Solid Goold Trading

Monday’s Edition

With Nick Goold

After last Friday’s sharp sell-off sparked by renewed U.S.–China trade war fears, markets steadied this week as U.S. equities rebounded. President Trump helped calm investors by emphasizing that he wants to avoid further escalation with China. The reassurance supported a recovery in risk sentiment after the previous week’s turmoil.

In Japan, the USD/JPY and Nikkei 225 both fell as political uncertainty increased. Doubts grew over Sanae Takaichi’s chances of becoming prime minister after the LDP’s coalition partner Komeito withdrew its support, forcing the ruling party to seek a new alliance. The resulting political instability weighed on Japanese assets and strengthened caution among investors.

Gold continued its upward surge on safe-haven demand amid ongoing U.S. uncertainty, while concerns about the U.K. economy deepened after unemployment figures came in worse than expected and reports surfaced that the government may raise taxes. Meanwhile, Federal Reserve Chair Jerome Powell signaled that the central bank remains on track to cut short-term interest rates again later this year, reinforcing expectations of a more accommodative policy stance.

Markets This Week

U.S. Stocks

The Dow spent the week recovering earlier losses, avoiding the market correction that some analysts had predicted the previous week. Strong corporate earnings continue to support sentiment, and further positive results from major U.S. firms this week could help the recovery extend. However, with the 10-day moving average now pointing slightly lower and few key economic releases on the calendar, range trading appears to be the most practical approach in the short term. Resistance is now at 46,500, 47,000, and 48,000, with support at 45,500, 45,000, 44,000, and 43,000.

Japanese Stocks

The Nikkei 225 began the week sharply lower amid renewed concerns over U.S.–China trade tensions and doubts about Sanae Takaichi’s ability to form a government. However, the index gradually recovered as her negotiations with potential coalition partners progressed, restoring investor confidence. This week, the market is likely to continue moving higher and test historic highs, supported by optimism that a Takaichi-led government could mean fewer interest rate hikes ahead. Resistance is at 49,000円 and 50,000円, while support is at 47,000円, 46,000円, and 45,000円.

USD/JPY

The USD/JPY fell for most of the week as the strong rally that followed Sanae Takaichi’s election to lead the LDP faded. However, the pair recovered on Friday after finding solid support near 150. With the 10-day moving average still trending upward, further buying is expected this week as long as the market holds above the 150 support level. Resistance is at 152, 153, and 153.30, while support is at 150, 149, and 148.

Gold

Gold continued to benefit from global uncertainty and steady central bank buying as investors sought to diversify risk and add safe-haven exposure. With prices at record highs, the rally has surprised many analysts, and the upper Bollinger Band now represents the only meaningful resistance. While a profit-taking sell-off is inevitable at some stage, the uptrend is likely to remain intact as long as the market holds above the 10-day moving average. Resistance is now at $4,300, $4,400, and $4,500, while support stands at $4,200, $4,100, and $4,000.

Crude Oil

WTI crude remained under pressure last week as persistent fears of oversupply continued to drive speculative selling. Growing concerns about a potential slowdown in the U.S. economy further weighed on sentiment. Continued weakness appears likely, with the market targeting a break below the $60 level. Traders should look to sell into strength near the downward-sloping 10-day moving average. Resistance is now at $65, $66.50, $70, and $75, with support at $60 and $55.

Bitcoin

Bitcoin’s liquidation continued aggressively last week after hitting record highs earlier this month. The renewed trade tensions between the U.S. and China triggered the initial wave of selling, and the resulting downward momentum has fueled further declines. The market now looks firmly bearish, targeting a test — and potential break — below key support at $100,000. Selling remains the preferred strategy as long as prices stay below the $110,000 resistance level. Resistance is at $110,000, $120,000, and $125,000, while support stands at $100,000, $95,000, and $90,000.

This Week’s Focus

Monday: China GDP, U.S. Business Inventories and Industrial Production
Tuesday: E.U. ECB President Lagarde Speaks
Wednesday: Japan Trade Balance, U.K. CPI
Thursday: U.S. Initial Jobless Claims and Existing Home Sales
Friday: Japan National CPI and au Jibun Bank Services PMI, U.K. Retail Sales, E.U. HCOB Eurozone Manufacturing, U.K. S&P Global Composite PMI, U.S. Core CPI, S&P Global Manufacturing PMI, Michigan Consumer Sentiment and New Home Sales

With a relatively light schedule of economic releases, this week’s focus will shift to U.S. and Japanese politics to see whether markets can resume the recent equity uptrend and if gold can extend its rally. Bitcoin, which has fallen close to key support around $100,000, will also be watched closely for signs of further selling. While few major data points are due, sentiment could still be influenced by political developments and expectations for the Federal Reserve’s next policy move.