure but also on the underlying components. Consumer categories will face heightened scrutiny as discretionary spending patterns influence inflation forecasts. The Federal Reserve plans to keep rates steady for now, with mentions of a possible softening later in the year. Labour market indicators will guide timing, rather than inflation alone; job claims and wage data are likely to be more significant than CPI in shaping terminal rate views. In summary, we are preparing for a period when central bank divergence will become more apparent. The weeks ahead will demand portfolio flexibility rather than a singular direction. Options markets seem well-positioned for volatility, while short-dated strategies are favored over longer commitments. Managing risk now requires focusing on broader environmental shifts rather than solely tracking isolated data sets. Fiscal policies and trade decisions are closely intertwined with monetary credibility assessments. Rates, commodity prices, and rebalancing flows are starting to align—not towards uniformity, but towards greater visibility. This clarity is welcome.

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Silver prices remained steady, closing at $36.84 with low trading volumes as US markets were closed for a holiday. The ongoing US trade war created a cautious vibe in the market. Technically, silver is on an upward trend, forming a double-bottom pattern. However, a doji pattern indicates a temporary pause. Traders are keeping an eye on important resistance levels, with the highest price this year at $37.31.

Bullish Momentum Indicator

The Relative Strength Index (RSI) suggests a positive outlook, indicating the potential for price increases. Key resistance levels include $37.00 and $37.49, with a target of $38.00. If silver drops below $36.00, it could test $35.82 and possibly $35.00 before approaching the 50-day simple moving average (SMA) at $34.39. Silver is a favored asset because of its history as a store of value and a medium of exchange. Silver prices often react to geopolitical events, interest rate changes, and the strength of the US Dollar. Demand from industries like electronics and solar power also impacts prices. The Gold/Silver ratio serves as a measure of relative value and can indicate future price movements. With US markets closed, silver’s stable price around $36.84 was expected. Ongoing trade tensions between major economies caused participants to be cautious, leading to a “wait-and-see” approach. Thin liquidity likely added to this restraint instead of promoting active price discovery. From a technical view, the double-bottom pattern is significant. It usually indicates a potential rebound. However, the doji suggests some uncertainty and possible fatigue after the recent price increase. While the overall sentiment remains positive, expectations should be tempered. Resistance levels will play an essential role in the near-term direction. The $37.00 mark is the first hurdle and a psychological barrier supported by past price movements. The high at $37.31 and the level at $37.49 are also of interest as potential targets if momentum continues. Attention may also shift to $38.00, where selling interest could increase.

Vulnerable Momentum and External Shocks

The RSI still shows a positive outlook, comfortably positioned without signs of divergence or overbought conditions. As long as it remains stable, it suggests that dips in price might be short-lived. While momentum is present, it’s susceptible to external shocks or sudden increases in dollar strength. On the downside, there is a clear support level. Falling below $36.00 might lead to a test of $35.82—this is the first line of defense. If it drops further, $35.00 becomes critical both technically and psychologically. A sustained drop could bring the 50-day SMA into focus, currently around $34.39, indicating a wider unraveling of recent bullish trends. Beyond the technical aspects, silver reacts to broader forces. Global tensions can affect not just market sentiment but also actual demand, especially in sectors like electronics and solar manufacturing. Over time, a strong correlation between industrial demand and forward silver contracts has been observed. Changes in trade policies can quickly impact these demand chains. In the macroeconomic sphere, expectations around interest rates and currency values contribute to daily price fluctuations. The US dollar often acts as a counterbalancing force—its strength tends to limit silver price increases, while its weakness supports gains. This relationship has been consistent over many years, especially during changes in monetary policy. It’s also important to consider relative valuation. The Gold/Silver ratio, a tool used by cross-asset strategists, provides valuable insight. An increase in this ratio may indicate gold is outperforming or silver is undervalued. Conversely, a falling ratio often coincides with silver price rallies, especially when risk appetite improves. Monitoring this ratio alongside absolute price levels adds another layer of understanding. In the upcoming days, low trading volumes and a lack of major economic data may heighten the impact of news-driven shifts. Technical levels are established, but they could be disrupted by external factors. Price adjustments could be quick if large funds change their positions, particularly those that are responsive to momentum and dollar changes. Create your live VT Markets account and start trading now.

