Market Analysis
GOLD
Gold has decisively broken out of its consolidation zone, signaling strong bullish momentum into the new trading session. The MACD and RSI both confirm this trend, supporting a continuation higher.
This breakout is driven by key fundamental factors pressuring the U.S. Dollar:
- Renewed tariff threats targeting non-compliant nations
- Moody’s downgrade of the U.S. credit rating
- The Fed’s cautious “wait-and-see” approach to rate cuts
- Rising geopolitical tensions, particularly in the Middle East
- Trump’s disengagement from the Russia-Ukraine mediation
- An impending vote on major U.S. tax reform
These developments weaken the Dollar’s safe-haven appeal and boost demand for gold. Should these conditions persist, we could see gold testing or surpassing historical highs in the near term.
SILVER
Silver remains below its historical average but is showing rising bullish momentum. Both MACD and RSI are building, suggesting a potential spillover rally as gold surges. With risk sentiment shifting and the Dollar under pressure, silver could follow gold’s lead if volume expands. Upside remains possible if resistance is broken in the coming sessions.
DXY (U.S. Dollar Index)
The U.S. Dollar is under pressure, weakening across major pairs due to a deteriorating macro backdrop. Tariff concerns, credit downgrades, and uncertain Fed policy have all contributed to this shift. Technical indicators reflect growing downside:
- MACD: Increasing bearish volume
- RSI: Sloping lower with room for further decline
Without a positive catalyst, we anticipate continued softness in the Dollar.
GBP/USD
The Pound has broken out of its prior range, supported by strong MACD and RSI signals. While the trend is bullish, overhead resistance remains a concern. Traders should monitor reactions at key resistance levels, but the outlook remains constructive as long as the Dollar remains under pressure.
AUD/USD
Despite broader Dollar weakness, the Aussie remains range-bound. The RBA’s dovish shift has softened AUD’s appeal. Goldman Sachs now projects multiple rate cuts:
- 25bp cuts in July and August
- Another in November, with a terminal rate of 3.1%
Markets now price in over a 50% chance of a July cut—up from just 20% last week. Until a breakout occurs, we remain neutral on AUD/USD.
NZD/USD
The Kiwi shows more resilience than the Aussie, supported by bullish MACD and RSI signals. Although a rate cut is expected from the RBNZ, the Kiwi has been relatively strong. A 25bp cut is forecasted, with year-end rates projected near 2.83%.
If NZD/USD clears structural resistance, we expect bullish continuation.
EUR/USD
The Euro continues to gain against the Dollar, supported by bullish technicals. MACD remains strong, while RSI nears overbought territory—suggesting the potential for a short-term pullback. As long as price stays above support, the bullish bias remains intact.
USD/JPY
USD/JPY is trending lower, confirming bearish momentum. MACD signals strong downside volume, and RSI supports this view. Despite a chance for a minor correction, we expect continued Yen strength unless macro sentiment dramatically shifts.
USD/CHF
The Franc is rallying against the Dollar, with price action sharply lower for USD/CHF. Technicals support this move, with MACD and RSI aligned with the bearish trend. We maintain a bearish outlook, expecting further downside unless structural support holds.
USD/CAD
USD/CAD is showing continued weakness, with CAD strength taking hold. MACD and RSI reflect increased bearish momentum. Unless we see a reversal pattern or major U.S. data surprise, the structure supports ongoing downside.
COT Reports Analysis
- AUD – WEAK (5/5)
- GBP – STRONG (3/5)
- CAD – WEAK (5/5)
- EUR – STRONG (5/5)
- JPY – STRONG (3/5)
- CHF – WEAK (5/5)
- USD – MIXED
- NZD – WEAK (4/5)
- GOLD – STRONG (5/5)
- SILVER – STRONG (4/5)
Final Thoughts
Gold’s breakout reflects a major shift in sentiment as the Dollar weakens under the weight of geopolitical tension, fiscal risk, and cautious central bank policy. Silver, the Euro, Pound, and Kiwi are gaining momentum, while Dollar-based pairs such as USD/JPY, USD/CHF, and USD/CAD trend lower. Traders should stay alert to emerging breakouts and fundamental developments, especially around rate decisions, trade policy, and fiscal news. visit: https://worldquestfx.com/