US Dollar Index

The dollar generally rose after the second reading of US GDP data. Traders saw a rebound in the inflation component, catching the market off guard. The US dollar index broke through 107.00 and continued to rise. The dollar rose midweek, further away from the 11-week low hit recently. Investors assessed the strength of the economy and the outlook for tariffs after the latest remarks from US President Trump. The dollar fell sharply at the beginning of the week as economic data showed a sharp drop in consumer confidence, the latest in a series of data that expressed concerns about the strength of the US economy and persistent inflation, and caused US Treasury yields to plummet. The US dollar has experienced a considerable sell-off since January, much of which is due to the adjustment of US real interest rates to a lower level, and the poor performance of the data seen (including yesterday's data) has largely contributed to this adjustment.

From the technical trend this week, the US dollar index rebounded strongly above 107.00 and regained the 100-day simple moving average of 106.76. The technical indicators of the daily chart, the 14-day relative strength index (RSI) and the moving average convergence divergence (MACD), indicate that momentum is improving, but the bullish trend still needs to be confirmed. Resistance at 107.56 (75-day moving average) and 108.00 (market psychological level) will be the next key upside hurdles. , while support at 107.00 (round number) and 100-day simple moving average at 106.76 will prevent a reversal.

Consider shorting the US dollar index around 107.40 today, stop loss: 107.55, target: 106.95, 106.85

WTI spot crude oil

WTI crude oil prices remain above the two-month low of $68.29 set on February 26, and are currently hovering around just below $70.00 per barrel during European trading hours on Thursday. Oil prices fell to a two-month low on Tuesday, as an unexpected increase in U.S. refined product inventories suggested weak demand, and a possible peace agreement between Russia and Ukraine continued to put pressure on oil prices. Data from the U.S. Energy Information Administration (EIA) showed that gasoline and distillate inventories unexpectedly increased in the U.S. last week, while crude oil inventories unexpectedly fell due to increased refining activities. The market saw a knee-jerk reaction and fell in response. This was a bit unexpected because the decline in crude oil inventories was very large. The prospects of a peace agreement between Russia and Ukraine are improving, and the market is also paying attention to the impact of the mineral agreement reached between the United States and Ukraine. This will bring sanctions on Russia one step closer and remove most of the supply uncertainty hanging over the market.

Negative fundamentals continue to affect market sentiment and put pressure on oil prices. Concerns about the global economy and declining demand have erupted again, and oil prices fell nearly 3% at one point this week. The continued decline below the support levels of $70 (market psychological level), and $69.76 (76.4% Fibonacci retracement of 66.80 to 79.37) further confirmed the bearish stance and may fall to $68.50 (December 23 low last year), and fall to $66.80 (December 2024 low). On the other hand, once the $70 area is broken, the first resistance is at the 9-day moving average of $71.15 and $71.47 (Friday's high), and the 200-day moving average of $73.34.

Today, consider going long on crude oil around 69.70, stop loss: 69.50; target: 71.00; 71.20

Spot gold

Gold prices have faced a drop of more than 1.40% before the US trading session on Thursday. The stock fell after US President Trump expressed doubts and confusion about which taxes will be imposed, when and on which countries during a cabinet meeting on Wednesday. Trade tensions and economic uncertainty continue to drive demand for safe-haven assets such as gold during the early Asian session on Thursday. Late Wednesday, US President Trump reiterated his insistence on 25% tariffs on Canada and Mexico and added the European Union to the mixed list of countries he will punish US consumers for imports. Uncertainty about tariffs could drive safe-haven inflows, benefiting precious metals. On the other hand, Trump's plan to raise tariffs has raised inflation concerns at the Federal Reserve, which could convince the U.S. central bank to keep interest rates higher for longer. This in turn could limit the upside for precious metals, as higher interest rates would weaken the appeal of non-yielding gold.

