Solid Goold Trading

Monday’s Edition

With Nick Goold

The big news last week was a surprise trade deal between the U.S. and Japan. The agreement will lower proposed tariffs on Japanese imports from 25% to 15%. This helped boost Japanese stocks, especially car companies, and pushed U.S. stock markets to record highs. Strong earnings from U.S. companies also supported the rally.

Investor mood was positive overall, with hopes that the U.S. might make similar deals with other countries. Economic data was mixed—U.S. services PMI was better than expected, but manufacturing was weaker as companies adjust to higher import costs. In Japan, inflation slowed slightly to 2.9%, down from 3.1% in June.

The U.S. dollar fell early in the week but recovered as traders now think rate cuts may be delayed. Gold rose at first due to trade worries, but dropped after the Japan deal was announced. Bitcoin stayed mostly flat, holding on to gains from earlier weeks.

Markets This Week

U.S. Stocks

The Dow Jones rose slightly last week to reach new record highs, helped by the U.S.–Japan trade deal and hopes for more agreements before the August 1 deadline. Calmer relations between President Trump and Fed Chair Powell also supported market sentiment. However, the Dow’s uptrend is weaker than the S&P 500 and Nasdaq, suggesting short-term range trading is likely. With many key events ahead this week, reacting to news will be important. The medium-term outlook remains positive, and buying on dips continues to be a good strategy. Key support levels are at 44,000, 43,000, and 42,000, while resistance is seen at 45,000, 45,100, and 45,500.

Japanese Stocks

Japanese equities came under pressure early last week after the ruling party performed poorly in the national election, raising expectations that the Prime Minister might step down. However, markets quickly reversed after a surprise U.S.–Japan trade deal was announced. While details were limited, the news was seen as very positive and helped the Nikkei 225 surge above 40,000円, nearing record highs. In the short term, the index appears overbought and may face a pullback in the coming week. However, the trade deal supports a positive medium-term outlook, and buying on weakness near the 40,000円 support level could be a favorable strategy. Resistance is now seen at 42,000円, 42,500円, and 43,000円, while support is at 40,000円, 39,000円, and 38,000円.

USD/JPY

USD/JPY started the week weaker as selling pressure emerged near the May highs, a key resistance area. However, the surprise U.S.–Japan trade deal boosted overall market sentiment and pushed U.S. long-term interest rates higher, helping USD/JPY recover to finish the week nearly unchanged. Looking ahead, this week is critical with both the U.S. Federal Reserve and the Bank of Japan holding policy meetings. While the Bank of Japan has signaled possible rate hikes later this year—which is typically negative for USD/JPY—the pair remains stuck in a range in both the short and medium term. Resistance is now seen at 148 and 149, with support at 146 and 145.

Gold

Gold moved higher at the start of last week, testing key resistance levels from May and June as markets grew concerned the U.S. might finalize major trade deals ahead of the August 1 deadline. However, the surprise announcement of the U.S.–Japan trade agreement eased those concerns, leading to a quick pullback and leaving gold prices nearly unchanged by the end of the week. Despite the short-term dip, gold remains well supported in the medium term, and buying on weakness continues to be the preferred strategy. In the short term, range trading is likely to continue, with resistance at $3,400 and $3,450, and support at $3,300 and $3,250.

Crude Oil

Crude oil traded slightly lower in a narrow range last week, as traders looked for fresh signals to guide the next big move. Prices initially rose on the back of the U.S.–Japan trade deal, but the rally faded, and crude ended the week near its lows. Price action is turning increasingly bearish, with the 10-day moving average now pointing down. In the short term, focusing on selling opportunities appears to be the better strategy. Key levels remain unchanged, with resistance at $70, $75, and $80, and support holding at $65 and $60.

Bitcoin

Bitcoin traded lower last week as profit-taking set in following its recent strong rally. However, support at $115,000 held firmly, with continued backing from the U.S. government helping to keep sentiment positive. In the short term, range trading looks like the best approach, as the 10-day moving average is now moving sideways. Medium-term, the outlook remains bullish, with higher levels still likely. Resistance is seen at $125,000 and $150,000, while support lies at $115,000, $110,000, and $105,000.

This Week’s Focus

Tuesday: U.S. CB Consumer Confidence, U.S. JOLTS Job Openings
Wednesday: Australia CPI, E.U. GDP, U.S. GDP, U.S. FOMC
Thursday: China Manufacturing PMI, Japan Bank of Japan Monetary Policy Statement, E.U, Unemployment Rate, U.S. Core PCE Price Index, U.S. Chicago PMI
Friday: Australia PPI, E.U. CPI, U.S. Nonfarm Payrolls, U.S. ISM Manufacturing PMI, U.S. Michigan Consumer Sentiment

This week could bring big moves in the markets, with several important events happening. The U.S. Federal Reserve and the Bank of Japan will both meet to decide on interest rates. They are expected to keep rates the same, so traders will focus on what the central banks say about future plans—especially when the U.S. might cut rates and when Japan might raise them.

The most important data comes on Friday with the U.S. jobs report. Before that, markets will also watch for any news about trade talks, especially between the U.S. and Japan, ahead of the August 1 tariff deadline. These events could cause sharp price changes across global markets.