US Dollar Index

After four weeks of continuous declines, the US dollar index closed up to around 99.50 last week, ushering in its first weekly rise since mid-March, but below the key resistance level of 100. Earlier, President Trump reiterated that trade negotiations with China were still ongoing despite Beijing's denials. The dollar received additional support from signs of progress in trade negotiations with Japan and South Korea. Elsewhere, Trump softened his stance on Federal Reserve Chairman Powell, saying he never intended to replace him, a move that helped ease investor uncertainty about the central bank's leadership. At the same time, China is also reportedly considering removing its 125% tariff on certain US goods, raising hopes for further easing of the trade war. On the other hand, Cleveland Fed President Beth Hammack said that if economic data supports it, interest rates could be cut as early as June, a comment that briefly put pressure on the dollar, but then rebounded on trade optimism. In the foreign exchange market, in addition to Trump's 100th day rally next week, the Bank of Japan will release its interest rate decision on Thursday and the European Central Bank will release its economic bulletin on Friday, and Canada will hold a federal election next Monday.

The US dollar index rebounded sharply from a three-year low of 97.91 to around 99.94 last week, but the upward momentum was capped by the 100.00 {market psychological resistance}, and 100.04 {14-day simple moving average} areas. The short-term rebound is on a solid footing, but the technical indicators on the daily chart remain fragile. The 14-day relative strength index (RSI) is 37.64, and the moving average convergence/divergence (MACD) shows that the upward momentum is fading. Although the MACD continues to send a sell signal, the average directional index (ADX) is 54.53, indicating a strong but weak trend. The short-term simple moving averages reinforce the bearish stance. Both the 14-day {100.04}, and 20-day {101.05} simple moving averages are above the current price level. Immediate support is at 99.22{5-day simple moving average}, and 99.00{round mark} area, breaking down will test 98.00 mark, and 97.91{three-year low} level. As for the upside, the first resistance area is 99.94{last week's high}, and 100.00{market psychological mark}. Additional resistance is at 100.70{April 10 low} and 101.05{20-day simple moving average}. Unless the headlines provide clearer direction, especially in terms of tariffs or central bank actions, the US dollar index may remain range-bound between 99.00 and 100.00.

Today, consider shorting the US dollar index around 99.72, stop loss: 99.85, target: 99.25, 99.10

WTI spot crude oil

On Thursday (March 27), international oil prices rose slightly as market participants were evaluating the impact of tightening global crude oil supply and the latest US tariffs on the global economy and energy demand. WTI crude oil prices fluctuated narrowly in the range of $61.40 to $64.70 last week. It traded around $63.00 before the end of last week. Despite the increase in prices, prices are still expected to fall due to potential concerns about OPEC+ (Organization of Petroleum Exporting Countries and its allies) increasing production. Several OPEC+ countries are expected to advocate for a second consecutive month of accelerated production increases in June. Kazakhstan, a key member, said its main oil fields could not reduce production and would prioritize national interests when determining production levels. Meanwhile, Iranian Foreign Minister Abbas Araqchi expressed his willingness to travel to Europe to discuss Tehran's nuclear program last week. Progress in negotiations with Europe and the United States could lead to the lifting of sanctions on Iran's oil exports. A potential ceasefire and easing of sanctions could also boost Russia's oil exports, putting downward pressure on oil prices. Amid bearish sentiment, the demand outlook remains weak as U.S.-China trade tensions persist. The world's two largest oil consumers are caught in a long-term trade dispute, leading to higher business costs, lower financial forecasts, and disruptions to global supply chains, which have raised concerns about a global economic slowdown that could curb oil demand.