Gold prices rebounded slightly midweek. Although the price action appears to be stable and consolidating, the risk of more downside remains. The 14-day relative strength index indicator, a technical indicator in the daily chart, has further room to fall, so the gold market plunged again yesterday by more than 1.40% to below the psychological level of $2,900. Looking up, the first level to recover is the 2,900 mark. If U.S. yields fall further and gold can find support, the 9-day moving average of $2,927 and the 25-day resistance of this month of $2,953.80 are the best levels to move up. On the other hand, a return to Thursday's low of $2,867.50 and $2,8767.00 (25-day moving average) is a very reasonable outcome. Further downside, watch out for $2,845 (30-day moving average), where some substantial support may emerge.

Consider going long on gold today before 2,872.00, stop loss: 2,868.00; target: 2,890.00; 2.895.00

AUD/USD

The bearish tone of the AUD/USD pair remained intact for the fifth consecutive day on Thursday, breaking below the 0.6300 support level to hit a two-week low around the 0.6240 level. The Australian dollar remained down against the US dollar. The AUD/USD pair remained slightly lower after disappointing Australian private capital expenditure data, which unexpectedly contracted by 0.2% month-on-month in the fourth quarter of 2024, below the market growth forecast of 0.8%. This followed a 1.6% increase in the previous quarter. The deputy governor of the Reserve Bank of Australia said on Thursday that he expected more positive news on inflation, but stressed the importance of seeing that progress first. He noted that the tightness of the Australian labor market remains a challenge to controlling inflation. The Australian dollar faced headwinds on Wednesday after Australia's monthly consumer price index (CPI) rose 2.5% year-on-year in January, matching December's gain but below market forecasts of 2.6% growth. The AUD/USD pair remained under pressure as risk sentiment rose following earlier statements by US President Trump.

Australia's outlook is closely tied to its commodity exports, making the economy vulnerable to any slowdown in Chinese demand. Copper and iron ore prices seemed to lose momentum midweek and pulled AUD/USD back from its recent high of 0.6409. The 14-day relative strength index (RSI) on the daily chart fell below the 50 mid-line zone (latest at 40.00). If sellers regain control of the market, initial support is at the psychological market level of 0.6200, followed by the January 17 low of 0.6164 and finally the psychological level of 0.6100. On the other hand, the immediate obstacles for AUD/USD are 0.6295 (25-day simple moving average) and 0.6300 (market psychological level). Beyond that, the next challenge is 0.6314 (Thursday high).

Consider going long AUD today until 0.6220, Stop Loss: 0.6210; Target: 0.6270; 0.6280.

GBP/USD

Led by other risk-sensitive currencies, GBP/USD is giving way to renewed buying pressure against the US dollar, trading around 1.2600 ahead of comments from Fed policymakers and President Trump. GBP/USD fell after two consecutive sessions of gains during Thursday's Asian session, trading around 1.2660. The pair fell as the US dollar strengthened amid heightened risk aversion and rising US Treasury yields. US Commerce Secretary Howard Lutnick announced on Wednesday evening that April 3 will serve as the benchmark for the reciprocal tariff data. He also said that Chinese cars will not be allowed into the United States, citing China as a major concern. Meanwhile, US Treasury Secretary Scott Besant reiterated his commitment to work with Congress to make President Trump's tax cuts permanent. Swati Dhingra, a member of the Bank of England's Monetary Policy Committee, commented on Wednesday that higher US tariffs could strengthen the dollar in the short term, leading to some price increases in the UK. However, she noted that the overall inflationary impact in the UK may be offset by the reduction in global price pressures caused by these tariffs.

GBP/USD failed to achieve a solid rise in the middle of the week, retreating from a 10-week high of 1.2715 and falling below the 110-day moving average of 1.2681. The bullish momentum has pegged the pound at recent highs. The 14-day relative strength index (RSI) of the daily chart technical indicator remains above 55, reflecting that the bullish momentum is still maintained in the near term. Once the pair re-enters the 1.2700 (round mark) and 1.2715 (this week's high) area, it is not ruled out that GBP/USD will continue to challenge the upper track of the rising channel, around the 1.2750 level. A breakout would strengthen the bullish outlook and pave the way to a three-month high of 1.2811, last seen on December 6. On the downside, GBP/USD could find immediate support at 1.2600 (market psychological level), and 1.2585 (89-day moving average), followed by 1.2563 (previous week low) levels.

