US Dollar Index

The US dollar index extended its losing streak on Thursday as new labor market and trade data put additional pressure on the greenback. Layoffs rose sharply, while weekly jobless claims showed a mixed picture for the labor market. Meanwhile, the European Central Bank announced its much-anticipated rate cut, with President Christine Lagarde stressing the need for vigilance amid an uncertain economic situation. The dollar index briefly fell below 104.00 during European trading on Thursday. Risk sentiment improved as the dollar index extended its fourth straight day of declines amid another shift in President Trump's tariff strategy. With the market's eyes focused on the U.S. February non-farm payrolls data to be released on Friday, the dollar bulls and bears entered a cautious game. The dollar index fell to a five-month low of 103.75. Investors are now pricing in the possibility of a full-blown contraction in the U.S. economy, with a 42% chance of a recession this year. The market is experiencing a shift in sentiment in terms of its reliance on the U.S. market.

In the daily chart, the US dollar index is currently quoted slightly above 104.00, running close to the long-term 350-day simple moving average of 104.59. The short-term 9-day and 20-day moving averages have moved down to 106.12 and 106.76 respectively, forming a short position. The price has rebounded since hitting the annual low of 105.55 on March 4, but failed to break through the 9-day moving average resistance, indicating that the bulls lack the momentum to counterattack. If the US dollar index loses 104.00 (market psychological level), the downside will extend to 103.34 (the low of November 6 last year), and 103.00 (integer level); on the contrary, if it holds 104.00 and rebounds, it may form a double bottom pattern. A rebound needs to break through 104.59 (350-day moving average) to reverse the decline to 105.00 (round mark), and 105.17 (50.0% Fibonacci retracement of 100.16 to 110.18) area levels.

Today, consider shorting the US dollar index around 104.20, stop loss: 104.35, target: 103.80, 103.70

WTI spot crude oil

WTI crude oil prices fell for the fifth consecutive day, trading below $66.00 per barrel during the European trading session on Thursday. However, crude oil received some support after a US official said Trump may consider removing the 10% tariff on Canadian energy imports that meet the trade agreement. U.S. crude oil traded just above $66.00 a barrel. Oil prices fell for the fifth consecutive trading day on Wednesday after a larger-than-expected increase in U.S. crude inventories added to resistance as investors were already worried about OPEC+'s plan to increase production in April and U.S. tariffs on Canada and Mexico. Oil prices fell for the fourth consecutive trading day in the middle of the week. Oil prices narrowed their losses after hitting multi-year lows. Brent crude oil hit $68.33, the lowest since December 2021; U.S. crude oil hit $65.00, the lowest since May 2023. Spot WTI traded below $67 a barrel, but forward prices were weaker. The price in 2026 is about $63 a barrel, reducing the incentive for producers to increase drilling activities. If anything, we may see a larger pullback in activity.

From the daily chart pattern, WTI crude oil prices have formed a clear downward trend. Not only has it fallen below multiple important moving averages, but it is also testing the $64.75 {low last September 10} level. It is worth noting that the recent oil price has fallen sharply from the high of $79.37 in early January this year, with a cumulative decline of more than 15%, indicating that the market is bearish. In terms of the MACD indicator of technical indicators, DIFF (-1.10) and DEA (-0.84) are both below the zero axis, and the bar chart is green and has an expanding trend, indicating that the downward momentum is still accumulating. The RSI indicator has dropped to around 31, close to the oversold area but no obvious bottom divergence signal has appeared. This pattern indicates that crude oil may continue to be under pressure in the short term. If the current crude oil price falls below the $66.00-65.80 area, it will directly point to the $64.75 level {last September 10 low}. The upper resistance first comes from the $67.67 (5-day moving average), followed by the $68.28 (Tuesday high) area. Only by standing above $70.00 (market psychological barrier) can the current bearish pattern be changed.

Consider going long on crude oil near 66.00 today, stop loss: 65.80; target: 67.50; 67.70

Spot Gold

Gold prices retreated slightly to around $2,900 on Thursday, although a new all-time high of $2,956 is still possible. Although Canada and Mexico may have some relief due to the delay of tariffs on US auto imports, the reciprocal tariffs are still scheduled to take effect in April. This still supports safe-haven inflows, which is positive for precious metals. Concerns about the trade war have kept prices above the key level of $2,900 per ounce; spot gold fell midweek despite a weaker dollar, with investors reluctant to make large bets ahead of the US employment report later this week. There is still buying interest in the market now, and there will be a degree of caution in the market before the release of the (non-farm payrolls) on Friday, but the basic trend remains favorable. Concerns about U.S. President Donald Trump’s tariffs have pushed safe-haven gold to 11 new record highs this year, with the new record being $2,956.30 set on February 24, bringing the overall gain to 11% so far this year.