From the daily chart, WTI spot crude oil fluctuated narrowly in the range of $61.40 to $64.70 last week. As seen in the technical chart, MACD is breaking above the signal line, the 5-day average has also risen above the 10-day average, and the 14-day relative strength index (RSI) index, although in the negative zone {latest report 45}, is still rising in stages. It is expected that oil prices have begun to form a bottom and can make a bigger step in the rebound process. Once WTI crude oil breaks through the key 20-day simple moving average of $63.65, it sets the stage for a possible move towards last week's high of $64.70. A break above this level could open the way to $65.32 (34-day simple moving average) and potentially $66.65 (50-day simple moving average). On the other hand, the overall situation remains fragile at the moment. Trade tensions, Fed credibility issues, and developments in Iranian supply all pose potential headwinds. The market still tends to be cautiously bearish, especially if risk aversion in financial markets deepens. Current support is expected at last week's low of $61.40, the next level is $60.00 {market psychological level}, and then $59.87 {April 16 low} will become the next key support level.

Consider going long on crude oil near 62.80 today, stop loss: 62.60; target: 63.90; 64.20

Spot gold

Before the weekend, gold prices fell again to below about $3,300 an ounce, reversing an earlier rebound as market rumors that China was considering stopping tariffs on certain US imports reduced gold's safe-haven appeal. Gold prices re-traced to around $3,320 before the close. Reports that China is urging companies to identify products that qualify for its 125% tariff exemptions suggest signs of easing in the trade war. Earlier, President Trump confirmed that trade talks with China were ongoing, contradicting China's claim that no discussions were taking place. Gold has erased its previous gains. In addition, the dollar rose slightly, supported by mostly optimistic US macro data in late last week, becoming a key factor exerting downward pressure on precious metals. However, the dollar's upside appears limited as market bets on more aggressive policy easing by the Federal Reserve are rising. Combined with the geopolitical risks due to the ongoing Russian-Ukrainian war, this should provide support for safe-haven gold prices and keep short traders cautious. Therefore, it would be wise to wait for some follow-up selling before confirming the short-term top of gold prices and preparing for the continuation of the correction from $3,500 this week.

From a technical perspective, after hitting a new historical high of $3,500 at the beginning of the week, it fell sharply to $3,260, a plunge of more than $240 {-7%} in just one day. It is currently trading around $3,319. Considering that the 14-day relative strength index (RSI) on the daily chart, although it has plunged more than 15 points from the overbought zone of 77, is still comfortably above the positive zone {61.90}, a continued strong breakout should allow gold to recapture the key turning points of 3,370.00 {lower support line of the daily upward channel} and 3,371.80 {23.6% Fibonacci retracement level of 2,956.80 to 3,500.10}. The subsequent rise may extend further to the resistance level of 3,386.50 {last Wednesday's high}, after which the bulls may try to conquer the psychological level of 3,400 again and move towards the new all-time high of 3,500. On the other hand, a break below last week’s low of $3,260 may have set the stage for a slide towards $3,238.30 {14-day moving average}, and $3,228.50 {50.0% Fibonacci retracement}. A break below the latter should pave the way for a slide from the $3,500 mark or all-time high this week. Gold prices may accelerate their decline towards the $3,200.00 round mark.

Consider going long on gold before 3,315 today, stop loss: 3,310; target: 3,340; 3345

AUD/USD

Before the weekend, there were rumors that China was considering suspending its 125% tariff on certain US imports, and China’s Ministry of Finance and General Administration of Customs have not yet commented on the matter. The Australian dollar extended its gains against the US dollar and continued to fluctuate around 0.6400. However, AUD/USD faces resistance amid ongoing US-China trade tensions. Australia's close trade relationship with China makes it particularly sensitive to developments between the two economic giants. Traders continue to focus on the fluid global trade pattern. Market sentiment remained mixed following reports that the Trump administration may reduce tariffs on Chinese imports depending on the progress of potential negotiations with Beijing. China expressed its willingness to discuss, provided that the United States stops issuing new threats. In addition, Trump softened his stance on Federal Reserve Chairman Jerome Powell, saying that he never intended to replace him, a move that reassured the market and supported the US dollar. On the other hand, Westpac predicts that the Reserve Bank of Australia will cut interest rates by 25 basis points at its upcoming meeting on May 20. The Reserve Bank of Australia has adopted a data-driven approach in recent quarters, making it difficult to predict its actions after the next meeting.

