US Dollar

The US Dollar Index climbed to a near two-week high of 99.14 on Tuesday after the United States reached a tariff agreement with the European Union, easing fears of a broader trade war. This rally extended the rebound from last week’s low of 97.11, with 99.42, the June 23 high, once again emerging as a key short-term resistance level. Recent trade agreements with Japan and the resumption of negotiations with China have also supported the dollar, as the perceived risk of trade disruptions continues to decline. The upcoming earnings reports from Apple, Microsoft, Amazon, and Meta could further strengthen the dollar if strong results attract capital back to US assets. Meanwhile, markets remain cautious about potential political risks related to the Federal Reserve following reports that President Trump nearly attempted to dismiss Fed Chair Jerome Powell last week.

From a technical perspective, the Dollar Index is trading slightly above the 50-day simple moving average at 98.30. The 14-day Relative Strength Index (RSI) has shifted to bullish over the past week, currently standing at 57.50. Sustained movement above this level could pave the way for a retest of 98.93, the July 17 high, and 98.97, the upper Bollinger Band, with the next target at 99.42, the June 23 high. Support remains solid at the 50-day simple moving average of 98.30. With trade tensions easing and investors refocusing on corporate earnings and Federal Reserve policy, short-term momentum appears to be leaning downward. A decisive break below the psychological level of 98.00 would confirm a continuation of the bearish trend.

WTI Spot Crude Oil

On Tuesday, WTI crude oil futures rose 3.7% to settle at $68.90 per barrel, marking a five-week high and extending Monday’s 2.4% gain. The rally was driven by easing trade tensions and heightened geopolitical risks that fueled concerns about supply. The US-EU trade agreement boosted market optimism, helping to avert a broader conflict and improving the outlook for global fuel demand. The deal also included a commitment from the EU to purchase $750 billion worth of US energy, although analysts remain skeptical about whether this target can be achieved. Additionally, President Trump increased pressure on Russia by imposing a shorter timeline for progress in ending the Ukraine war and threatening new sanctions, which further supported oil prices. On the macroeconomic front, stronger-than-expected US consumer confidence reinforced demand optimism. Investors are also closely watching this week’s Federal Reserve policy meeting, where rates are expected to remain unchanged, though a dovish shift could be possible if signs of cooling inflation persist.

Overall, oil prices are likely to trade within the $66 to $70 range, with attention focused on the outcome of this week’s OPEC+ meeting. From a technical perspective, prices rebounded from last week’s support level near $64.70 and are now approaching the key resistance zone between $69.00, a psychological level, and $69.58, the 280-day moving average. The MACD indicator has formed an initial bullish crossover below the zero line, suggesting improving short-term buying momentum. The RSI has also moved back above 50, indicating gradually improving market sentiment. However, the downtrend line remains intact, and if prices fail to break through the $69.00 to $69.60 range, the rebound could stall. A drop below the 200-day moving average at $67.72 would put pressure on Tuesday’s low of $66.23 and the $66.00 psychological level. On the upside, resistance is seen at $69.00 to $69.58, followed by $70.00, a key psychological level, and $70.20, the 300-day moving average.

Spot Gold

Spot gold traded near $3,325 per ounce in early Tuesday trading after falling to a nearly three-week low on Monday. The US-EU trade agreement boosted the US dollar and risk appetite, while investors awaited fresh clues on interest rate policy from this week’s Federal Reserve meeting. The more trade-related announcements emerged, the stronger the dollar became, reducing gold’s appeal and sparking selling pressure in a risk-on environment. However, despite its recent weakness, gold has not collapsed. Its inability to set new highs in recent months signals weakening momentum, but it also suggests that a sharp sell-off is unlikely. Inflationary pressures, particularly those stemming from Trump’s tariff policies and expansionary fiscal agenda, continue to offer potential support. This backdrop creates a nuanced outlook for gold: while upside potential appears capped for now, downside risks also seem limited.

From a technical standpoint, gold’s long-term structure remains constructive, but market confidence is starting to waver. Gold is once again hovering just above the key $3,300 psychological level. A decisive break below this support could mark the start of a more volatile phase and significantly alter the short-term outlook. For now, support at $3,300 remains intact. Below that level, $3,283.30, the 92-day moving average, and $3,282.50, the lower Bollinger Band, become critical markers, with the next downside target at the June low of $3,247. On the upside, resistance lies at $3,339, the 25-day moving average, and $3,342, the 50% Fibonacci retracement level of the $3,246 to $3,438 rally. Bulls need to clear these levels to reclaim the $3,400 threshold.

AUD/USD

After three consecutive sessions of losses, AUD/USD edged higher in the Asian session on Tuesday, trading around 0.65215. The pair continues to face headwinds as the US dollar strengthens following a trade agreement between the United States and the European Union. The two sides reached a framework deal on Sunday that imposes a 15% tariff on most European goods, set to take effect on August 1. According to Bloomberg, the agreement ends months of deadlock. Traders are also closely watching progress in US-China trade talks. After more than five hours of negotiations between senior economic officials from both countries in Stockholm on Monday, discussions are scheduled to resume on Tuesday. The aim is to resolve ongoing disputes and extend the trade truce for another three months. Meanwhile, the Federal Reserve is widely expected to keep its benchmark interest rate unchanged at 4.25% to 4.50% in its July meeting, with the FOMC press conference likely to be scrutinized for any signs of a potential rate cut in September. The Reserve Bank of Australia is expected to closely monitor June labor market data and second-quarter inflation before considering a possible rate cut. Both monthly and quarterly CPI reports are due later this week.