Midweek, gold prices stalled after two consecutive bullish days. However, momentum turned upward, with the 14-day relative strength index (RSI), a technical indicator on the daily chart, rising in the bullish zone (latest around 58.90). That said, the path of least resistance for gold is to continue rising. The next resistance for gold is $2,936.00 (February 18 high), followed by the all-time record high of $2,956.30. A break above the latter could expose the $3,000.00 mark. On the other hand, a daily close below $2,900 (a psychological mark in the market) could put the uptrend at risk and open the door for a “healthy” correction. That said, the first support for gold will be the 30-day simple moving average at $2,873.00, followed by the $2,857.50 (34-day simple moving average) barrier level.

Consider going long on gold before 2,912.00 today, stop loss: 2,908.00; target: 2,932.00; 2.935.00

AUD/USD

AUD/USD rose to a multi-day high near 0.6365, extending its solid weekly recovery on the back of further USD weakness and ongoing concerns over the US tariff decision. The Australian dollar remained stable for the fourth consecutive day on Thursday. However, AUD/USD gained ground as the US dollar remained subdued amid improved risk sentiment, following another change in US President Trump's tariff strategy. Australia's trade surplus rose to $56.2 million in January. Exports rose 1.3% month-on-month to an 11-month high, driven mainly by non-monetary gold. Meanwhile, imports fell 0.3% month-on-month after a sharp 5.9% increase in the previous month, according to data from the Australian Bureau of Statistics. Meanwhile, geopolitical tensions remain a concern. A Chinese Foreign Ministry spokesperson said late on Wednesday that China is ready to respond to President Trump's escalating trade tariffs, the BBC reported. This could weigh on the Australian dollar as China is Australia's largest trading partner.

AUD/USD traded close to 0.6330 on Thursday, and technical analysis on the daily chart shows an upward move within a newly formed ascending channel pattern, indicating a bullish bias. The 14-day relative strength index (RSI) remains above 50, further supporting the bullish outlook. On the upside, first resistance is seen at 0.6370 (100-day moving average), and the upper line of the ascending channel, around 0.6380, followed by the three-month high of 0.6409 set on February 21, and the round number of 0.6400. Immediate support is at 0.6300 (market psychological level), followed by the 5-day moving average at 0.6270. Additional support is at 0.6200 (round mark). If it falls below this level, it may fall further to the four-week low of 0.6187 area set on March 5.

Today, you can consider going long on the Australian dollar before 0.6325, stop loss: 0.6310; target: 0.6370; 0.6380.

GBP/USD

The GBP/USD pair traded below 1.2900, almost unaffected by the US employment-related data. Market participants remained cautious amid the uncertainty of the trade war. The US dollar corrected its extremely oversold condition and remained weak. In the European session on Thursday, GBP/USD retreated slightly after three consecutive days of gains, trading around the near-month high of 1.2925. The US dollar came under pressure due to lower-than-expected US private employment data, which raised concerns about the slowdown in the US economic momentum. In addition, the improvement in risk sentiment also exerted downward pressure on the US dollar, mainly due to another change in US President Trump's tariff policy. The British pound remained cautiously trading against its peers on Thursday, despite BoE officials reiterating a "gradual and cautious" approach to policy easing in testimony to the Treasury on Wednesday. Meanwhile, BoE policymaker Megan Green stressed the importance of cautious and gradual monetary policy easing while testifying before the Treasury Committee. Green said that "the persistence of inflation is likely to weaken itself," while reiterating that monetary policy may need to remain tight.