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EUR/USD saw a slight increase of 0.18% on Friday, even with low trading volumes due to the US Independence Day holiday. As the week ends, the currency pair stands at 1.1778, marking a 0.53% rise, supported by strong US economic data. Attention turned to tariff issues when US President Donald Trump revealed new tariffs ranging from 10% to 70%, starting August 1. Tensions between Europe and the US grew as Washington imposed a 17% tariff on European food imports.

Trade Agreement Efforts

Efforts to form a trade agreement between EU car manufacturers and the US are underway. This agreement seeks tariff reductions in exchange for increased US investments. The EU is considering a uniform 10% tariff on pharmaceuticals, alcohol, and other sectors. In May, German factory orders dropped by 1.4% month-on-month, unlike the 1.6% rise seen in April. However, there was a slight year-over-year improvement, with the decline softening from 5.8% to 5.3%. Looking ahead, the EU is set to release important data next week, including German Industrial Production, the Eurogroup meeting, ECB speakers, and Retail Sales figures. The technical outlook for EUR/USD indicates potential gains, testing resistance at 1.1800. Should a decline occur, support is around 1.1750. Despite the small rise in EUR/USD amidst light trading—due to the US holiday—the market reaction was calm as the weekend approached. The pair moved up just under 0.2% on Friday, bringing the week’s gain to just over 0.5%. This increase is notable, especially given it followed stronger-than-expected US data, which generally boosts the dollar.

Market Reactions and Trade Policy

Trade policy shifted unexpectedly with new tariffs confirmed, ranging from 10% to 70%, set to start in August. While not directly affecting EUR/USD yet, this announcement led traders to rethink their expectations, considering possible reductions in transatlantic trade and slower cross-border corporate investments. Additionally, the 17% tariff on European food imports puts more pressure on European exporters, especially in the agricultural sector, which had just begun to recover from past disruptions due to global supply chain issues. Discussions between EU carmakers and US officials continue, focusing on tariff cuts in return for increased US investment in European factories. Brussels has proposed a uniform 10% tariff, especially for pharmaceuticals and alcohol, as part of a strategy to avoid varying tariffs across different sectors. Traders assessing the potential impact of this deal should view it in the larger context of adjusting trade relationships. If successful, the euro could gain support from updated medium-term trade volume forecasts. From an economic data viewpoint, the decline in German factory orders deserves attention. A 1.4% contraction in May follows a positive April with a 1.6% increase. Year-over-year, the decline eased slightly to 5.3% from 5.8%. This may slow momentum, but it does not overshadow the recovery trend since early Q1. Market reactions to upcoming data could become more pronounced, especially as discussions on fiscal rules in the Eurozone intensify in the second half of the year. Next week’s schedule is busy. German Industrial Production figures are expected early, but outcomes may be lackluster based on recent manufacturer order trends. The Eurogroup meeting will draw attention for potential policy coordination regarding inflation targeting. ECB speakers will also provide insights or raise uncertainties around the latest wage growth figures. Retail Sales figures, while possibly quiet, could serve as a decisive factor if results significantly deviate from expectations. From a technical standpoint, EUR/USD is attempting to rise above 1.1800, a level last reached in late spring. If this upward momentum is backed by supportive data or clear ECB guidance, it could break through this barrier, attracting interest from momentum traders and mechanical rebalancing flows. On the downside, a support level exists around 1.1750, which has held during minor sell-offs in previous sessions. If sentiment shifts and risk appetite diminishes, this level might be tested again. For now, the trajectory seems moderately positive, heavily influenced by external news rather than domestic economic strength. Create your live VT Markets account and start trading now.

