Market Digest

Global financial markets began July following one of the most volatile quarters in recent years, with both gold and crude oil recording historic quarterly declines as investors increasingly priced in further Federal Reserve tightening and easing geopolitical risks across the Middle East.

The U.S. dollar remained well supported after stronger-than-expected JOLTS Job Openings reinforced confidence in the resilience of the U.S. labour market, encouraging expectations that the Federal Reserve could maintain restrictive monetary policy for longer. Higher Treasury yields continued to weigh on precious metals, while fading concerns over disruptions in the Strait of Hormuz reduced the geopolitical premium embedded in crude oil prices.

Gold struggled to recover after posting its steepest quarterly decline since 2013, while WTI crude suffered its largest quarterly loss since 2020 as improving shipping conditions and expectations of higher global supply overshadowed ongoing regional tensions.

Currency markets presented a mixed picture. The New Zealand dollar outperformed major peers following a sharp improvement in business confidence and stronger Chinese manufacturing data. Meanwhile, the euro remained under pressure after softer inflation figures from Germany and France reduced expectations for additional European Central Bank tightening.

Investors now shift their attention to speeches from Federal Reserve Chairman Kevin Warsh and Bank of England Governor Andrew Bailey, alongside the latest ISM Manufacturing PMI, which could provide fresh direction for currencies, commodities, and global risk sentiment.

Technical Analysis

NZD/USD – Recovery Emerges but Bears Remain in Control

NZD/USD has staged a modest rebound from recent multi-month lows; however, the broader technical outlook remains bearish. The pair continues trading below all major moving averages while MACD maintains a bearish crossover and RSI remains weak, indicating sellers still dominate market momentum. A sustained move above 0.5680 would improve the near-term outlook, while failure to hold current levels could expose support at 0.5580 and potentially 0.5530.

EUR/USD – Bearish Structure Continues Despite Temporary Support

EUR/USD continues to trade within a broader downtrend despite stabilising around the 1.1400 region. Technical indicators remain negative as price stays below all major moving averages and momentum indicators continue favouring sellers. A break above 1.1460 would signal stronger recovery potential, while renewed weakness could see the pair revisit support at 1.1160 before targeting 1.1080.

XAU/USD – Gold Tests Major Support Near $3,930

Gold remains under sustained selling pressure as bearish momentum continues to dominate price action. The metal trades below all major moving averages, with MACD and RSI signalling continued downside risk. Although oversold conditions could encourage temporary rebounds, a decisive break below $3,930 may accelerate losses toward $3,800. A meaningful recovery would require prices to reclaim resistance around $4,330.

Economic News

Gold Records Worst Quarterly Performance Since 2013

Gold closed the second quarter with its largest quarterly decline in more than a decade as rising U.S. interest-rate expectations and resilient economic data strengthened the dollar and reduced demand for non-yielding assets. Investors now await upcoming U.S. employment reports, which could determine whether bullion extends its decline or finds support.

Oil Suffers Largest Quarterly Drop Since 2020

WTI crude finished the quarter with its steepest decline since the early stages of the pandemic as improving shipping activity through the Strait of Hormuz and expectations of increased global supply outweighed ongoing geopolitical risks. Market participants continue monitoring developments surrounding Iran and OPEC production policy for further direction.

New Zealand Dollar Gains on Improved Business Confidence

The New Zealand dollar outperformed after ANZ Business Confidence rose to its highest level in several months while stronger Chinese manufacturing data improved overall market sentiment. Although expectations for additional Reserve Bank of New Zealand tightening have eased, improving economic indicators provided meaningful support for the Kiwi.

Euro Weakens as Inflation Continues to Cool

The euro remained under pressure following softer inflation readings from Germany and France, reinforcing expectations that the European Central Bank may adopt a more cautious policy stance. While retail sales showed signs of improvement, lower energy prices continue to reduce inflation pressures across the Eurozone.

U.S. Dollar Supported by Strong Labour Market

The U.S. dollar remained firm after stronger-than-expected JOLTS Job Openings confirmed ongoing resilience in the labour market. Federal Reserve officials continued emphasising that inflation remains above target, reinforcing expectations that interest rates may stay elevated for longer despite easing geopolitical risks and lower oil prices.

Upcoming Economic Events

Market participants will closely monitor speeches from Federal Reserve Chairman Kevin Warsh and Bank of England Governor Andrew Bailey, together with the ISM Manufacturing PMI report. These events are expected to provide fresh insight into the outlook for monetary policy and could generate significant volatility across the U.S. dollar, gold, oil, and major currency pairs.