GBP/USD's mid-week gains of more than 100 pips have taken the pair well above the 200-day moving average at 1.2786. The pair may be ready for a new medium-term bull run, with first upside targets at 1.2924 (61.8% Fibonacci rebound from 1.3434 to 1.2099), and 1.2925 (yesterday's high), followed by 1.3000 (round mark). However, a slight weakness may occur in the short term as the technical indicator 14-day relative strength index (RSI) continues to send overbought signals. GBP/USD has risen 6.62% since the low of 1.2099 in mid-January. However, nearly a quarter of the gains have been achieved in the past three days. Since the beginning of this week, GBP/USD has risen by more than 323 points, so it is not ruled out that GBP/USD will first pull back to 1.2844 (78.6% Fibonacci rebound from 1.3044 to 1.2099), and the 1.2850 mark support area, and then the 1.2800 level (market psychological mark) before the rise.

Today, it is recommended to go long on GBP before 1.2880, stop loss: 1.2865, target: 1.2925, 1.2935

USD/JPY

On Thursday, USD/JPY hit a multi-month low of 147.32 in the European session. Concerns that US President Trump may impose new tariffs on Japan, coupled with a good rebound in US Treasury yields and overall positive risk sentiment, weakened the safe-haven yen. However, the growing acceptance of further rate hikes from the Bank of Japan could deter yen bears from making aggressive bets. Meanwhile, hawkish BoJ expectations continue to push Japanese government bond yields higher. In contrast, U.S. Treasury yields are near their lowest levels of the year as markets bet that Trump's trade tariffs could lead to a sharp slowdown in U.S. economic growth and force the Federal Reserve to cut interest rates multiple times through 2025. The narrowing of the U.S.-Japan yield gap further limits the yen's depreciation and weighs on the USD/JPY pair amid a weaker dollar.

From a technical perspective, USD/JPY has been moving in a familiar range over the past two weeks or so. This can still be considered a bearish consolidation phase against the backdrop of a sharp decline from around 158.88, or the year's high hit in January. Moreover, oscillators on the daily chart are deeply trapped in negative territory and are still far from entering oversold territory. This in turn suggests that the path of least resistance for spot prices remains to the downside and supports the prospect of a deeper decline. Therefore, a slide back to multi-month lows around 147.50 seems a distinct possibility. Some follow-up selling will be seen as a new trigger for bearish traders, exposing USD/JPY to accelerated declines towards the 147.35 area, and thus towards the 147.00 round mark, and 145.95 (last October 4 low). On the other hand, the 148.00-148.50 area now seems to act as an immediate resistance ahead of the 149.75 area and the 150.00 psychological mark. If the latter is broken through with sustained strength, any further gains may be seen as selling opportunities around the 151.00 round mark.

Today's recommendation to short USD before 148.00, stop loss: 148.30; target: 147.00, 146.90

EUR/USD

EUR/USD rose further to near 1.0853 during Thursday’s North American session following the European Central Bank’s (ECB) monetary policy decision. The ECB cut its deposit facility rate by 25 basis points, the fifth consecutive cut to 2.5%, in line with expectations. The main refinancing operation rate was also cut by 25 basis points to 2.65%, as expected. Following the policy decision, the ECB said inflation continued to evolve in the direction staff “expected” and the latest forecasts were closely aligned with the previous inflation outlook. ECB staff expect core inflation, which excludes volatile food and energy prices, to average 2.2% in 2025, 2.0% in 2026 and 1.9% in 2027. ECB President Christine Lagarde said in a press conference that the rationale for the dovish rate decision was to support economic stability. Lagarde warned that risks to growth remain skewed “to the downside”. She noted that trade tensions could further weigh on “growth” due to the tariff war led by U.S. President Donald Trump.

The mid-week rebound in EUR/USD has resulted in the pair’s best day in years, with a 185-pip rally that pushed past the 1.0800 mark, a price level not seen since early November 2024. EUR/USD broke through the key 200-day moving average of 1.0721 during the session. EUR/USD has gained 4.50% in three days, pushing it to a 17-week high of 1.0853, with the pair trending unilaterally this week. However, bulls may be caught out: the 14-day relative strength index (RSI) indicator, a technical indicator on the daily chart, remains above 70, reflecting a bullish stance, but in overbought territory. A downward pullback could drag buying back to the 200-day moving average of 1.0721 and the round number of 1.0700 to start a new round of bullish activity. As for the upward resistance, the integer level of 1.0800 and 1.0817 (61.8% Fibonacci rebound level from 1.1214 to 1.0177) are waiting, and the next level is the integer level of 1.0900.

Today, it is recommended to go long on the euro before 1.0783, stop loss: 1.0770, target: 1.0830, 1.0840.

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