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The Australian Dollar has fallen against the US Dollar as concerns grow ahead of President Trump’s tariff deadline on July 9. Trading activity was low due to US markets being closed for Independence Day, causing AUD/USD to lose 0.30%, trading just above 0.6550. Recent Australian trade data revealed a 2.7% drop in exports for May, which reduced the trade surplus. Many economists expect the Reserve Bank of Australia (RBA) to lower interest rates, with a 25-basis-point cut likely soon, bringing the cash rate down to 3.60%.

Federal Reserve and US Dollar Strength

The Federal Reserve’s stable interest rates keep the US Dollar strong within the 4.25% to 4.50% range. AUD/USD is stuck in a rising wedge pattern, indicating potential exhaustion as it struggles to break the 0.6590 barrier. If AUD/USD breaks above 0.6600, it could rise towards 0.6722. However, if it fails, it might drop to initial support around 0.6550. In a risk-averse market, currencies like the US Dollar, Japanese Yen, and Swiss Franc typically gain strength as investors seek safe havens. With subdued trade figures and growing worries about global tariffs, it is expected that the Australian Dollar will face more pressure. The 2.7% drop in exports has narrowed the trade surplus, shaking confidence in Australia’s external position and increasing the need for the RBA to adopt looser monetary policy. With ongoing trade struggles, another 25-basis-point rate cut is now largely anticipated by the market. Governor Lowe’s RBA, having already adopted a dovish stance, is increasingly likely to lower rates to 3.60% in response to weak economic signals. This aligns with the trend of declining domestic data and a global shift towards caution. Thus, the next cash rate decision seems more about *when* than *if*.

Contrasting Central Bank Policies

In contrast, the US Federal Reserve, led by Powell, maintains a firm grip on interest rates between 4.25% and 4.50%, boosting the US Dollar’s appeal. Unlike Australia’s situation, the Fed is signaling stability, which is helping to support the Dollar as markets adopt a cautious outlook. Adding to this are heightened geopolitical risks and upcoming tariff discussions, driving demand for safe-haven currencies like the Japanese Yen and the Swiss Franc. In terms of AUD/USD, it remains within a rising wedge pattern, suggesting possible weakness or loss of momentum after a prolonged increase. Attempts to break above 0.6590 have so far failed, indicating seller exhaustion. However, if it can clearly break and hold above 0.6600, we could see a rise to 0.6722, where more selling pressure may appear. Conversely, if it dips below 0.6550, it could invite further downward movement. The AUD has historically reacted strongly to trade sentiment shifts. With lower trading volumes during the US Independence Day holiday, price fluctuations may have intensified. However, thin trading conditions can lead to volatility rather than calm, especially with tariff talks heating up before the July 9 deadline. The timing of the upcoming RBA decision and any announcements from US officials will be crucial. Until then, markets might experience nervousness, with price movements heavily influenced by macroeconomic news and geopolitical situations. This highlights the significance of monitoring technical signals, which could quickly alter market balance as sentiment changes. Given the typical outcomes of rising wedge formations, keeping an eye on price movements near resistance and support levels is advisable. Watch the volume closely once US traders return, and stay alert for any news that might cause significant price changes. Create your live VT Markets account and start trading now.

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The US Dollar (USD) has softened during low-volume trading periods, losing ground after a better-than-expected US Nonfarm Payrolls report. The US Dollar Index (DXY) is steady, staying around 97.00 after touching a high of 97.42. Market players are balancing the strong job data against risks from US President Trump’s tariffs and financial concerns. The House recently approved a significant tax-and-spending bill that is likely to increase the budget deficit and impact the long-term stability of US finances.

