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International Energy Agency (IEA) Executive Director Fatih Barol and United Arab Emirates (UAE) Energy Minister Suhail al-Mazrouei talked down the hopes of witnessing any major Oil market moves while speaking at the Group of 20 (G20) energy ministers’ meeting held in India.

UAE Energy Minister highlighted the OPEC+ role and praised the cartel’s current moves while speaking at the G20 event on Friday stated Reuters. The Arab diplomat also ruled out any surprise moves from the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, collectively known as OPEC+.

On Saturday, IEA Chief Barol said, per Reuters, that the group sees tightening in the Oil market during the second half (H2) of 2023. However, the Oil market influencer appeared mostly indecisive as he highlighted the need for China’s demand pick-up to revise the energy demand forecasts and vice versa, despite defending a previous statement suggesting tighter markets in H2 2023.

Market reaction

The news fails to inspire Oil buyers as the WTI retreats from a three-month high marked the previous day to $76.55, down 0.24% intraday, amid early hours of Monday’s Asian session.

Also read: Stocks, oil, gas and wheat end week on a high

"Bank of Japan (BoJ) likely to revise inflation projections up," said Japan's top currency diplomat Masato Kanda per Reuters on early Monday.

The diplomat initially ruled out capacity to comments on the BoJ monetary policy moves but also suggested that the prices and wage hikes do overshoot the inflation forecasts.

Japan's Vice Finance Minister for international affair Kanda also cited a change in the corporate wage behaviour.

Market reaction

USD/JPY pauses four-day uptrend at the highest levels in two weeks after the macro announcement, mildly offered near 141.65 amid the early hours of Monday’s Asian session. That said, the Yen pair rallied heavily the previous day on the BoJ chatters.

Also read: USD/JPY oscillates around the 141.70 area ahead of BoJ, Fed rate decisions

• AUD/USD takes offers to refresh intraday low after downside Australia PMI for July.
• Preliminary readings of Australia S&P Global PMIs for July came in mostly downbeat even as manufacturing gauge improves.
• Market’s pre-Fed fears, US Dollar’s sustained recovery also weigh on Aussie pair.
• US PMIs will direct intraday moves but Australia inflation, US Q2 GDP and Fed will be crucial for clear guide.

AUD/USD renews an intraday low to around 0.6725 despite the mixed Australian activity data for July. In doing so, the Aussie pair takes clues from the below 50.0 levels of the PMIs, as well as portrays the market’s cautious mood ahead of the key week comprising top-tier data/events. That said, the upbeat jobs report from Australia failed to impress the pair buyers in the last week amid broad US Dollar strength.

Australia’s preliminary S&P Global Manufacturing PMI improves to 49.6 from 48.2 prior but the Services PMI drops below 50.0 level to 48.0 versus 50.3 prior, suggesting a contraction in the activities. With this, the S&P Global Composite PMI for July eases to 48.3 from 50.1.

It’s worth noting that the Aussie employment numbers posted a stellar jump for June in the last week and renewed bullish bias for the Reserve Bank of Australia (RBA). On the same line was the hawkish RBA Minutes for the latest monetary policy meeting where the policymakers paused the rate hike trajectory. However, the broad US Dollar strength, backed by upbeat US data and preparations for this week’s Fed meeting weighed on the AUD/USD price.

During the last week, United States housing numbers and regional manufacturing indices were mostly downbeat but an improvement in the Retail Sales Control Group for June allowed the US Dollar Index (DXY) to rebound from a 15-month low, as well as post the first weekly gain in three. That said, the greenback’s gauge versus six major currencies seesaw around 101.00 amid a sluggish start to the key week.

Previously, the upbeat prints of the University of Michigan’s (UoM) Consumer Sentiment Index and consumer inflation expectations for July helped the greenback to challenge the bearish bias. It’s worth noting, however, that the US Consumer Price Index (CPI) and Producer Price Index (PPI) for June joined the first below-expectations Nonfarm Payrolls (NFP) in 15 months to tease the Federal Reserve’s (Fed) policy pivot past July and drowned the US Dollar.

