Solid Goold Trading

Monday’s Edition

With Nick Goold

Several Federal Reserve officials supported tighter monetary policy during the week, pushing long-term U.S. interest rates higher. The chance of an October rate hike rose to around 70%. U.S. manufacturing PMI beat expectations and reached its highest level in 59 months. U.S. stocks rose slightly despite inflation concerns, while the Nikkei rose strongly after Japan’s three-day holiday.

The yen weakened for most of the week as expectations for higher U.S. interest rates supported the dollar. However, it strengthened late in the week after Finance Minister Satsuki Katayama said the weak yen had been discussed during talks between Prime Minister Sanae Takaichi and U.S. President Donald Trump. This reminded markets that Japanese authorities remained concerned about further yen weakness and would stay in close contact with the U.S. on currency issues.

The U.S. and China agreed to extend their trade truce by two months to January 10, 2027. Meanwhile, talks between the U.S. and Iran about ending the war eased concerns about oil supplies, helping WTI crude oil fall below $100 a barrel.

Markets This Week

U.S. Stocks

The Dow Jones closed slightly higher for the week after testing lower levels as expectations of rising U.S. interest rates weighed on sentiment. The index recovered late in the week as WTI crude oil prices fell on hopes of an end to the war in Iran. After bouncing from support at 51,000, the Dow could rise further this week if it moves above the 10-day moving average. 52,000, 52,700, 53,000, 53,750, 54,000 and 54,500. Support is seen at 51,000, 50,000 and 49,000.

Japanese Stocks

The Nikkei 225 rose during Japan’s holiday break at the start of the week as the yen weakened and WTI crude oil prices fell below $100 a barrel, easing concerns about imported energy costs. The 10-day moving average is now turning higher and acting as support. With price momentum improving, buying on pullbacks looks like the preferred approach this week. Resistance is at 67,000, 67,500, 69,500, 70,000 and 71,000. Support is at 65,000, 64,000, 63,000 and 62,000.

USD/JPY

USDJPY broke above key resistance at 158 after strong U.S. data and comments from Federal Reserve officials that interest rates may need to rise to control inflation. The move tested authorities’ tolerance for further yen weakness. However, reports that President Trump and Prime Minister Takaichi discussed the weak yen prompted speculators to sell USDJPY. The wide interest rate gap continues to support the dollar, and buying on pullbacks remains the preferred approach while the pair stays above the 10-day moving average. Resistance is at 158.00, 159.00 and 160.00 while support is at 157.00, 156.00, 155.00, 153.00, 152.50, 152.00 and 150.00.

Gold

Gold remained under pressure last week as expectations of higher U.S. interest rates pushed prices back towards the lows seen earlier in the month. The downtrend remains in place, with prices closing below the 10-day moving average, although support is still holding. Weaker U.S. economic data this week could ease rate hike expectations and create a buying opportunity. Resistance is at $4,400, $4,500, $4,600, $4,650, $4,700, $4,775 and $4,900, while support is at $4,225, $4,200, $4,125 and $4,100.

Crude Oil

WTI crude oil fell below $100 early last week as tensions eased in the Middle East. On Thursday, Iran proposed a seven-day plan to reopen the Strait of Hormuz and restart nuclear talks under certain conditions. The short-term trend has now turned lower, with the 10-day moving average potentially acting as resistance. Selling on rallies towards this level remains the preferred approach, provided negotiations do not break down. Resistance is at $100, $105, $110 and $115, while support is at $90, $85, $80, $75, and $67.50.

Bitcoin

Bitcoin continued its recent rise, breaking above $82,000 resistance early in the week and attracting further speculative buying. However, Bitget’s report that hackers stole around $350–$387 million from its hot wallets prompted profit-taking and highlighted the risks of holding crypto on exchanges. The trend remains positive, with buying on pullbacks the preferred approach while prices stay above $82,000. Resistance is at $85,000, $90,000, $95,000 and $100,000, while support is at $82,000, $75,000, $65,000, $62,000, $60,000, $55,000 and $50,000.

This Week’s Focus

Monday: Japan Monetary Policy Meeting Minutes
Tuesday: Australia RBA Interest Rate Decision, U.S. CB Consumer Confidence
Wednesday: Japan Industrial Production, Australia Building Approvals, China Manufacturing PMI, U.K. GDP and Business Investment, U.S. Core PCE Price Index, GDP and Chicago PMI
Thursday: Japan Tankan Index, U.K. Nationwide HPI, E.U. HCOB Eurozone Manufacturing PMI and Unemployment Rate, U.S. S&P Global Manufacturing PMI
Friday: Japan Tokyo Core CPI and Unemployment Rate, E.U. CPI, U.S. Nonfarm Payrolls

Crude oil prices will be in focus this week as markets follow talks aimed at ending the war. Traders will also watch the yen closely for signs of possible intervention and comments from U.S. and Japanese officials. Friday’s U.S. employment report will be the main economic release of the week. Ahead of that, U.K. and U.S. GDP data, along with Japan’s Tokyo core CPI, could also influence markets.