The Tax And Spending Bill

This bill makes the 2017 tax cuts permanent, offers new tax breaks, and raises the debt ceiling by $5 trillion, adding an estimated $3.4 trillion to deficits over ten years. Partisan disagreements over the bill add uncertainty to the market. China and the US have tentatively agreed to lower tariffs on some products, while India has responded to US auto tariffs, which could disrupt global supply chains. The strong Nonfarm Payrolls data has led to lower expectations for a Federal Reserve rate cut in July. Technically, the US Dollar Index is bearish, as it has struggled to regain the 97.00 level, indicating weak momentum. Support and resistance levels are approximately 96.30 and 97.20, respectively. With the recent decline of the US Dollar, following a short spike from the positive Nonfarm Payrolls data, many are reevaluating their short-term strategies. Although Friday’s job report changed expectations for July’s Federal Reserve meeting, the Dollar’s upward momentum quickly faded. As trading volumes decline during the summer, positioning focuses more on timing than strong convictions.

Market Response And Strategy

The House’s approval of the new tax-and-spending bill introduces a new element to the market. This legislation makes key aspects of the 2017 tax cuts permanent and raises the debt ceiling by $5 trillion, which raises concerns about fiscal discipline over the long term. From a risk perspective, any assets linked to US yields may respond to these changes—this could happen gradually. Budget deficits are projected to grow by $3.4 trillion over the next decade, which may reduce confidence in Treasury issuance and dollar demand. While default risk isn’t an immediate concern, we could see slight shifts in spreads, especially for longer-term rates. In quieter trading conditions, temporary market disruptions may occur, creating opportunities for strategic entries or exits. On the global front, progress seems to be made between Washington and Beijing, though slowly, in reducing trade tensions. Recent compromises indicate both sides are trying to avoid further protectionist measures. However, retaliatory actions from countries like India complicate global trade forecasts. Companies involved in exports and imports, especially in the automotive sector, may need to adjust their strategies if volatility returns to commodity currencies or emerging market exchange rates. Technically, despite a brief rise, the Dollar Index has stalled near previous resistance points. Failing to break through 97.00 indicates a lack of strong upward momentum. Falling below this level could prompt a broader reassessment of market trends. Support at 96.30 is crucial—not as a turning point but because breaking it would signal a shift in trend analysis. Resistance remains at 97.20, which has repeatedly limited gains over the last two weeks. We are watching option flows for changes in rate hike expectations. Speculators who once anticipated two rate cuts this year appear to be adjusting their view. With the Federal Reserve emphasizing data dependency, interest rate derivatives now show narrower price ranges. As a result, short-term contracts may see more significant adjustments following even minor data surprises. Given the current low volatility, spreads may widen quickly if trading volumes rise. This highlights the importance of careful entry planning, especially if technical signals contradict overall market sentiment. Concerns about US fiscal policies and evolving global trade dynamics could lead to increased market volatility in the coming weeks. Until clearer signals emerge—especially from upcoming inflation data or a change in the Federal Reserve’s stance—we will remain flexible in our trading strategies and avoid speculative positions. Create your live VT Markets account and start trading now.

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The USD/JPY pair is trading around 144.50, facing low liquidity due to the US Independence Day holiday. The current weekly candle indicates uncertainty, suggesting a possible price breakout. On the daily chart, USD/JPY is within a symmetrical triangle, showing a pattern of higher lows and lower highs since April. The immediate resistance is at the 50-day EMA near 144.90, and support is at 143.50, close to the triangle’s base.

Potential Breakout Scenarios

If the price breaks above resistance, the pair could rise toward 146.50–147.00. Conversely, if it drops below support, it may fall to 142.50 or even the April low of 139.89. The RSI is around 49, indicating a balanced market, but bullish momentum appears weaker. The MACD shows a flat trend, with signal lines suggesting a lack of clear direction. Traders are being cautious, waiting for clearer signals before entering new trades. The Japanese Yen’s value is affected by various factors, including economic conditions, the Bank of Japan’s (BOJ) policies, bond yield differences, and global risk sentiment. The Yen tends to strengthen during market turmoil as it is viewed as a safe-haven currency. Recent BOJ policies are providing some support to the Yen. With the pair consolidating near 144.50 and little movement expected during the US holiday, traders are likely holding off on making significant moves until clearer trends appear. Liquidity is lower than usual, contributing to restrained price action. However, as the price approaches the triangle’s apex, a breakout seems imminent. The tightening range over several weeks usually leads to increased volatility once it resolves. The daily pattern of higher lows since April and lower highs heading toward the 144–145 range has been consistent. Resistance around 144.90 limits progress. However, if the price closes above this barrier, the market may gain confidence and could move toward the 146.50 area, where past price action may create obstacles. We would expect to see increased volume and momentum if a breakout occurs.