On the daily chart, AUD/USD rejected wedge resistance at 0.6625, forming a long upper shadow before pulling back below the 0.6600 psychological level. The 14-day Relative Strength Index (RSI) has turned lower, currently near 49, indicating weakening momentum while remaining neutral. The pair is now testing key support at Monday’s low of 0.6515 and the 0.6500 psychological level. A further decline could target the July low of 0.6454 and then 0.6400. A break below 0.6400 would signal a bearish reversal. On the upside, immediate resistance lies at 0.6545, the 20-day moving average, followed by 0.6586, Monday’s high, with the 0.6600 psychological level remaining an important longer-term focus.

GBP/USD

GBP/USD extended its decline at the start of the new trading week, falling for a third consecutive session and slipping back below the 1.3400 level to reach a ten-week low. The US dollar has staged a broad rebound after months of weakness, pushing the pound below a key ascending trendline. On the UK side, there are no major economic data releases on the calendar, leaving GBP traders to focus on developments in the US. The June Core PCE Price Index, a key inflation measure, will be released on Thursday. Due to the Trump administration’s trade and tariff policies, overall inflation data for the second quarter has been volatile. The June PCE index is expected to rise again, from 0.2% previously to 0.3%.

From a technical perspective, the pound’s weakness has once again become the main theme this week as downside momentum accelerates. GBP/USD failed to sustain its bullish push above 1.3800 earlier this month, retreating into bearish territory and dropping below 1.3500 and its key moving averages to a near two-month low at 1.3345. The pair has broken below its solid bullish trendline and is now heading toward 1.3313, the lower Bollinger Band, and the 1.3300 psychological level. A break below this zone could open the way toward 1.3255, the 115-day simple moving average. On the other hand, if GBP/USD climbs back above 1.3400, it could test resistance at 1.3452, this week’s high, followed by the 1.3500 psychological level.

USD/JPY

USD/JPY extended its gains for a fourth consecutive session on Tuesday, climbing to around 148.70 in the Asian session, its highest level in a week and a half. However, traders are holding back from making fresh bullish bets ahead of key central bank events this week, choosing instead to remain cautious. The Federal Reserve is scheduled to conclude its two-day meeting on Wednesday, followed by the Bank of Japan’s policy update on Thursday. Investors will be watching closely for signals on monetary policy outlooks, which will be critical in determining the next directional move for USD/JPY. Meanwhile, recent positive trade developments have reduced demand for traditional safe-haven assets such as the yen. Additionally, cooling inflation in Japan and domestic political uncertainty have lowered the likelihood of an immediate rate hike by the Bank of Japan, further weighing on the yen and lending support to USD/JPY. On the other hand, the dollar is looking to build on its strong rebound from the previous session as markets increasingly accept that the Fed will hold rates steady this week, adding another layer of support for the pair.

On the four-hour chart, the Bollinger Bands are widening, indicating increasing volatility. USD/JPY has rebounded from the 145.85 area, climbing above the midline at 147.55 and breaking through the 147.50 resistance zone, which has now turned into short-term support. The next level of support is seen at the 147.00 psychological mark. On the upside, the pair is approaching the 149.00 psychological level and the upper Bollinger Band at 149.05. A clear break above this zone could open the door for further gains, potentially leading to a retest of 149.63, the 200-day simple moving average, and then a push toward the 150.00 psychological barrier.

EUR/USD

After recording a loss of more than 1% in the previous session, EUR/USD traded around 1.1580 in the Asian session on Tuesday with limited movement. The pair continues to face downward pressure as the US dollar strengthens following the trade agreement between the United States and the European Union. The two sides reached a framework trade deal on Sunday, imposing a 15% tariff on most European goods, which is set to take effect on August 1. According to Bloomberg, this agreement ended months of deadlock. Meanwhile, European Central Bank policymaker Peter Kažimír said on Monday that there had been “no significant changes” to justify action in September, noting that clear signs of labor market deterioration would be needed to trigger any shift. Kažimír also acknowledged that the US-EU trade deal has reduced uncertainty, although its impact on inflation remains unclear.

Following the trade news, EUR/USD broke below the 20-day simple moving average at 1.1693 and the psychological 1.1600 level, dropping to a near two-week low of 1.1585. The 14-day Relative Strength Index (RSI) has turned bearish, suggesting traders are either taking profits or showing a slight bias toward the dollar. If EUR/USD decisively breaks below 1.1585, its early-week low, and the 50-day simple moving average at 1.1571, the pair could move toward the 1.1500 psychological level. A break of this level would likely open the door to 1.1450. On the upside, if EUR/USD manages to climb back above 1.1600, resistance lies at the 20-day SMA at 1.1693, followed by the 1.1700 psychological level.

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