US Markets
US equity indices were mixed yesterday following a temporary cooldown in the AI rally. SPX was down 0.2%, closing around $7,730. In today’s session, SPX appears to be trading marginally higher around $7,740. The outlook for today is moderately bullish.
Healthcare stocks performed well yesterday as Eli Lilly reported strong results. Surging demand for its GLP-1 weight loss drugs drove revenue and net income higher. The company also raised its guidance. Memory companies, including SanDisk and Western Digital, reported strong results, though guidance fell slightly short of expectations, pulling share prices lower in the aftermarket. Overall memory demand remains robust. Major earnings today include Datadog, ConocoPhillips, Constellation Energy and Cloudflare. ISM Services PMI came in at 54.1, higher compared to the previous month but slightly below expectations—the uptick signalling the sector’s robustness. The next major economic data release, July payrolls, is scheduled for tomorrow.
Technically, the SPX appears to be consolidating between $7,720 and $7,800 while the broader trend remains bullish. Resistance is likely around $7,770, followed by $7,800. A break and sustained hold above $7,800 would be needed for the index’s next leg higher. On the downside, initial support lies around $7,660 (5-day SMA), making this an attractive zone for long entries on any pullback. Stronger support is around $7,600-$7,620, close to Tuesday’s breakout zone. The 14-day RSI is near 65, indicating bullish momentum with room for further upside.
Gold & Silver
Gold continued its winning streak, breaking through the 4,250/oz level to a seven-week high as a weaker U.S. dollar, falling Treasury yields, and hopes of a Strait of Hormuz deal improved sentiment for the precious metal.
Lower oil prices have tempered worries about energy-driven inflation and pulled back market expectations for additional Fed rate hikes, creating a favourable environment for non-yielding assets like gold.
Gold’s latest rally looks more convincing than macroeconomic fundamentals might suggest, and the rejection of sub $4,000 levels points to growing bullish conviction after a prolonged period of hesitation. Eyes now turn to the U.S. non-farm payrolls report on Friday, with a weak report providing further confirmation of the gold bull case, while a strong print will likely re-ignite U.S. dollar and Treasury yield momentum at the expense of gold.
On the chart, the trend remains bullish, but the metal is clearly overbought from its sharp move off the 4,000 level, with profit-taking evident near 4,300. A dip back toward 4,200-4,220 would make for a much more attractive trend-following entry.
Silver remains in a strong 4H uptrend, trading near $62/oz. Momentum is still on the buy side, but the trend is starting to look overbought, with resistance around $63. Near-term risk-reward is in favour of waiting for a retracement toward $60.6, with stronger support at $58.5-$59.0. The medium-term trend is bullish, but a pause or corrective pullback is likely ahead of the next wave of gains.
US Dollar Index
The US Dollar Index remains under pressure after weaker than expected U.S. economic data reinforced expectations that the Federal Reserve could adopt a more accommodative policy. The ADP Employment Report showed only 44,000 jobs were added in July, well below the expected 70,000, signalling a slowdown in the labour market. Meanwhile, the ISM Services PMI rose slightly to 54.1 but missed market expectations, with weaker employment and higher price pressures pointing to a mixed economic outlook.
Geopolitical uncertainty in the Middle East remains elevated as there is still no final agreement to reopen the Strait of Hormuz. The lack of clarity has kept traders cautious, providing some support to the U.S. dollar’s safe haven appeal.
The euro remains firm after German Factory Orders rose 3.1% in June, significantly above expectations, reinforcing expectations of an ECB rate hike in September. A stronger euro, which carries the largest weight in the DXY, could continue to put downward pressure on the U.S. Dollar Index.
DXY is currently trading around 99.75, remaining flat for the day. For intraday traders, the outlook stays bearish as long as the index trades below the 9-day EMA at 100.17, which acts as the key resistance. A move above this level could open the door for a test of the next resistance at 100.51, a horizontal resistance zone. On the downside, 99.41, the current week’s low, remains the immediate and key support. The EUR/USD pair is trading at 1.1544 after breaking above a downward-sloping trendline resistance, keeping the short-term outlook bullish. The pair has immediate support at the 9-day EMA, 1.1502 and key resistance is seen at 1.1618.
Crude Oil
Brent is up 0.4% today, and WTI is up 0.3%. Iran said it reached an agreement with Oman on a proposed shipping route through the Strait of Hormuz, leaving traders to assess the prospects for eased energy flows.
A joint statement from the two countries is under review and the route would remain active for two to four months, although the agreement does not mean a full reopening. The U.S. hasn’t clearly responded to the above developments yet.
Crude prices has seen a decline this week amid optimism that some form of accord to restore traffic through the vital waterway is near. Still, uncertainties remain and traders have been reluctant to fully unwind long positions, wary of being wrong-footed by a sudden escalation.
Meanwhile, US crude stockpiles rebounded from their lowest since 2018, while inventories at Cushing, Oklahoma, climbed back above the 20 million barrels widely considered to be the operational minimum, government data released Wednesday showed. Distillate exports — a category that predominantly covers diesel — rose to a new record. Elsewhere, oil loadings at the key Caspian Pipeline Consortium terminal on the Black Sea were disrupted again after drone alerts were issued nearby. The terminal handles most of Kazakhstan’s crude exports.
Technically, WTI is trading at $74, below the 9 and 21 EMA on the daily chart. Prices have also broken the 200 EMA on the daily time frame. On the 4 hour chart, immediate support is at the 78.6% fib level of $72.4, when drawn from the 2nd July low to the 23rd July high. A break below this level can push prices to the $70 level. Resistance is seen at $77 which is the 13th July breakout. Next resistance is at $80, which is the downward trendline joining the highs of 23rd and 31st July.
Brent is trading at $83, below the 9 and 21 EMA and has broken the 200 EMA on the daily time frame. On the 4 hour chart, immediate support is at $81.2. A break below this level can push prices to $78. Conversely, prices must cross above $85 for bullish momentum to pick up.
