Dollar Holds Steady Amid Holiday Calm; Tariff Uncertainty Looms

 Key Takeaways:

*The U.S. dollar traded steadily during the Independence Day holiday, supported by last week’s stronger-than-expected Nonfarm Payrolls (NFP) data.

*The Trump administration’s ongoing trade talks with trading partners are in focus, with the risk of fresh tariffs from August 1 if no breakthroughs are achieved.

*Gold prices eased amid tentative improvements in risk appetite but remain highly sensitive to any negative developments in trade discussions

Market Summary:

Two key macro events drove market volatility on Thursday: a strong U.S. jobs report and the passage of The U.S. dollar traded in a relatively stable manner as financial markets paused for the Independence Day holiday, with limited volatility due to the shortened trading session. The greenback remained buoyed by last week’s stronger-than-expected Nonfarm Payrolls (NFP) report, which showed a gain of 147,000 jobs, underscoring the resilience of the U.S. labor market.

However, the dollar’s bullish momentum was somewhat muted, with markets entering a cautious “wait-and-see” phase ahead of the resumption of full trading. The dollar index remains supported above the 97.00 level, but looming trade policy risks could cap further upside in the near term.

Investors are closely watching the expiration of the 90-day tariff pause granted by the Trump administration following the sweeping tariff measures introduced in April. The White House has reportedly extended negotiations with key trading partners, including the UK, Eurozone, and China, but warned that without a breakthrough, unilateral tariffs will be imposed from August 1 onward.

The extension of trade talks has provided temporary relief, weighing on safe-haven demand and leading gold prices to ease at the start of the week. The precious metal remains under pressure as risk appetite shows tentative improvement, but any negative developments in the trade discussions could swiftly revive demand for defensive assets.

Traders are advised to monitor the outcome of ongoing negotiations closely, as both the dollar and gold remain sensitive to geopolitical headlines and shifts in global risk sentiment.

Technical Analysis 

Dollar_Index, H4: 

The U.S. dollar has shown signs of a potential trend reversal, rebounding from its recent low of 96.84 and forming a higher-high price pattern. The index now faces a critical challenge near the 97.40 level, which coincides with the upper boundary of its previous sideways range—an area likely to act as a liquidity zone.

A decisive break above the 97.40 resistance would signal a stronger bullish shift for the greenback, potentially paving the way for further upside. Supporting the bullish case, the Relative Strength Index (RSI) has climbed back above the key 50 level, indicating a pickup in buying momentum.

At the same time, the Moving Average Convergence Divergence (MACD) has rebounded and is on the verge of crossing above the zero line, reinforcing the view that the prior bearish momentum is fading. Should the index gather sufficient strength to clear the resistance, it would mark a solid bullish confirmation for the dollar in the near term.

Resistance Levels: 97.40, 98.10
Support Levels: 96.50, 95.75

XAUUSD, H4

Gold prices have come under renewed pressure after hitting a recent high near the $3,365 mark, with the formation of a lower-high price pattern pointing to a potential trend reversal. The precious metal is now approaching a critical support zone near $3,300, which coincides with the 61.8% Fibonacci retracement level—a key technical threshold that could determine the next directional move.

A decisive break below the $3,300 level would likely signal a bearish trend reversal for gold, opening the door for deeper downside. However, the possibility of a technical rebound from this area remains, as it has historically served as a strong support point.

Momentum indicators reinforce the weakening bullish bias: the Relative Strength Index (RSI) has been gradually sliding, indicating waning buying pressure, while the MACD is approaching a potential bearish crossover near the zero line. Together, these signals suggest that the recent upward momentum is losing steam, and traders should watch closely for price action around the $3,300 mark to gauge the next move.

Resistance Levels: 3381.80, 3483.75
Support Levels: 3300.00, 3225.00