Market Analysis
GOLD
Gold breaks out of consolidation, closing yesterday’s session with a strong bullish breakout. Both the MACD and RSI now support continued upside, with growing bullish momentum. Fundamentally, this breakout is being driven by a cocktail of factors pressuring the U.S. Dollar:
- Renewed tariff concerns targeting nations not “negotiating in good faith”
- A credit downgrade of the U.S. government by Moody’s
- A wait-and-see stance from the Federal Reserve on rate cuts
- Rising geopolitical tensions in the Middle East
- Trump’s withdrawal from mediating the Russia-Ukraine conflict
- Anticipation of a vote on Trump’s major tax reform
- Safe-haven buying driven by increased macro uncertainty
These events have increased global demand for gold as a safe-haven asset. With strong alignment between technicals and fundamentals, we expect further upside—potentially testing or exceeding historical highs—depending on how these drivers evolve.
SILVER
Silver prices remain below historical averages even as gold rallies. However, bullish momentum is growing, with both MACD and RSI showing strengthening volume. In risk-off environments, silver often benefits as traders diversify away from the Dollar. If sentiment persists, we could see silver catch up and push higher alongside gold.
DXY (U.S. Dollar Index)
The Dollar is under renewed pressure from macroeconomic headwinds. Recent tariffs, Moody’s downgrade, and the Fed’s dovish tone have all contributed to bearish sentiment. Both the MACD and RSI reflect declining momentum, indicating further downside risk. Unless we see a fundamental shift, the Dollar may remain weak across major pairs.
GBP/USD
The Pound has broken out above its prior range, signaling a bullish continuation. MACD and RSI both confirm solid upside momentum. However, caution is advised as several resistance levels remain overhead. We expect the Pound to maintain its gains, but potential pullbacks near key resistance should not be ruled out.
AUD/USD
Despite Dollar weakness, the Aussie remains flat. Market expectations of another rate cut from the RBA are suppressing demand. Goldman Sachs now forecasts:
- 25bp cuts in July and August
- A final cut in November, bringing the terminal rate to 3.1%
Markets have priced in a >50% chance of a July 8 rate cut, up sharply from <20% last week. Technically, the Aussie remains range-bound. We’ll wait for a clean break in either direction before taking a position.
NZD/USD
The Kiwi initially broke higher but failed to sustain its momentum. Still, both MACD and RSI continue to show bullish momentum. Compared to the Aussie, the Kiwi remains more resilient. With the RBNZ expected to cut rates by 25bp, short-term weakness is possible, but the structure hints at a potential bullish continuation if resistance is cleared.
EUR/USD
The Euro is gaining strength, now holding a clear bullish bias. MACD and RSI both confirm upward momentum, though RSI is nearing overbought conditions—hinting at a possible short pullback. As long as the pair holds above support, we expect further gains to continue.
USD/JPY
USD/JPY remains in a downtrend. The MACD shows strong bearish volume, and the RSI supports continued downside. A brief corrective move may occur, but sentiment favors a bearish continuation. Unless there’s a shift in risk or policy expectations, we remain bearish on this pair.
USD/CHF
The Franc is strengthening rapidly, pushing USD/CHF lower. MACD and RSI both reflect rising bearish momentum. The structure is firmly bearish, and we anticipate continued downside as long as the Dollar remains under macro pressure.
USD/CAD
USD/CAD is sliding lower, with both MACD and RSI confirming increased bearish pressure. With structure favoring sellers, we expect more downside in the coming sessions. Unless there’s a reversal in U.S. fundamentals, CAD is likely to continue gaining ground.
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 has surged on a perfect storm of bearish fundamentals for the U.S. Dollar—tariffs, credit downgrades, and geopolitical instability. Silver is gaining momentum, and the majority of major currency pairs are capitalizing on dollar weakness. While some pairs like AUD remain range-bound due to domestic rate expectations, the broader outlook favors continued safe-haven buying and a weaker greenback. Visit: https://gfs-markets.com/