Hence, the last improvement in the US Retail Sales appears less convincing and hence this week’s top-tier US data, as well as the Fed monetary policy meeting announcement, will be crucial for clear directions of the AUD/USD pair. That said, preliminary readings of the US S&P Global PMIs for July will direct intraday moves of the Aussie pair and may keep the bears hopeful amid a likely improvement in the data versus the mostly downbeat Australia activity figures. However, major attention will be given to Australian inflation, the first readings of the US second-quarter (Q2) 2023 Gross Domestic Product (GDP) and Fed Chairman Jerome Powell’s speech for clear directions as the Fed’s 0.25% rate is almost given.

Technical analysis

A daily closing beneath the 200-DMA level of 0.6720, as well as a seven-week-old rising support line surrounding 0.6710, becomes necessary for the AUD/USD bear’s conviction.

• USD/JPY oscillates in a narrow range between the 141.60-141.80 area; market players await the key data.
• Japanese policymakers will likely keep monetary and yield control policies unchanged in the July meeting.
• The Federal Reserve (Fed) will announce its monetary policy decision on Wednesday.

The USD/JPY pair consolidates in a narrow range in the early Asian session. The pair currently trades near the 141.74 area, down 0.06% on the day. Markets turn cautious mood in the busy week of economic data and the Federal Reserve's (Fed) and Bank of Japan's (BoJ) monetary policy decisions.

The Japanese Yen fell sharply against the dollar on Friday after Reuters reported that the BoJ will likely maintain the easy-money policy and its yield control policy in the July meeting. On Friday, the Japanese core inflation rate came in at 3.3% in June, up from 3.2% the prior, 3.5% expected. This report showed that inflation in Japan remained above the Bank of Japan's 2% target for the 15th consecutive month.

Despite rising inflation in Japan, the central bank will likely maintain its yield curve control stance. BoJ policymakers prefer looking at more data to ensure wages and inflation continue to rise before modifying policy. This, in turn, led to the weakening of the Japanese Yen against its major rivals due to monetary policy divergences between the BoJ and Fed.

On the US Dollar front, the US economic data released were mixed, with Retail Sales falling short of expectations but indicating consumer resilience and housing market data falling after posting positive figures in May. While, the Unemployment Claims showed a solid figure. The anticipation for the Fed to raise rates after the July meeting increased to 28% from 15.9% last month.

After a rate pause in June, the Fed will announce its monetary policy decision on Wednesday. The market expected a 25 basis point (bps) rate hike. However, the focus will be on the statement and Chair Jerome Powell's press conference. This key event will trigger volatility across financial markets.

Looking ahead, market participants will focus on the Fed's monetary policy decision on Wednesday and the BoJ's interest rate decision on Friday. Also, the flash Manufacturing and Service Purchasing Managers' Index (PMI) from both the US and Japan will be watched by traders.

As per the latest New Zealand (NZ) foreign trade numbers from the New Zealand Statistics, the headline Trade Balance drops to $9M MoM in June versus $52M prior (revised). However, the annual trade deficit eased to $15.98B for the said month versus $-17.12B prior figures (revised from $-15.64B).

Further details suggest that Exports ease to $6.31B during the said month versus $6.97B (revised) prior whereas Imports also edge lower to $6.3B compared to $6.91B in previous readings.

Market reaction

NZD/USD offers no major reaction to the data while being depressed at the lowest levels in two weeks, around 0.6168 by the press time. That said, the Kiwi pair dropped heavily the previous week, mainly led by the broad US Dollar strength.

About New Zealand Trade Balance

The Trade Balance released by Statistics New Zealand is a measure of the balance amount between imports and exports, and it is published in New Zealand dollar terms. A positive value shows a trade surplus while a negative value shows a trade deficit. Any variation in the figures influences the domestic economy. If a steady demand in exchange for exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the NZD.

• Gold Price remains pressured towards the key SMA confluence after three-day losing streak from multi-week high.
• US Dollar recovery jostles with risk-on mood to keep XAU/USD sellers hopeful.
• Gold sellers need hawkish Federal Reserve announcements and United States growth, inflation data as Fed’s 0.25% rate hike is given.
• ECB, BoJ monetary policy meetings, PMIs also populate calendar and stand tall to direct XAU/USD moves.