Today's recommendation to go long GBP before 1.2585, stop loss: 1.2570, target: 1.2640, 1.2650

USD/JPY

USD/JPY has gained meaningful traction above 149.00, rebounding from year-to-date lows in Asian affairs on Thursday. The dollar held its rebound, offsetting the yen's strength on BoJ rate hike bets, allowing the pair to make a comeback ahead of the release of top US data. The yen edged lower against the dollar during Thursday's Asian trading session, although it remained close to its highest level since October 2024 hit earlier this week. Apart from this, concerns regarding US President Donald Trump’s tariff plans and positive risk sentiment have emerged as key factors weakening the yen. However, any meaningful yen depreciation still seems elusive against the backdrop of the market’s growing acceptance that the Bank of Japan will continue to hike interest rates this year, especially as inflation in Japan continues to rise. On the contrary, expectations that a cooling US economy will give the Fed more impetus to cut interest rates have kept US dollar bulls on the sidelines and limited the upside for USD/JPY.

From a technical perspective, USD/JPY has been moving in a familiar range since the beginning of this week. This is the recent decline after the year-to-date high of 158.88 hit in January, which may still be viewed as a bearish consolidation phase. Moreover, the oscillator on the daily chart is deeply trapped in negative territory and remains far away from the oversold zone, suggesting that the path of least resistance for the spot price remains to the downside. Therefore, any further gains may be viewed as limited around the psychological level of 150.00, and 150.06 (9-day moving average). However, a sustained strong break above this level could trigger a short-term covering rally and push USD/JPY further to the 151.04 (14-day moving average) level, which has now become a strong resistance. On the other hand, the 149.00 round number seems to protect the near-term downside ahead of the 148.57 area, which is a multi-month low. If some follow-through selling occurs, it will be seen as a new trigger for bearish traders and drag USD/JPY to the 148.00 level and then towards the next relevant support level in the 147.35-147.30 area and the 147.00 round number.

Today, we recommend shorting the US dollar before 149.98, stop loss: 150.20; target: 149.00, 148.80

EUR/USD

EUR/USD has increased in its pullback on Wednesday and has clearly retreated to just below the 1.0400 support level in response to the continued strong rebound of the US dollar amid tariff tensions and cautious personal consumption expenditures. The EUR/USD exchange rate slipped to 1.0450 during the Asian trading session on Thursday. The euro weakened due to US President Trump's threat to impose 25% tariffs on the European Union. In the middle of the week, US President Trump reiterated his insistence on 25% tariffs on Canada and Mexico and added the European Union to the list of countries he will punish US consumers with tariffs for imports. The EU vowed to respond "firmly and immediately" to "unjustified" trade barriers, indicating that it is ready to retaliate quickly against new tariffs. Trump's tariff threats may exacerbate the economic slowdown in the eurozone and may cause the euro to fall further against the US dollar. Across the ocean, concerns about US economic growth have increased market expectations that the Federal Reserve will cut interest rates at least twice this year, weakening the dollar.

From the daily chart, although the 14-day relative strength index (RSI) of the technical indicator has a technical correction and is below 50 (the latest is around 47.00), it shows that EUR/USD still has the momentum to rise further in the future. The additional gains of EUR/USD are expected to encounter the next resistance in the 1.0528 (Wednesday's high) and 1.0532 (January 27's high for the year) area, followed by the 110-day simple moving average of 1.0567. Further upside is the psychological barrier of 1.0600, followed by the high of 1.0629 in December 2024. On the other hand, the initial support level can be considered at 1.0373 (February 13 low), followed by 1.0300 (round mark) level.

Today it is recommended to go long on Euro before 1.0385, stop loss: 1.0372, target: 1.0430, 1.0440.

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