DBG Markets: Market Report for July 31, 2026

Market Sees Volatility as Strong Tech Earnings Mix with Post-FOMC Unwinding

US Dollar, USDJPY, Nasda100 & Gold Analysis

Global financial markets opened Friday's session on a strong risk-on note, characterized by a sharp rebound in equities following promising mega-cap earnings reports and a steep sell-off in the US Dollar as rate-hike bets continue to rapidly unwind post-FOMC.

Volatile Thursday, More Volatility Ahead Today

Over the past 24 hours, market volatility remained elevated, driven by several major macro developments unfolding simultaneously. Highlights include a sharp plunge in USDJPY from near 40-year highs due to suspected official currency intervention by Japanese authorities.

· In equity markets, Microsoft and other major technology heavyweights delivered promising quarterly reports, sparking a broad sigh of relief across global financial markets and initiating a tech-led rally.

· Microsoft's acceleration in Azure cloud revenue growth alongside positive forward guidance on AI capital expenditures—combined with solid earnings from Meta and Amazon—provided a strong shot of optimism for global risk sentiment.

Bank of Japan Rate Decision & Japanese Yen Outlook

USDJPY experienced extreme volatility following a sudden, sharp sell-off from near 40-year highs, widely attributed to suspected official yen-buying intervention.

USDJPY, H4 Chart

Technically, key overhead resistance now sits at 160.60 – 161.00. Following yesterday's sharp decline, traders need to monitor this level closely. Meanwhile, the breakdown below the recent uptrend channel confirms that the immediate upward trend is broken, though the sharp momentum warrants cautious tracking.

· If price action regains ground above 161.00, USDJPY may return to a neutral-to-bullish consolidation bias.

· Conversely, a decisive breakdown below 160.00 will confirm strong bearish momentum.

Policy Outcome: At its policy meeting today, the Bank of Japan decided to maintain its short-term policy interest rate at 1.00%. However, a hawkish dissenting vote calling for a rate hike to 1.25% highlighted lingering internal pressure to address mounting inflation risks.

Technical Analysis & Key Market Levels

Dollar Potential Reversal & Breakdown Below 100.00

The US Dollar Index has faced severe downward pressure as the combination of easing PCE inflation and rate-hike unwinding dismantles long-dollar positioning.

USD Index, H4 Chart

Tech Earnings Rally Faces Yield Curve Test

US equity futures surged into Friday morning as strong earnings from Microsoft and Big Tech relieved valuation anxieties.

UT100, H4 Chart

The tech-heavy benchmark successfully reclaimed the 28,000 psychological floor, signaling a positive near-term sentiment recovery. However, upside momentum faces a crucial technical resistance zone at 28,300 – 28,600.

Macro Outlook:

While strong corporate earnings provide immediate upside momentum, the surge in long-term borrowing costs (evidenced by elevated 30-year Treasury yields) indicates that market participants remain concerned about the Fed falling behind the curve on long-term inflation. Demand for a higher risk premium poses a macro headwind for risk assets, particularly rate-sensitive sectors like tech equities.

Gold Expected to Maintain Range-Bound Structure

Spot gold continues to balance competing macro forces, with lower short-term yields and a weaker US Dollar offsetting headwinds from elevated long-term Treasury yields.

XAUUSD, H4 Chart

Regardless of the broader macro picture, gold's technical structure remains firmly range-bound. Gold continues to defend its primary demand belt between $4,000 and $4,020, while overhead resistance caps rallies near the $4,080 – $4,100 region.

XAUUSD, M30 Chart

Bottom Line & Asset Summary

Global markets opened Friday on a strong risk-on note as stellar tech earnings and moderating US PCE inflation triggered an unwinding of Fed rate-hike bets, sending the US Dollar Index below 100.00. While suspected Japanese FX intervention knocked USDJPY off 40-year highs ahead of the BoJ's rate hold at 1.00%, elevated 30-year Treasury yields keep equity traders cautious near overhead resistance.

· US Dollar Index: Bearish Breakdown / Double Top; lost 100.00 support on PCE unwinding, with 100.00 – 100.25 acting as primary resistance toward 99.50 – 99.20.

· USDJPY: High Volatility / Intervention Watch; pulled back from 40-year extremes, facing critical overhead resistance at 160.60 – 161.00 with downside confirmation below 160.00.

· Nasdaq 100 (UT100): Bullish Sentiment Recovery; reclaimed 28,000 support on strong tech earnings, but facing key technical resistance at 28,300 – 28,600 amid elevated 30-year yields.

· Gold (XAUUSD): Range-Bound Consolidation; defending $4,000 – $4,020 structural support, favoring shorting the upper range near $4,100 and buying the lower boundary near $4,000.