Solid Goold Trading

Monday’s Edition

With Nick Goold

The week remained focused on the Iran situation, as negotiations reached an important stage. Some progress was reported, but major issues remained, especially around Iran’s uranium enrichment program and how quickly sanctions could be eased.

USD/JPY pushed higher as the Bank of Japan stayed on the sidelines and markets continued to focus on the gap between U.S. and Japanese interest rates. U.S. economic data was weaker than expected, with the University of Michigan Consumer Sentiment report falling to 44.8 from 48.2. Fed Governor Christopher Waller also pushed back against hopes for early rate cuts, supporting the view that U.S. rates may stay high for longer.

WTI oil fell back toward $100 as hopes for a settlement reduced some of the immediate supply fears. Even with geopolitical risks, U.S. stock markets finished the week higher. The Dow reached a new record high, and the S&P 500 rose for the eighth straight week, helped by continued interest in AI stocks.

Markets This Week

U.S. Stocks

The Dow reached new record highs as worries about inflation and higher interest rates were outweighed by optimism about future company earnings. The uptrend remains strong, and with the potential for progress toward ending the conflict with Iran in the coming week, focusing on buying opportunities looks to be the best strategy. Resistance levels are at 51,000, 51,500 and 52,000. Support is seen at 50,000, 49,500, 49,000, 48,500 and 48,000.

Japanese Stocks

The Nikkei 225 returned to record highs as lower oil prices and a strong outlook for AI-related companies supported positive market sentiment. The recovery is encouraging, but the short-term trend is still moving sideways, so looking for range trading opportunities may be the preferred strategy this week. Resistance is seen at 64,000, 65,000, 66,000, 67,000 and 68,000, while support is at 61,000, 60,000, 59,000, 58,500 and 57,000.

USD/JPY

USD/JPY continued to test higher as short-term traders who expected more yen-buying action from the Bank of Japan were caught holding short positions. Comments from the new Fed Chair also supported USD/JPY, as he suggested that interest rate cuts may take longer than expected due to high inflation. For medium-term traders, selling opportunities ahead of 160 may be the preferred strategy, as intervention risk remains high near that level. For short-term traders, focusing on the current small range or waiting for higher volatility may be the better approach. Resistance is at 160.00, 160.50, 162.00 and 165.00, while support is seen at 158.00, 157.00, 156.00, 155.50 and 155.00.

Gold

Gold continued to test lower last week as a stronger U.S. dollar and expectations for higher long-term interest rates reduced demand for the metal. The market remains relatively quiet overall, and it was surprising that there was not more selling pressure after prices moved below last month’s lows. A quick end to the conflict with Iran could bring some buying interest back into gold, but for now, looking for further downside seems most likely to be the best strategy. Resistance is at $4,550, $4,600, $4,665, $4,750 and $4,900, while support is at $4,500, $4,450, and $4,350.

Crude Oil

WTI crude oil tested higher at the start of the week, but later fell back toward $100 after Trump indicated that talks with Iran were productive and close to a possible conclusion. The negotiations remain difficult to forecast, but Trump has a strong motivation to end the conflict quickly to help support the U.S. economy. At the moment, headlines about Iran are driving oil prices, and there appears to be more risk to the downside if progress toward a settlement continues. Resistance is at $105, $110 and $120, while support is at $95, $90, $80, $75, $70, and $67.50.

Bitcoin

Bitcoin fell last week as selling in ETFs and rising long-term interest rates around the world reduced demand for risk assets. Higher yields are becoming more attractive for some investors, which put pressure on Bitcoin. However, support at $75,000 held, so range trading opportunities may remain the best strategy as long as this level continues to hold. Resistance is at $80,000, $85,000, and $90,000, while support is at $75,000, $65,000, $60,000, and $55,000.

This Week’s Focus

Monday: U.K. and U.S. holiday
Tuesday: Japan BoJ Core CPI, U.S. CB Consumer Confidence
Wednesday: Australia CPI
Thursday: U.S. Building Permits, Core PCE Price Index, GDP, Durable Goods Orders and New Home Sales
Friday: Japan Tokyo Core CPI and Industrial Production, E.U. German Unemployment Rate, U.S. Chicago PMI

USD/JPY will still be important this week, as traders remain cautious about possible Bank of Japan intervention if yen weakness continues. The week may start quietly because of holidays in the U.K. and U.S., with no major economic announcements until Thursday. Markets are likely to focus mainly on headlines from the Iran–U.S. negotiations.