The Fed's favored inflation indicator warms up, the US dollar index approaches the 100 mark

On August 1, early trading in Asian market on Friday, Beijing time, the US dollar index hovered around 99.97. On Thursday, the US dollar index rose in the short term after the Fed's favorite inflation indicator unexpectedly rebounded, reaching the 100 integer mark for the first time in two months, and finally closed up 0.11% to 100.03, the sixth consecutive trading day and achieved its first monthly increase since 2025. U.S. Treasury yields rose and fell mixed, with the benchmark 10-year U.S. Treasury yields closed at 4.375%, and the 2-year U.S. Treasury yields closed at 3.963%. As the market risk aversion sentiment recovered while uncertainty remained before Trump's tariff limit, spot gold rebounded and once returned to the $3,310 mark, but narrowed its intraday gains after the release of PCE data, and finally closed up 0.46% to $3,290.24/ounce; spot silver continued to fall, finally closing down 1.12% to $36.71/ounce. International crude oil stopped falling three consecutive times. WTI crude oil once approached the US dollar 68 mark and finally closed down 1.29% at $68.92 per barrel; Brent crude oil finally closed down 1.25% at $71.69 per barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovered at $99.97. The dollar will record its first-month gains against major currencies on Thursday, supported by easing trade tensions and a U.S. economic recovery. The U.S. dollar index rose 0.16% to 99.949 points after rising nearly 1% in the previous trading day. The index recorded its first-month increase in 2025. What the Fed sees and its decisions, with the White House and many in the stock market hopeThere are conflicts and frictions between the actions taken by the Federal Reserve. If we give up hawkish tone stofoco.completely, hawkish stances, hawkish press conferences, then the dollar is justified, and it does. But today, the dollar has hit the brakes again due to friction between the Fed and the White House. Technically, if the US dollar index closes above the 100.00 level, it will move towards the nearest resistance level, which is in the range of 100.40–100.55.

Euro: As of press time, the euro/dollar hovers around 1.1426. The euro/dollar rebounded Thursday after strong U.S. economic data proved the Fed's reluctance to cut interest rates, as seen on Wednesday. Traders are ready for Friday's July non-farm employment data, while also releasing final data for the ISM Manufacturing PMI and the University of Michigan Consumer Confidence Index. Technically, if the EUR/USD successfully returns above 1.1465, it will move towards resistance at 1.1575-1.1590.

GBP: As of press time, GBP/USD is hovering around 1.3211. The GBP/USD fell again on Thursday, falling for the sixth straight session, with GBP (GBP) nearly 3% since it approached its high of 1.3588 last week. The dollar (USD) has gained widespread buying in the market, with the pound dragged back to bearish territory as U.S. inflation data rebounded and the upcoming non-farm employment report (NFP). Technically, GBP/USD needs to close above resistance level 1.3250–1.3270 to obtain sustainable upward action.

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On Friday, gold hovered around 3288.90. Investors need to pay attention to the impact of tariff policies, and in addition, they need to pay attention to the US non-farm employment report in July and the speeches of Federal Reserve officials. The performance of non-farm employment data will directly affect market expectations for the Fed's future policy. If the data is weak, it may reignite expectations of interest rate cuts, weaken the US dollar and boost gold prices; on the contrary, if the data is strong, it may further strengthen the Federal Reserve's hawkish stance and put pressure on gold prices. However, regardless of the data results, tariffs and geopolitical uncertainties are expected to continue to support gold's safe-haven demand, and gold prices are expected to remain high in the short term.

Technical: In the daily chart, gold fell further and is approachingThe key support level is $3,245. This position is expected to attract buying to intervene, with the risk clearly set below the support, and the goal is to rebound to the upper resistance area. The bears will pay attention to whether the support has fallen below. Once it breaks down, it may open up the space to fall to $3,120. In the 4-hour chart, a downward trend line defines the current bearish momentum. The bears may continue to rely on this trend line, with stop loss placed above it to drive gold prices to lower further. The bulls will pay attention to whether the trend line is effectively broken. Once the upward breakthrough is made, the target will first look at the previous high of $3,333. If the breakthrough is successful, it may extend to the next resistance level of $3,438. On the 1-hour chart, the structure is relatively simple. The bears are still concerned about whether there is a signal of price rejection near the trend line, while the bulls are concerned about signs of breakthroughs. The red line in the figure shows the average price fluctuation range for the day.

2) Analysis of crude oil market trends

On Friday, crude oil trading was around 68.76. Oil prices fell on Thursday, with U.S. President Donald Trump’s August 1 tariff deadline looming, and investors are concerned about uncertainty around countries that have not yet reached a trade deal with the United States.

Technical: WTI crude oil futures prices fell slightly in the previous trading day to consolidate their previous gains and try to gain new bullish momentum. The market is trying to ease overbought after RSI hits a high. This limited pullback did not destroy its dynamic support, the price was still stable above the 50-day index moving average (EMA50), and the main bullish trend in the short term is still dominant, and the price runs along the support line, which may facilitate subsequent upward recovery.

Forex market trading reminder on August 1, 2025

09:45 China's July S&P Global Manufacturing PMI

10:00 National Development and Reform stofoco.commission held a press conference

14:00 UK July Nationwide House Price Index Monthly Rate

15:50 France July Manufacturing PMI Final Value

15:55 Germany July Manufacturing PMI Final Value

16:00 Eurozone July Manufacturing PMI Final Value

16:30 UK July Manufacturing PMI Final Value

17:00 Eurozone July CPI annual rate initial value

17:00 Eurozone July CPI monthly rate initial value

20:30 U.S. July unemployment rate

20:30 U.S. July seasonally adjusted non-farm employment population

20:30 U.S. July average hourly wage annual rate

20:30 U.S. July average hourly wage monthly rate

21:45 U.S. July S&P Global Manufacturing PMI final value

22:00 U.S. July ISM Manufacturing PMI

22:00The final value of the University of Michigan Consumer Confidence Index in July

22:00 The expected final value of the one-year inflation rate in July

22:00 The monthly rate of construction expenditure in June

The next day 01:00 The total number of oil drilling rigs in the week from the United States to August 1

The above content is about "[XM Foreign Exchange Decision Analysis]: The inflation indicator favored by the Federal Reserve has recovered, and the US dollar index is close to the 100 mark". It is carefully stofoco.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!

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