AUD/USD continued to fluctuate around the 0.6400 round number before the weekend due to market rumors that China was considering suspending tariffs on US imports. The 14-day relative strength index (RSI) of the daily chart technical indicator remained slightly below 60, indicating continued upward momentum. The currency pair still maintains a bullish bias in the short term. The pair is still above the 20-day simple moving average (0.6278}, on the other hand, the 9-day {0.6381}, and 140-day {0.6359} simple moving averages formed a "golden cross" bullish pattern before the weekend, indicating that AUD/USD may further test the 0.6439 resistance level {April 22 high} this week. A clear break above this level may pave the way for a rebound towards the 200-day simple moving average of 0.6463. The next level points to 0.6500 {round mark}, and the five-month high of 0.6515 area. As for the initial support level at the 140-day simple moving average, it should currently be 0.6359, and the stronger support level is around 0.6300 {market psychological mark}. A sustained break below these levels will weaken the bullish outlook and may trigger deeper losses, which may expose the 20-day simple moving average of 0.6278.

Today, it is recommended to go long on the Australian dollar before 0.6384 , Stop Loss: 0.6370, Target: 0.6440, 0.6450

GBP/USD

Last week, the narrative in financial markets did not change, and the GBP/USD continued to advance in the momentum of the rally, pushing GBP/USD briefly above the 1.3400 level. Traders focused on US President Trump's trade policy and China's response to tariffs. Although economic data took a back seat, the deterioration of US consumer confidence and a strong UK retail sales report prevented GBP/USD from falling below 1.33. GBP/USD is mainly influenced by the dynamics of the US dollar, which are driven by the erratic tariff measures of US President Donald Trump and the optimism of unexpectedly strong US corporate earnings. Last week, the US dollar fluctuated wildly, falling nearly 1% against major rivals at the beginning of the week after Trump threatened to fire Federal Reserve Chairman Jerome Powell for failing to cut interest rates quickly, but rebounded 1.5% after Trump softened his rhetoric on China and the independence of the Federal Reserve. The US dollar continued to rise after the rebound, Bloomberg A report from citing sources said that "China is considering suspending its 125% tariffs on some U.S. imports as the economic costs of the trade war have weighed heavily on certain industries." This week, preliminary U.S. GDP data for the first quarter is likely to attract more attention as investors remain wary of the impact of President Trump's protectionist policies on the economy. The data could trigger a significant reaction in the market and the U.S. dollar is expected to trade in a volatile market. Therefore, GBP/USD traders should remain cautious heading into the mid-week U.S. GDP showdown.

GBP/USD continued its third weekly gain last week and hit a seven-month high of 1.3422. The 60-day simple moving average of 1.2855 crossed above the 200-day simple moving average of 1.2833 at the close of the daily chart, forming a "golden cross" bullish pattern, indicating a potential uptrend. However, the 14-day relative strength index (RSI) remains in the positive territory around 62.30, suggesting that the bullish bias may continue this week. The pair must close above the critical overlapping resistance range of 1.3422-1.3445 in order to extend towards the 1.3500 mark. If buying momentum strengthens above this level, a test of the February 2022 high of 1.3644 will be inevitable. Conversely, if the pair experiences a pullback, the initial test of the round number mark of 1.3200 and 1.3207 {April 3 high}, below which will open the door to the 14-day simple moving average of 1.3176.