Technical Indicators and Macroeconomic Factors

If the price drops below 143.50, particularly with a strong candle close, it would increase the chances of falling to 142.50 first. This level has previously offered support and may pull the price down further, especially if momentum accompanies the decline. A drop to the April low of 139.89 becomes more likely, though a continuation would depend on overall market sentiment. The RSI, just under 50, shows the market’s indecisiveness—it’s neutral territory. There is no strong momentum direction, but slight bullish pressure is fading, which needs close monitoring. If the RSI dips below 45 in the coming sessions while the price remains within the triangle, it would signal a shift toward selling pressure. The MACD has been stable, indicating low trading conviction. With the signal lines tightly compressed, even short-term traders are not taking strong positions just yet. Consequently, volume is lower than average, and the order books are thinned out. Additionally, macroeconomic factors are also being monitored. The Yen is receiving some support from recent changes in central bank policy. While these changes are not interventionist, they signal a gradual change in tone. The appeal of the carry trade has slightly diminished. This, combined with broader risk sentiment shifts, could make the Yen more appealing during global uncertainties—something risk managers will watch closely as new data emerges or external shocks occur. Yield spreads between US and Japanese bonds still favor the Dollar, but there has been a slight narrowing. Any further decrease could put more pressure on this pair, especially if it aligns with a technical rejection from resistance. Moving forward, we will closely observe price behavior around both triangle boundaries. Watching for increased volume and candle bodies extending beyond recent ranges will be crucial indicators. Until one side clearly prevails, it’s wise to maintain a defensive position, focusing on strictly defined stops and being ready to act quickly once a breakout confirmation arrives. Create your live VT Markets account and start trading now.

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The New Zealand Dollar (NZD) is losing value against the US Dollar (USD), currently around 0.6050. After reaching higher levels, it struggled to stay near the 0.6120 resistance mark. The 4-hour chart for NZD/USD reveals a symmetrical triangle pattern, indicating uncertainty in the market. This often signals an upcoming breakout, especially now that it’s below the 78.6% Fibonacci retracement level, which coincides with the 0.6070 resistance.

Market Analysis

The 100-period Simple Moving Average (SMA) supports the NZD at 0.6038. Meanwhile, the daily chart shows a rising wedge pattern, suggesting a possible bearish reversal close to significant resistance. The Relative Strength Index (RSI) is at 54, indicating mild bullish momentum. The NZD’s value is influenced by economic health and central bank policies. China’s economic activity affects the NZD, given their trading relationship. Additionally, dairy prices, a key export, play a role in its value. The Reserve Bank of New Zealand targets a specific inflation rate and adjusts interest rates, which impacts the strength of the NZD. Economic data is also crucial for assessing New Zealand’s situation. Broader market sentiment influences the NZD, with it strengthening in positive conditions and weakening during uncertain times. Recent price actions suggest that traders should pay attention to developments in the next few trading sessions. The NZD/USD pair’s pullback to around 0.6050 after reaching 0.6120 shows that buyers have struggled to maintain momentum above that area. This resistance has proven to be strong. The current decline hints at sellers gaining traction near recent highs.

