US Markets
US equity indices closed higher yesterday, with MAG7 leading the charge. SPX rose 1.7% to $7,610, testing its all-time highs, and NDX jumped 2.3%. In today’s session, both indices are marginally higher, with SPX hitting a fresh record of $7,620. The outlook for today is bullish.
Magnificent Seven tech stocks were on quite a roll yesterday, adding $678.3 billion in market cap. Combined, they added $1.77 trillion in market value, a record for that group of stocks over three days. This is due to the resilience of earnings growth in the majority of these companies. Q2 earnings season is likely to show that SPX’s EPS has grown 47% since the same period last year, according to Bloomberg. Palantir reported blockbuster earnings yesterday. The government revenue segment rose 90%, and U.S. commercial revenue surged 149%. The AI software company raised full-year revenue guidance to $8.15 billion to $8.16 billion, up from prior guidance of $7.65 billion to $7.66 billion. Companies scheduled to report quarterly results on Tuesday include SpaceX, Advanced Micro Devices, Caterpillar, Merck, Amgen, and McDonald’s. The ISM manufacturing survey reached its highest level since May 2022 (55.6), comfortably exceeding the consensus. Economic indicators due Tuesday include the U.S. trade balance, factory orders and job openings.
Technically, the SPX is trading around $7,620. Yesterday’s breakout above the ascending triangle on the hourly chart confirms the bullish continuation pattern, keeping the near-term trend constructive. A sustained hold above $7,620 would strengthen the case for the next leg higher, with resistance around $7,660 followed by $7,700. On the downside, initial support lies between $7,580 and $7,600, making this an attractive zone for long entries on any pullback. Stronger support sits around $7,530-$7,550. The 14-day RSI is near 60, indicating bullish momentum with room for further upside.
Gold and Silver
Gold is trading slightly higher 0.22% at $4,062 as bulls attempt to push gold prices but are being met with scepticism over further Fed tightening. U.S. job openings will be the focus in the near-term, with JOLTS, ADP employment and nonfarm payrolls all on the schedule this week. Any softness in the labour market would be a boon for gold prices, but a resilient labour market could keep the Fed from easing policy, which would keep the dollar strong and pressure gold prices.
Gold sentiment is improving following weeks of underperformance, but a lack of upside momentum is keeping prices from making a major move higher. Leading banks have not revised their long-term bullish forecasts, predicting gold will recover to $4,500-$5,000/oz in the next several quarters. However, it is unlikely that the market will see a strong gold rally on the back of official demand alone. While central bank gold purchases remain robust, they are far below the record purchases of 2024. A true gold rally is more likely to come when the market prices a more accommodative Fed.
Gold remains in a consolidating pattern as buyers attempt to push prices back above the $4,150 level, but prices continue to fail to make higher highs. Buyers have successfully defended $4,000 support for several sessions in a row, and have managed to lift prices back toward $4,060. A break above the $4,100 level would be required to push the market higher, but a failure to hold above $4,000 would open up the next level of support at $3,960.
XAG/USD remains range-bound in a consolidating pattern just above the key $59.00 level, but buyers continue to show strength as momentum indicators turn positive. MACD have started to move off the lows, and Stochastic is rising back into positive territory, but the recovery remains unconfirmed until the key $60.00 level is taken out. A strong break of the level would set up the market for a retest of the $61.00-63.00 area, but a failure to defend the current range at $58.00 will open up support at $56.00.
US Dollar Index
The US Dollar Index remains under pressure as market sentiment continues to favor a weaker U.S. dollar following Japan’s coordinated intervention with the United States to support the yen. The Japanese currency has rallied nearly 5% over the last three trading sessions with authorities signaling their commitment to curb excessive yen weakness. Reports suggest the US Treasury bought yen using euros, rather than selling dollars directly, highlighting a coordinated effort to strengthen the yen without sending a broader signal of a weaker dollar policy. Meanwhile, speculation of another round of intervention has kept traders cautious, while unusually high USD/JPY trading volumes of nearly $27 billion, compared with the recent average of $1.9 billion, underline the scale of market activity. Looking ahead, expectations that the yen could strengthen further this week are likely to keep the DXY under pressure. At the time of writing, DXY is currently trading at 100.016.
For intraday traders, the overall bias remains bearish as long as the DXY trades below the immediate resistance at 100.215. The next key resistance is the 9 Day EMA around 100.45. On the downside, 99.62 (200-day EMA) serves as the immediate support followed by the last session’s low at 99.41. The EUR/USD pair is currently trading around 1.1507. The immediate resistance is seen at 1.1559, which coincides with the downward-sloping trendline and the last session’s high, making it a strong resistance zone. On the downside, 1.1476 serves as immediate support, a key horizontal base level.
Crude OilÂ
Oil prices rose Tuesday in Asia amid mixed signals over efforts to reopen the Strait of Hormuz. WTI is up 1% at $79 and Brent is up 1.6% at $85.
Iran said Monday evening that no negotiations were underway with the U.S., nor were any meetings planned. This statement comes after Trump called off a major strike on Iran to provide more time for talks on freeing up shipping in the Strait of Hormuz. However, the Iranian foreign ministry acknowledged that Iran was continuing talks with Oman on how to manage the Strait. The talks between Oman and Iran are focused on finding temporary arrangements over shipping transits in the strait.
Front-month West Texas Intermediate crude oil futures advanced 0.8% to $80.99 per barrel, and front-month Brent crude oil futures rose 1.3% to $84.89 a barrel, ICE data showed. Oil futures had slid on Monday on optimism over U.S.-Iran talks.
Technically, WTI is trading at $79, below the 9 and 21 EMA on the daily chart. Prices are still taking support at the 200 EMA on the daily time frame. On the 4-hour chart, immediate support is at the 61.8 fib level of $76.7, when drawn from the 2nd July low to the 23rd July high. A break below this level can push prices to the 72.4 level. Resistance is seen at $81, which is the downward trendline joining the highs of 23rd and 31st July. A break above this trendline can push prices to the $84 level.
Brent is trading at $85, below the 9 and 21 EMA and taking support at the 200 EMA on the daily time frame. On the 4-hour chart immediate support is at the 13th July breakout of $83 and resistance is at 50 EMA of $87.
