CPI data to set the stage for the week
CPI data to set the stage for the week
Market summary
The forex market opened the week on a cautious note, driven by rising trade tensions after U.S. President Donald Trump threatened to impose a 30% tariff on imports from the European Union and Mexico starting August 1.
This escalation boosted safe-haven demand for the U.S. dollar, pushing it higher across the board.
Meanwhile, gold held firm above $3,350/oz, and Bitcoin surged to nearly $122,000, backed by strong institutional flows.
USD performance
- DXY Index: Trades above 98.00, the highest since June 25.
- Drivers:
-
- Trump’s tariff threats on EU & Mexico
- Renewed friction between the White House and the Federal Reserve
- Anticipation of today’s key U.S. CPI report, which may shape the next monetary policy moves
Major FX pairs
- EUR/USD:
Slumped to a 2-week low near 1.1650, pressured by dollar strength and EU-U.S. trade tension.
Bias: Bearish – Next support at 1.1620. - GBP/USD:
Hovering around 1.3450, extending its pullback from multi-year highs. UK GDP data due later this week.
Bias: Neutral – Break below 1.3400 may trigger downside toward 1.3320. - USD/JPY:
Despite USD strength, the pair remains capped below 147.50 as markets await BoJ’s inflation outlook.
Bias: Cautiously bullish – Watch 148.20 resistance. - AUD/USD:
Weak amid risk aversion, trades near 0.6560.
Bias: Bearish – Break below 0.6530 opens door to further downside. - NZD/USD:
Underperformer of the day, down over 0.5%.
Bias: Bearish – Next target at 0.6070. - USD/CAD:
Steady around 1.3700, supported by oil gains offsetting USD strength.
Bias: Neutral – Balanced between oil sentiment and USD.
Commodities
- Crude Oil (WTI):
Trading near $67.50/barrel, following Friday’s 2.6% jump
Support: $66.30 | Resistance: $68.50
Outlook: Neutral to bullish, unless new sanctions emerge on Russian oil buyers - Gold (XAU/USD):
Holding above $3,350, eyeing key Fib resistance at $3,377
Support: $3,330 | Resistance: $3,377
Outlook: Bullish – safe-haven flows remain supportive - Silver (XAG/USD):
Surpasses $39.00/oz for the first time since 2011
Outlook: Strong bullish momentum – Eyes on $39.80, then $40.20
Cryptocurrencies
- Bitcoin (BTC/USD):
Testing all-time highs near $122,000, fueled by aggressive institutional demand and technical momentum
Outlook: Bullish – but beware of sharp intraday corrections
Market wrap-up
A tense and event-heavy week kicks off with the spotlight on U.S. inflation data (CPI) due today. The results could shift market sentiment decisively and influence the Fed’s interest rate path.
Gold may gain further if CPI softens.
Dollar strength could persist on hawkish inflation.
Caution is warranted with JPY trades ahead of BoJ’s meeting, and crypto bulls should remain alert for volatility.
Strategy for today
Stay nimble, focus on data surprises, and monitor tariff developments closely as they reshape market flows.
Author
Ahmed Alsajadi
Independent Analyst
Ahmed Al-Sajjady is a professional economic and market analyst with over five years of experience in macroeconomic forecasting and institutional trading methods (SMC/ICT).