Technical Patterns and Indicators

The symmetrical triangle on the 4-hour chart demonstrates that the market is currently in a period of indecision. Neither buyers nor sellers have fully committed to any significant moves. However, such patterns don’t last long. Eventually, one side will take control. As the pattern forms below the 78.6% Fibonacci level, anticipation of a decisive move grows. When the price reaches the tip of the triangle, the prolonged compression often results in increased volatility, with target levels depending on the breakout direction. The 100-period simple moving average remains a strong support at 0.6038. If prices retreat to that level, they might stabilize temporarily, but relying solely on this without confirmation can be risky. The rising wedge on the daily chart indicates caution, as this pattern often leads to price declines when near upper resistance, especially if momentum weakens. The RSI at 54 shows a slight advantage towards strength but is not extreme. Wheeler’s target inflation zone guides monetary policy, impacting interest rate decisions. These decisions are crucial to currency valuation, particularly for the Kiwi, which reacts sharply to changes in interest rate expectations. Recent monetary statements focus on controlling inflation without heavily impacting GDP growth. However, maintaining rates will depend on upcoming economic data, especially employment and wage growth. Changes in Chinese demand also play a significant role in this pair’s behavior. New Zealand’s exports, especially dairy, heavily depend on China. Any decline in China’s recovery or global trade could influence demand and, consequently, the NZD. Recent price movements reflect this, as weak international demand for soft commodities has quickly affected the NZD through lower spot and future prices. Market sentiment adds another component. The Kiwi often acts as a proxy for risk, rising when traders seek returns in higher-yielding assets. Recently, these correlations have remained strong. Poor performance in equity markets or rising US bond yields adds pressure on the NZD. As this pair tests support around 0.6038 again, strategies involving tight risk-to-reward ratios near confirmed breakout zones may encourage decisive trading. However, caution is needed when prices linger near overlapping technical signals, such as wedge support and significant moving averages. Observing price behavior in this area will reveal market sentiment. For more detailed analysis, Andrews’ pitchfork models and Bollinger Band compressions can be utilized, but attention should be paid to volatility expansion after a breakout. If a clear break above or below the triangle occurs, expect significant stops and momentum orders to be triggered on shorter timeframes. Create your live VT Markets account and start trading now.

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OPEC+ plans to increase oil production by 548,000 barrels per day in August, exceeding earlier expectations. Previously, they aimed for monthly increases of 411,000 barrels per day for May, June, and July. This decision comes as the global economy remains stable, with healthy market fundamentals marked by low oil inventories. Media sources report that OPEC+ will review the 548,000-barrel increase for September during its upcoming meeting on August 3. This rise in output signals a shift from years of controlled supply. OPEC+ seems to be focusing more on capturing market share, responding to US shale drillers reclaiming some of their lost volumes. Earlier this year, OPEC+ announced a cut of 2.2 million barrels per day. The recent 411,000 barrel increases are part of reversing these cuts, while the new 548,000 boost speeds up the process. Even with this increase, OPEC+ has 1.66 million barrels per day of extra capacity. However, actual production might not hit these targets. This announcement shows a clear intent to reduce restrictions faster than expected. Instead of following the cautious approach outlined earlier, OPEC+ is now more confident, driven by stronger demand and low inventory levels at major storage locations. These conditions have made it difficult for prices to remain stable recently, leading supply efforts to align with consumption trends. The upcoming reassessment of the increase introduces a conditional element. It doesn’t indicate uncertainty, but shows an understanding that short-term adjustments may be needed. OPEC+ is prioritizing flexibility over a fixed plan. Challenges may arise if demand does not keep pace or if price fluctuations provoke political issues in smaller producer countries. Additionally, OPEC+’s shift from strict volume management aims to keep up with non-OPEC producers. Riyadh’s recent actions are a response to increased drilling outside of OPEC. The large but unused spare capacity highlights that OPEC+ isn’t completely giving up their buffer, keeping it as a safety net. Traders shouldn’t assume these production increases will smoothly reach terminals. Past behavior shows that actual deliveries can slow down, especially in places where infrastructure is lacking or production targets exceed technical limits. Supply delays often occur during changes like this, usually unnoticed until they affect physical markets. With the forward curve showing comfort now and some tightening expected later, we believe the prompt market will respond more to actual supply decreases than to proposed increases. This trend has been consistent for over a year and continues to influence options strategies. Additionally, daily volatility is low, which can be misleading; even slight changes to promised flows could lead to a spike in volatility. Given this context, fixed strike sell volumes further into the future will likely be tied to news risk, especially with the group’s next update on the horizon. However, we expect adjustments in the short term as the physical supply becomes clearer. For any sustained changes to occur, spot barrels must begin to follow the trend. Until then, daily price movements will likely be volatile with a focus on inventory data. Short-term indicators may overreact at the start of trading sessions, so it’s crucial to assess entry points carefully. Watch for strong physical indicators, especially exports and activity at key hubs, before taking broader positions. Inter-month spreads may provide cleaner opportunities if production partially materializes.

