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Published: 21 July 2026,06:15
Daily Market Analysis New
*The US dollar remained firm, with the DXY holding near 101.0, supported by safe-haven demand amid escalating Middle East tensions.
*US-Iran conflict intensified, including continued US strikes on Iranian targets and Houthi threats to Saudi shipping, raising concerns over potential disruptions to the Strait of Hormuz and global energy supplies.
*Gold traded around US$4,000–4,030/oz, supported by geopolitical uncertainty but unable to sustain stronger gains as higher Treasury yields and a firmer US dollar limited demand.
The US dollar remained firmly supported, with the US Dollar Index (DXY) holding near 101.0, as investors continued to favour the greenback amid escalating geopolitical tensions in the Middle East. Safe-haven demand strengthened after US forces launched a tenth consecutive day of strikes against Iranian targets, while Yemen’s Iran-backed Houthis announced a naval blockade on Saudi Arabia, raising concerns over disruptions to global energy supplies and shipping through the Strait of Hormuz. Although reports of a proposed 10-day ceasefire helped limit further gains in the dollar, markets remained cautious as diplomatic efforts have yet to produce a concrete breakthrough. Meanwhile, gold traded in a relatively narrow range around US$4,000–4,030/oz, briefly reclaiming the psychological US$4,000 level as geopolitical uncertainty continued to support demand for safe-haven assets.
The divergence between the US dollar and gold was largely driven by rising oil prices and Treasury yields. Brent crude briefly climbed above US$90 per barrel, reviving concerns that energy-driven inflation could slow the recent disinflation trend and encourage central banks to maintain tighter monetary policy. As a result, the US 10-year Treasury yield remained elevated around 4.60%, reinforcing demand for the US dollar through wider interest-rate differentials, particularly against lower-yielding currencies such as the Japanese yen. At the same time, higher real yields and a stronger US dollar reduced the appeal of non-yielding assets, preventing gold from extending its safe-haven rally despite heightened geopolitical risks.
Meanwhile, Federal Reserve expectations have turned more hawkish despite softer US inflation data released last week. Although markets still expect the Fed to leave interest rates unchanged at its upcoming meeting, swap markets continue to price in at least one additional rate hike before year-end as higher energy prices threaten to reignite inflation. Cleveland Fed President Beth Hammack reinforced this view by warning that inflation remains too high and that tighter monetary policy may still be required. The combination of persistent inflation concerns, elevated Treasury yields and a firmer US dollar continued to weigh on bullion, offsetting support from geopolitical uncertainty.
Overall, the US dollar continues to benefit from safe-haven demand, higher Treasury yields and expectations of a prolonged higher-for-longer interest rate environment. For gold, geopolitical tensions and ongoing central bank buying continue to provide underlying support, but upside remains capped by rising real yields, a stronger dollar and renewed expectations of further Fed tightening. Unless oil prices retreat, Treasury yields ease or markets become more confident that the Fed has completed its tightening cycle, gold is likely to remain range-bound around the US$4,000 level while the US dollar maintains its near-term bullish bias.
Technical Analysis
Dollar Index, H4:
The U.S. Dollar Index (DXY) is attempting to regain bullish momentum after successfully defending the rising trendline that has supported the broader uptrend since mid-June. Price has rebounded from the 100.80 support area and is now trading just below the key 101.35 resistance level. The recent series of higher lows suggests buyers are gradually regaining control, while the ascending trendline continues to reinforce the positive medium-term structure. A decisive breakout above 101.35 would confirm renewed upside momentum and expose the next resistance around 101.85. Conversely, failure to clear this resistance could keep DXY consolidating within the 100.80–101.35 range, with the trendline and 100.80 serving as the first line of support.
Momentum indicators are also improving. RSI has climbed to around 58 and remains above its moving average, indicating strengthening buying pressure while still leaving room before entering overbought territory. Meanwhile, MACD has completed a bullish crossover above the signal line, with the histogram turning positive, suggesting upside momentum is beginning to build after a period of consolidation. Together, these signals point to improving short-term sentiment, although confirmation from price breaking above resistance is still needed.
Resistance Levels: 101.35,101.85
Support Levels: 100.80, 100.10
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