Iran Denies Talks; ISM Boosts USD - CPT Markets

Market Wrap-up: Strong ISM Data Lifts USD While WTI Trades Above $80

Markets turned more subdued following Monday's sharp volatility. WTI crude recovered modestly to the $80 level after Iran rejected reports that Washington and Tehran had planned to hold talks yesterday.

The denial kept concerns over potential supply disruptions in the Middle East alive. However, President Donald Trump had already cancelled the previously planned military strike. He also stated on Truth Social, "Whether Iran wants to admit it or not, we are, in fact, talking of a solution to a problem that they have caused, for decades." The remarks helped limit further gains in oil prices by maintaining expectations that diplomatic channels remain open.

Meanwhile, the latest ISM Manufacturing PMI showed US factory activity expanded at its fastest pace in more than four years. The July reading rose to 55.6 from 53.3 in June, beating the market expectation of 54.0.

The employment index climbed sharply to 52.8 from 49.7, while the Prices Paid Index eased to 71.1 from 73.0, although it remained above the consensus forecast of 70.3.

Following the release, the US Dollar Index (DXY) edged higher toward 99.90. US equities also advanced, led by the Dow Jones, which surged nearly 700 points to a fresh record high of 53,340.

Technology and communication services stocks continued to drive the rally. Meta Platforms gained 6%, Amazon climbed more than 4%, surpassing a $3 trillion market capitalization for the first time while posting a record closing high. Nvidia rose nearly 3%, while Alphabet and Microsoft both added almost 5%.

Gold slipped 0.3% to $4,029.84/oz as a firmer US dollar offset continued geopolitical uncertainty. Elsewhere in the precious metals market, spot silver declined 0.8% to $57.18/oz, platinum fell 1.6% to $1,616.42/oz, while palladium lost 1.8% to $1,251.16/oz.

Looking ahead for today, traders will focus on the US Trade Balance, Factory Orders, and, most importantly, the JOLTS Job Openings report, the first major labor market release of the week.

XAU/USD: Gold Eases Ahead of US Labor Market Data 

Key takeaway:

Gold eased during the August 4 session as investors continued to assess geopolitical risks stemming from the Middle East alongside persistent inflation concerns.

Market participants are also awaiting this week's series of US labor market releases for further guidance on the Federal Reserve's policy outlook.

Technical Outlook:

Daily Bias: Bearish

Support: 4,000

Resistance: 4,080

Oil: WTI Holds Above $80 on Iran Supply Concerns 

Key takeaway:

WTI maintained a constructive tone above $80 per barrel, supported by renewed concerns over Iran and potential supply risks in the Middle East.

In the latest developments, Iran said on Monday that no negotiations with the United States are currently taking place and that no meeting is planned. The statement contrasts with President Donald Trump's earlier comments, in which he cited renewed negotiations as the reason for cancelling military strikes over the weekend.

Technical Outlook:

Daily Bias: Bullish

Support: 79.00

Resistance: 83.00

DXY: US Dollar Climbs After Strong ISM Manufacturing Data  

Key takeaway:

The US Dollar Index edged higher and traded near 99.90, remaining just below the key 100.00 level.

The latest economic data showed the ISM Manufacturing PMI climbed to 55.6 in July from 53.3, exceeding the market expectation of 54.0. The Employment Index strengthened to 52.8 from 49.7, while the Prices Paid Index eased to 71.1 from 73.0 but remained above the consensus forecast of 70.3.

Meanwhile, the New Orders Index improved to 56.7, suggesting manufacturing demand remained resilient and underlying cost pressures continued despite some moderation in input prices.

Technical Outlook:

Daily Bias: Bearish

Support: 99.41

Resistance: 100.00

EUR/USD: Euro Softens Despite Improving Eurozone Manufacturing  

Key takeaway:

The euro weakened as the US dollar strengthened amid continued Middle East uncertainty. However, resilient economic data from the Eurozone could provide some support for the single currency.

The final HCOB Eurozone Manufacturing PMI was revised slightly lower to 51.9 in July from the preliminary estimate of 52.0.

Despite the revision, it improved from 51.4 in June and marked the strongest reading since April, indicating that the region's manufacturing sector continues to show resilience despite energy market uncertainty and the conflict involving Iran.

Technical Outlook:

Daily Bias: Bullish

Support: 1.15000

Resistance: 1.15591

USD/JPY: Japanese Yen Holds Near Intervention Highs Before BoJ Minutes  

Key takeaway:

The Japanese yen remained steady near post-intervention highs ahead of the Bank of Japan's upcoming Monetary Policy Meeting Minutes.

Japan's Finance Minister Satsuki Katayama said on Monday that Tokyo and Washington had conducted coordinated yen-buying intervention and would not hesitate to take further action if necessary.

Market attention now turns to the release of the BoJ's Monetary Policy Meeting Minutes tomorrow, covering the June meeting held before both last week's intervention and the latest interest rate decision.

Technical Outlook:

Daily Bias: Bearish

Support: 155.54

Resistance: 158.00

Oil remains the dominant macro driver as markets continue to balance geopolitical supply risks against signs that diplomatic engagement between the US and Iran has not completely broken down.

WTI's move back above $80 supported inflation expectations, while stronger than expected US ISM manufacturing data reinforced the dollar and lifted US equities, particularly large-cap technology stocks.

Gold softened as USD strength outweighed safe-haven demand, while major currency pairs were primarily driven by dollar positioning and regional fundamentals.

The next catalyst is the US labor market data, beginning with JOLTS Job Openings, which will help shape expectations ahead of the week's broader employment releases and the Fed policy outlook.

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