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Gold prices are on the rise again, expected to increase by over 1.50% this week. This movement is mainly due to a weaker US dollar and low trading activity following the US Independence Day holiday. Trade tensions have also contributed to the increase, with XAU/USD trading at $3,333, reflecting a rise of 0.26%. Starting in August, a range of tariffs from 10% to 70% will be enforced as the US plans to send trade letters to various countries. This could affect gold prices, with around 100 nations facing at least 10% tariffs. The Federal Reserve’s decision to keep rates steady has somewhat slowed gold’s growth.

US Labor Data and Global Affairs

US labor data is looking solid, with government hiring boosting numbers, although private sector growth is slowing to its lowest point in eight months. Geopolitical tensions persist, with no progress in US-Russia talks regarding Ukraine, even as the US has offered air defense support to Ukraine. Next week will feature important economic reports, including FOMC minutes and jobless claims. High US Treasury yields, with the 10-year yield ending at 4.338%, have also limited gains for gold. A potential tax bill extension could increase the national deficit by $3.4 trillion. Recent data showed that nonfarm payrolls were higher than expected and the unemployment rate dipped slightly. A strong labor market, indicated by decreasing initial jobless claims, raises hopes for possible monetary easing in the future. Gold prices are trending upwards but still below the recent peak of $3,452. For further increases, gold needs to break above $3,400. Conversely, a fall below $3,300 could lead to a target of $3,246 or lower. Gold is viewed as a safe haven amid economic uncertainty, with its prices linked inversely to the US Dollar and Treasury yields. Gold regained its upward momentum this week, largely due to the weaker US dollar. The trading volume is thin after the July 4 holiday, which can exaggerate price movements triggered by external factors. Rising tensions over potential tariffs and complicated trade discussions helped boost gold prices. The main driver behind this shift is the proposed tariff system from Washington. Tariffs of 10% to 70% are expected to take effect by August, impacting about 100 countries and potentially causing economic challenges. While these tariffs may hinder traditional markets, they could provide support for gold in the short term. The Federal Reserve’s policies are holding back bullish sentiment in metals, as they have not made significant moves to cut rates. Although some improvements in labor segments are noted, slow wage growth and private sector hiring declines are concerning. The public sector is compensating, but this does not provide a complete picture of job market health. Tensions with Russia remain unresolved. Although there are no diplomatic breakthroughs, the US continues to support Ukraine with military assistance. In times of conflict, safe-haven assets like gold typically gain support, which aligns with the recent rise in gold prices.

Upcoming Economic Releases and Market Indicators

Next week brings several critical economic events. The FOMC minutes will reveal discussions behind recent policies, while weekly jobless claims could either boost confidence in the labor market or spark debates over short-term rate direction. Currently, the 10-year yield is just above 4.3%, limiting excitement for further gold gains due to its inverse relationship with gold prices. A discussion is also ongoing about fiscal policy, particularly an extension of tax cuts, which could inflate national deficits significantly. This wider economic picture often links to metal pricing. Traders should keep in mind that public debt trends and inflation expectations can affect hedging into precious metals. Recent job growth is promising, with nonfarm payrolls surpassing expectations and a surprise decrease in unemployment. However, shorter-term metrics like initial jobless claims, which have been gradually dropping, can shift market sentiment before broader trends emerge. Gold remains in a rising trend but is currently pressured below its recent high. It needs to clearly break through $3,400 to target new highs. This level isn’t just psychological; it’s also a significant resistance area from the previous rally. A drop below $3,300 could lead to previous support levels coming into focus, with $3,246 being the first significant test. Gold prices are still heavily influenced by the strength of the dollar and Treasury yields. As yields rise, gold prices have paused. Renewed interest in Treasuries could limit gold’s upside, while a weaker dollar would have the opposite effect. For now, we await whether trading volume picks up after the holiday and if any major report or political event leads to clearer direction for the market. Create your live VT Markets account and start trading now.