Today, it is recommended to go long on GBP before 1.3305, stop loss: 1.3290, target: 1.3360, 1.3370

USD/JPY

The yen weakened repeatedly last week and fell to a near two-week low of just below 144. Hopes for a potential easing in the US-China trade war supported positive risk sentiment {China is considering suspending its 125% tariff on certain US imports, and China's Ministry of Finance and General Administration of Customs have not yet commented on the matter}, which in turn weakened demand for the safe-haven yen. In addition, some US dollar buying further pushed USD/JPY above the 143.00 midpoint. Meanwhile, government data showed that consumer inflation in Tokyo (Japan's capital) accelerated sharply in April, reaffirming market bets on more interest rate hikes from the Bank of Japan. On the other hand, Federal Reserve officials showed willingness for potential rate cuts. This may limit significant gains in the US dollar and help limit deeper losses in the low-yielding yen, which is a warning for USD/JPY bulls. At the same time, the divergence in policy expectations between the Bank of Japan and the Federal Reserve, coupled with hopes for a trade deal between Japan and the United States, should provide support for the low-yielding yen.

USD/JPY showed some resilience in the decline from the March high of 151.21 to the April low of 139.89, falling below 140 (market psychological level) to the 139.89 level since September last year, and then rebounded to 144.03 near last week's high, which is good for long traders. In addition, the 14-day relative strength index (RSI) of the technical indicator on the daily chart, although recovered, is still around 43 in the negative zone, and has not yet confirmed the bullish bias. Therefore, any further rise may face strong resistance near the 144.00 round number level and 144.21 (38.2% Fibonacci rebound level from 151.21 to 139.89). However, follow-up buying may push the spot price further to the 144.84{20-day moving average} area, or the 145{round mark} level, which, if decisively broken, will pave the way for a further short-term rebound to 145.55{50.0% Fibonacci rebound level}. On the other hand, a break below the 142.56{23.6% Fibonacci rebound level} level and the 142.44{9-day moving average} area may continue to attract some bargain hunting. Next is the 142.00 round mark, if broken, the currency pair may slide to around 141.50{April 23 low}.

Today, it is recommended to short the US dollar before 143.90, stop loss: 144.10; target: 142.70, 142.40

EUR/USD

The EUR/USD exchange rate soared to 1.1573 last week, the highest point since November 2021, but fell back more than 250 points to 1.1315 before the weekend, and finally closed with a mild decline of {1.1363}. The US dollar rebounded after President Trump said he had no intention of firing Federal Reserve Chairman Jerome Powell. The latest White House developments sparked panic about the future of the US economy, and the US dollar was sold off in the first half of the week. However, as time went on, concerns subsided, helping the US dollar recover its lost losses. Since April, the euro has risen by more than 5% against the US dollar, and investors have increasingly questioned the dominance of the US dollar in the global financial system and turned their attention to the common currency as an alternative. Expected increases in German defense spending also provided additional support. On the policy front, the ECB cut its deposit rate by 25 basis points to 2.25%, the lowest level since early 2023, as expected. The central bank also removed language referring to its policy stance as "restrictive," while warning that the economic outlook has deteriorated due to escalating trade tensions. The market now expects two or three more 25 basis point rate cuts before the end of the year.

EUR/USD is little changed on a daily basis, hovering at 1.1363, in line with last week's close. Despite a sharp pullback from early week highs, lower lows and highs have tilted the risk to the upside. Given that technical indicators have retreated from extremely overbought readings, a corrective bearish extension is not out of the question, although its downside strength is well limited. Meanwhile, the pair is developing above all moving averages, with the 20-day simple moving average (1.1175) maintaining its bullish slope well above the flat 100-day {1.0638} and 200-day {1.0763} simple moving averages. Buyers may have paused, but there are no signs of an imminent decline, as the 14-day relative strength index (RSI) of the technical indicator remains above 60.00, suggesting that EUR/USD may soon resume its rise. Short-term sellers are located near 1.1400, which is an immediate resistance area. Once broken, the next is the 1.1473 {April 11 high} area, followed by the yearly high of 1.1573. A clear break above the latter will extend the EUR/USD rally well beyond the 1.1600 level. On the other hand, support is near 1.1300 {round mark}, a break of which will see 1.1264 {April 15 low}, and open the door to 1.1175 {20-day moving average} for a corrective decline.

Today, it is recommended to go long on EUR before 1.1350, stop loss: 1.1335 Target: 1.1410, 1.1420.

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