Gold Price (XAU/USD) remains defensive around $1,960 as bulls and bears jostle amid the early hours of the key week comprising a slew of top-tier data/events, stabilizing after a three-day downtrend. That said, the XAU/USD dropped in the last three consecutive days on the US Dollar’s notable run-up. However, the market’s risk-on mood and cautious sentiment ahead of this week’s A-list events put a floor under the Gold Price.

Gold Price lures sellers as US Dollar rebounds

Gold Price dropped in the last three consecutive days, reversing from a multi-week high, amid the US Dollar’s corrective bounce off the lowest levels since early 2022. However, the greenback bulls are less convinced ahead of the top-tier United States data and the Federal Reserve (Fed) monetary policy, which in turn allows the XAU/USD bears to take a breather.

During the last week, United States housing numbers and regional manufacturing indices were mostly downbeat but an improvement in the Retail Sales Control Group for June allowed the US Dollar Index (DXY) to rebound from a 15-month low, as well as post the first weekly gain in three. That said, the greenback’s gauge versus six major currencies seesaw around 101.00 amid a sluggish start to the key week.

Before that, the upbeat prints of the University of Michigan’s (UoM) Consumer Sentiment Index and consumer inflation expectations for July helped the greenback to challenge the bearish bias.

It’s worth noting, however, that the US Consumer Price Index (CPI) and Producer Price Index (PPI) for June joined the first below-expectations Nonfarm Payrolls (NFP) in 15 months to tease the Federal Reserve’s (Fed) policy pivot past July and drowned the US Dollar, which in turn propelled the Gold Price earlier in July.

Hence, the latest recovery in the US Dollar appears to lack support from the top-tier US inflation and employment data, which in turn prods the Gold sellers as the key week begins.

Mixed concerns about China, cautious mood defend Gold buyers

Despite the US Dollar’s run-up and the last three-day downtrend, the Gold Price ended up posting weekly gains as the market’s anxiety ahead of this week’s data/events pushed traders toward the traditional safe-haven. Also putting a floor under the XAU/USD could be the mixed headlines about the US-China ties and the recent optimism in India, as well as in the US.

It should be noted that Washington appears in the mood to restore its political ties with Beijing via multiple diplomatic visits and hence suggest likely better days for the Sino-US trade, as well as the Gold price, moving forward.

Elsewhere, markets in India and the US have recently refreshed their yearly highs even as the Treasury bond yields also improved, which in turn suggests more XAU/USD demand from the key customers and battled the Gold bears.

US Q2 GDP, Fed will be the key for XAU/USD traders

Given the lack of confidence in the US Dollar’s recovery, the XAU/USD buyers remain hopeful by keeping their eyes on the first readings of the top-tier United States data, as well as the monetary policy announcements from the Fed.

That said, the first readings of the US second-quarter (Q2) 2023 Gross Domestic Product (GDP) Annualized, expected 1.6% versus 2.0% prior, will be the key data to watch for the Gold traders. On the same line are the initial readings of the US Q2 Personal Consumption Expenditures (PCE) Prices and Purchasing Managers Indexes (PMIs) for July. Additionally, the Fed’s preferred inflation gauge, namely the PCE Price Index and Consumer Confidence for June and July respectively will also entertain the Gold Price traders moving forward.

Apart from the aforementioned top-tier catalysts, today’s preliminary readings of July’s Purchasing Managers’ Indexes (PMIs) for the Eurozone and the US will be crucial to watch for the Gold traders. Should the scheduled data arrive positive for the US, led by stronger prints of services PMI, the Gold Price may witness further downside.

Above all, the Federal Reserve’s (Fed) ability to defend the hawks, even after announcing the widely anticipated 0.25% rate hike, will be crucial to watch for the XAU/USD traders.

Gold Price Technical Analysis

Gold Price reversed from a nine-week-old horizontal resistance and broke a fortnight-long support line to convince sellers.

