Although last week’s US NFP (Non-Farm Payrolls) data beat expectations and gave US Dollar a slight boost, the rise was not strong enough to change its overall trend. This week, USD may come under pressure due to risks related to tariffs, national debt, and Unemployment Claims.

USD - Likely to Weaken in the Short Term

Reasons why USD may weaken:

• Trade war concerns are returning, as July 9 is the deadline for countries to negotiate tariffs with the US. Although USD is often considered a safe haven, if the market believes US trade policies will harm its own economy, funds may shift to other safe haven currencies such as CHF , JPY , or EUR .
• Rising debt and inflation concerns, after the US passed a new spending bill on July 4, 2025.
• Fed Minutes (released July 10) will be closely watched for clues on future interest rate directions. If the Federal Reserve (Fed) shows it is in no rush to raise rates, or expresses concerns about the economy, or adopts a “dovish” tone, the market will expect US rates to remain unchanged, making USD less attractive compared to other currencies.
• Unemployment Claims (released July 11) are expected to rise, raising worries about a weakening labor market. This could force the Fed to maintain a more accommodative stance, which usually weighs on USD.
• Technical Analysis: USD remains in a downtrend, with lower highs and lower lows. The price has not broken its bearish structure, so it may continue falling towards the next support zone around 95.230 – 94.680. Momentum also shows that selling pressure is weakening, so while USD could continue to fall in the short term, a reversal may occur if economic data turns positive.

Figure 1: DXY Daily Chart – July 8, 2025

Gold - May Benefit in the Short Term

Although gold dipped slightly after last week’s stronger-than-expected NFP data, a weaker USD could help prices recover because:

• Gold is priced in USD, so a weaker USD usually lifts gold prices.
• Trade tensions often drive investors towards safe-haven assets like gold.
• Technical Analysis: Gold is still trading within a narrow range, with support at 3117 and resistance at 3450. Momentum remains weak, indicating buyers have not yet taken full control. If gold fails to break above 3450 with strong volume and momentum, this sideways trend may continue.

Figure 2: Gold Daily Chart – July 8, 2025

Oil - May Decline or Stay Range-Bound

If USD weakens, oil prices may rise. However, if the trade war escalates, even with a weak USD, oil could fall or remain flat due to:

• Trade war - disrupted exports and imports - slower production - lower oil demand. This could offset the positive impact of a weaker USD.
• When political or trade tensions get out of control, funds tend to flow into gold or bonds rather than industrial commodities like oil.
• Conflicts in the Middle East are showing signs of moving towards ceasefire negotiations. If an agreement is reached, the risk of supply disruptions through the Strait of Hormuz will ease, putting downward pressure on oil prices.
• Technical Analysis: Oil remains in a sideways trend, with key support between 63.8 – 64.8. Momentum is weak, and if the price breaks below this support zone, oil could drop further in the short term, targeting the 0.768 Fibonacci level around 58.9.

Figure 3: Oil Daily Chart – July 8, 2025

Suggested Strategy

• USD: Prioritize selling when price pulls back to key resistance zones. Set tight stop losses and monitor tariff news (July 9), Fed Minutes (July 10), and Unemployment Claims (July 11) closely.
• Gold: Look for buying opportunities if price holds above strong support and bullish divergence appears on RSI, with short-term targets at nearby resistance levels.
• Oil: It is advisable to stay out or only scalp trade due to its unclear trend and strong sensitivity to geopolitical news.

Note

The opposite scenario can still happen. If Fed Minutes unexpectedly turn hawkish, showing the Fed is ready to maintain high interest rates, or if trade tensions ease quickly, USD may rebound strongly, putting downward pressure on gold and oil. Always stay prepared, manage risks strictly, and react flexibly to market changes.