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GBP/JPY is experiencing a decline as demand for safe-haven assets rises due to the July 9 tariff deadline set by President Trump. The British Pound is facing pressure from political issues within the Labour Party, which is limiting its gains. Currently, GBP/JPY trades below the 10-day Simple Moving Average of 197.61. It’s facing resistance while finding support at the key level of 197.00. If it drops below this support, it might continue to correct towards the important Fibonacci level at 195.41.

UK Political Scene and Yen Influence

The UK’s political situation is troubled by internal conflicts over budget strategies, putting pressure on the Pound. In contrast, the Yen is mainly affected by the Bank of Japan’s loose monetary policy, alongside ongoing US trade tensions, complicating matters further. The GBP/JPY pair remains above its 200-day SMA, with long-term support at 193.55. However, resistance around 198.00 makes it hard for prices to rise. The Relative Strength Index shows neutral momentum, suggesting the potential for both upward and downward moves. Market sentiment impacts currency trends, with “risk-off” moments favoring safe-haven currencies like the Yen, Swiss Franc, and US Dollar. Investors usually shift to these assets seeking stability during economic uncertainty. At this moment, the GBP/JPY pair is caught between weak domestic sentiment and global uncertainty. The recent dip below the 10-day moving average while struggling to stay above 197.00 signals a warning for the near term. When a pair trades below a short-term moving average and approaches a key psychological level, it often indicates a lack of confidence in the currency, at least for now. If the 197.00 level breaks, we could see a sharper drop towards 195.41, aligning with a previously tested Fibonacci level. Buyers might step in there, but if current pressures continue, demand may stay weak. The broader political situation in Britain isn’t helping. Budget conflicts usually have effects, especially when they reveal deeper party divisions. For markets, budget concerns reflect a lack of clear direction. Without agreement, currency traders often pull back, waiting for a clearer path.

Japan and Safe Haven Dynamics

In Japan, despite a loose monetary policy keeping bond yields low, the Yen remains closely tied to market sentiment. As uncertainty grows, money tends to flow into safer assets. Right now, the Yen benefits from the upcoming July 9 tariff deadline. Even the mere threat of tariffs can sway market sentiment, affecting risk appetite. This often leads to shifts into currencies seen as safer. From a technical standpoint, the long-term 200-day moving average is intact below current prices, resting above 193.55. This level has acted as support in the past, but relying on it can be risky. When sentiment changes—especially due to politics or global economic pressures—prices can swiftly break through perceived support levels due to volatility. The Relative Strength Index remains in the middle range, indicating neither an overbought nor an oversold market. This suggests that while prices are currently stable, they haven’t yet committed to a direction. Sideways price action can be frustrating, especially amid political disunity and policy differences. When safe-haven buying increases—whether from trade tensions or general caution—the impact is quick. Currencies like the Yen, Dollar, or Franc tend to rise as investment moves away from riskier assets. This is particularly important in pairs with more volatile currencies. Timing becomes crucial, especially around major news events, as such environments do not reward complacency. In terms of price levels, resistance near 198.00 is strong. If prices can close decisively above that mark, momentum traders may reconsider and enter long positions. Until then, traders should focus on current conditions rather than relying on historical trends. Market participants should remain adaptable, rather than predictive, in the upcoming sessions. Opportunities will likely arise from intraday moves, especially around key trade policy or budget announcements. By monitoring clear levels—such as 197.00 below and 198.00 above—traders can better manage risk during potentially volatile weeks ahead. Create your live VT Markets account and start trading now.

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