31 July 2025,05:53
Daily Market Analysis
31 July 2025, 05:53
Key Takeaways:
*The Fed kept interest rates unchanged at 4.25%–4.50%, with Powell signaling it’s too early to discuss cuts, boosting the dollar.
*Hawkish Fed guidance and reduced rate-cut bets lifted the dollar index by 1%, approaching a key psychological level.
*Ongoing tariff negotiations—with South Korea pledging tariffs and U.S. investments—eased trade concerns and reinforced dollar strength.
Market Summary:
The U.S. dollar rallied sharply in the latest session after the Federal Reserve held interest rates steady, aligning with market expectations, while Chair Jerome Powell’s remarks cooled hopes for a near-term rate cut. The Fed left the benchmark rate unchanged at 4.25%–4.50% in a 9-2 vote, maintaining a hawkish tone amid persistent inflationary pressures and a resilient labor market.
Powell emphasized that while inflation has moderated, it remains too elevated to consider loosening monetary policy. “It’s still too early to talk about rate cuts,” he said, reinforcing the Fed’s data-dependent approach.
The dollar index climbed 1% to approach the psychologically key 100.00 level, buoyed by reduced bets on a September cut and broader optimism surrounding trade developments.
Adding fuel to the greenback’s strength, the White House continued advancing trade negotiations ahead of the August 1 deadline tied to Trump’s sweeping tariff policy. South Korea agreed to a 15% tariff framework alongside a $350 billion investment commitment in the U.S., while Brazil and India are also reportedly in talks. The moves have helped ease market concerns over global trade risks and bolstered investor confidence in the dollar.
Technical Analysis
DXY, H4:
The U.S. Dollar Index (DXY) extended its winning streak to a fifth consecutive session, surging over 1% in the latest trading day to test the key psychological resistance at the 100.00 mark. The index has climbed nearly 3% during the streak, signaling strong bullish momentum.
A decisive break above the 100.00 level would likely confirm a bullish breakout, potentially opening the door for further upside. Momentum indicators reinforce the bullish bias: the Relative Strength Index (RSI) remains elevated in overbought territory, while the MACD continues to trend higher above the signal line and zero threshold—both underscoring sustained buying pressure.
The rally in the greenback follows a combination of hawkish signals from the Federal Reserve and reduced expectations for a September rate cut, alongside easing trade tensions as the U.S. forges new tariff agreements with key partners.
Resistance Levels:100.30, 101.55
Support Levels: 99.20, 98.15
XAUUSD, H4
Gold extended its downtrend, falling to a fresh monthly low of $2,269.00, underscoring a bearish bias for the precious metal. While a brief technical rebound emerged, prices encountered stiff resistance near the prior consolidation range, before resuming the downward move—suggesting that recent upside was likely a liquidity-driven correction.
Momentum indicators support the bearish outlook. The Relative Strength Index (RSI) is approaching oversold territory, signaling continued selling pressure, while the MACD has crossed below the zero line, reinforcing the weakening momentum.
With the metal unable to sustain gains above key resistance and downward pressure intensifying, gold may remain vulnerable in the near term unless broader macroeconomic catalysts reverse sentiment.
Resistance Levels: 3381.80, 3483.00
Support Levels: 3225.00, 3140.40
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