The downside bias about the XAU/USD also takes clues from the bearish signals from the Moving Average Convergence and Divergence (MACD) indicator and the descending Relative Strength Index (RSI), placed at 14, which is not oversold.

With this, the Gold Price appears set to test the convergence of the 100 and 200 Simple Moving Average (SMA), close to $1,940 by the press time.

However, the XAU/USD’s downside past $1,940 seems difficult as multiple levels marked from late May, around $1,935-30, can challenge the bears afterward.

In a case where the Gold Price remains bearish past $1,930, the odds of witnessing a slump toward the $1,900 round figure and then to the yearly low of $1,893 marked in June can’t be ruled out.

Alternatively, the support-turned-resistance line stretched from early July, around $1,975 by the press time, guards the immediate upside of the XAU/USD price.

Following that, the previously stated multi-week-old horizontal resistance area surrounding $1,985 will be in the spotlight.

Should the Gold Price remains bullish past $1,985, the $2,000 round figure will act as the final defense of the bears.

Overall, the Gold price is likely to witness further downside but the road towards the south is long and bumpy.

Gold Price: Four-hour chart

Trend: Limited downside expected

• EUR/USD holds lower grounds after retreating from 17-month high in the last week.
• US Dollar’s recovery joins unimpressive EU data, absence of strongly hawkish ECB talks to weigh on Euro price.
• Slew of EU/US top-tier data, events to entertain EUR/USD traders.
• ECB, Fed both widely expected to announce 0.25% rate hike but future guidance will be key to watch.

EUR/USD licks its wounds at the lowest levels in more than a week, after declining in the last three consecutive days, as Euro traders brace for a bumper week comprising a slew of top-tier data/events. That said, the quote reversed from the highest levels since February 2022 in the last as the US Dollar cheered upbeat Retail Sales prints, as well as a recovery in the yields. However, the previous data anxiety prods the Euro pair traders of late around 1.1130.

US Dollar Index (DXY) not only posted the first weekly gains in three but also recovered notably from the lowest levels since April 2022, before ending the week around the highest levels in eight days. That said, the greenback’s gauge versus six major currencies seesaw around 101.00 amid a sluggish start to the key week.

That said, United States housing numbers and regional manufacturing indices were mostly downbeat but an improvement in the Retail Sales Control Group for June allowed the US Dollar Index (DXY) to rebound from a 15-month low, as well as post the first weekly gain in three.

Before that, the upbeat prints of the University of Michigan’s (UoM) Consumer Sentiment Index and consumer inflation expectations for July helped the greenback to challenge the bearish bias.

It’s worth noting, however, that the US Consumer Price Index (CPI) and Producer Price Index (PPI) for June joined the first below-expectations Nonfarm Payrolls (NFP) in 15 months to tease the Federal Reserve’s (Fed) policy pivot past July and drowned the US Dollar. Hence, the latest recovery in the US Dollar appears to lack support from the top-tier US inflation and employment data, which in turn prods the EUR/USD sellers as the key week begins.

On the other hand, European Central Bank (ECB) officials’ mixed statements fail to defend the ECB hawks and put a floor under the EUR/USD price amid the comparatively upbeat US data and Fed’s hawkish statements.

Amid these plays, Wall Street closed mixed while the US Treasury bond yields posted a mild weekly gain, which in turn favors US Dollar’s further upside and weighs on the EUR/USD price.

Looking forward, preliminary readings of the Eurozone and the US PMIs for July will direct immediate EUR/USD moves ahead of the monetary policy decision of the European central bank (ECB) and the Federal Reserve (Fed). Also important are the Eurozone and the US inflation clues, as well as the first readings of the second-quarter (Q2) 2023 Gross Domestic Product (GDP).

To sum up, EUR/USD will witness a heavily volatile week as top-tier data/events are up for fueling market volatility. That said, major attention will be given to the speeches of the ECB and Fed leaders.

Technical analysis

A daily closing below the 17-month-old previous support line, around 1.1140 by the press time, directs EUR/USD bears toward April’s peak of 1.1095.