Flash Analysis: What's Shaking the Markets?

Market Overview

Pressure is increasing on the Federal Reserve to cut interest rates following a disappointing U.S. jobs report. Weak employment and manufacturing data have raised the likelihood of a September rate cut, leading to a decline in the U.S. Dollar and a rise in assets like Gold. Global trade remains a focus as new U.S. tariffs take effect.

Key Drivers:

1. U.S. Economic Data & Fed Outlook

Recent economic indicators suggest a slowing U.S. economy, supporting the case for rate cuts:

- Non-Farm Payrolls (NFP): Only 73K jobs added in July vs. 106K expected.

- ISM Manufacturing PMI: Index at 48.0, indicating contraction in the manufacturing sector.

- JOLTS Job Openings: Fell to 7.44M, below expectations.

Markets now price in an 80.8% chance of a rate cut in September, suggesting tariffs are less inflationary than feared.

2. Global Trade & Tariff Update

- Implementation: New tariffs delayed to August 7, with some already in effect, like the 50% tariff on semi-finished copper.

- Mexico: Granted a 90-day extension on certain tariffs.

- Global Impact: Existing tariffs on China and the UK remain unaffected, while new deals bring reduced tariffs with South Korea, Japan, and the EU. The U.S. is nearing agreements with Thailand, Cambodia, and Taiwan.

Market Analysis

GOLD

Gold prices rose sharply after last weeks jobs report signaled a weaker U.S. labor market. The price broke through the EMA and a key resistance level, shifting the overall market structure to bullish. With the MACD and RSI showing increased buying momentum and volume, we expect further buying in the coming days.

SILVER

Silver is lagging Gold and continues to consolidate at lower levels. Despite the MACD and RSI showing underlying buying momentum, the lack of a positive price response suggests weakness. We will maintain an overall bearish-to-neutral bias and expect consolidation until Gold becomes significantly overbought or Silver shows independent strength.

DXY

The Dollar is testing a critical support zone at the EMA200 and the previous low. The sudden sell-off, driven by fundamentals, is likely to continue. The MACD indicates more selling pressure is building, while a consolidating RSI at low price levels also points to growing bearish momentum. We expect more selling in the coming days.

GBPUSD

The Pound is rising from its recent sharp low and is approaching the EMA200. The MACD shows strong buying volume, and the RSI is supporting this momentum. However, we will not call for a complete trend reversal until we see a clear break above the previous high point and the EMA200.

AUDUSD

The Aussie dollar is nearing the EMA200, with both the MACD and RSI showing bullish growth. We expect to see more buying in the near term, likely followed by a period of consolidation. A full trend shift has not yet been confirmed.

NZDUSD

The Kiwi also rose sharply last week, with the MACD and RSI showing a healthy increase in volume and momentum. While the long-term trend has been bearish, the strength of this reversal warrants caution for sellers. A break of key resistance could signal a larger recovery is underway.

EURUSD

The Euro is now testing a key resistance boundary. A successful break above this level would signal an overall bullish shift in the pair's bias. The MACD and RSI indicate increasing buying momentum as the price challenges the EMA200. We are watching this market carefully for a potential trend change.

USDJPY

The Yen has strengthened significantly against the dollar, leading to a sharp sell-off in the USD/JPY pair. The move broke below a key support boundary, shifting the overall trend to bearish. The MACD and RSI confirm this selling momentum. We will continue to look for more bearish opportunities. On the domestic front, traders are monitoring political developments in Japan, as speculation grows over a potential resignation from Prime Minister Shigeru Ishiba.

USDCHF

The Franc strengthened aggressively amid U.S. Dollar weakness, pushing the USD/CHF pair down to a key support zone. The MACD and RSI both point to a continuation of the drop. A break below this support level would confirm a bearish continuation, and we will look for selling opportunities.

USDCAD

The USD/CAD pair has pulled back sharply from its high, with the MACD and RSI showing aggressive bearish growth. The price is now testing the EMA200. A crash below this level would confirm a bearish shift. Until then, our overall bias remains bullish, but we are cautious given the weakness in the dollar.

COT Report Analysis

AUD - WEAK (3/5)

GBP - WEAK (5/5)

CAD - WEAK (5/5)

EUR - STRONG (5/5)

JPY - STRONG (2/5)

CHF - WEAK (3/5)

USD - WEAK (3/5)

NZD - WEAK (5/5)

GOLD - STRONG (2/5)