US Dollar Index

Last week, the dollar fluctuated downwards, briefly rebounding above the psychological 100.00 level before retreating almost immediately, with the dollar index closing at the mid-99.45 level at the weekend. The picture is even bleaker in May, showing a fourth straight month of declines, having fallen nearly 10% since the tariff-induced peak in early February and marking the longest losing streak in five years. US trade policy dominated again over the past week, especially after US court rulings challenging the White House's trade strategy. Traders are increasingly concerned that President Trump's trade policies could harm the economy and weaken the dollar's safe-haven appeal. Before the weekend, US-China tensions escalated again as Trump accused Beijing of violating the recent trade agreement. On the data front, US consumers slowed spending in April, with inflation-adjusted personal spending rising just 0.1% compared with 0.7% in March. Core inflation rose 2.5% year-on-year, the smallest increase in four years. The weak data suggests that consumer anxiety is rising and economic growth is slowing. Data earlier this week showed that the US economy contracted in the first quarter for the first time in three years. Meanwhile, the merchandise trade deficit narrowed sharply in April as imports recorded a historic decline. On the other hand, a separate trade deal between the United States and the United Kingdom has boosted investor sentiment and given a boost to the dollar. The US-China agreement further fueled the rally, reinforcing hopes of easing global trade tensions.

From the daily chart, the US dollar index is expected to maintain its bearish bias below 100.40{upper line of the downtrend channel}, and 100.47{45-day simple moving average} this week. In addition, momentum indicators have shifted the focus to the bearish trend. The 14-day relative strength index (RSI) remains close to the 43 level, and the average directional index (ADX) is losing momentum, hovering around 23, supporting the view that the trend strength is weakening. If the bears continue to control the market, the US dollar index may retest 99.05{downward channel middle axis}, and 99.00{round mark}. After the breakout, it will further look to 98.32{low point on April 1, 2022}, and 98.22{lower line of the downward channel}. It will eventually challenge the previous low of 97.91 on April 21, 2025. If there is a chance to break through the 99.84{12-day simple moving average}, and 100.00{market psychological barrier} resistance area, the market will open the door to the 100.40{upper line of the downward channel}, and 100.47{45-day simple moving average} area level, which is the previous support turned into resistance.

Today, you can consider shorting the US dollar index around 99.60, stop loss: 99.70, target: 99.00, 98.90

WTI spot crude oil

Last week, OPEC+ members agreed to increase oil supply by 411,000 barrels per day in July, which was the third consecutive significant increase in production by the alliance, aimed at regaining market share and punishing those members that overproduced. After the video conference ended that day, OPEC+ issued a statement saying that the reason for the increase in production in July was the stable global economic outlook and the current healthy market fundamentals, which was reflected in lower oil inventories. WTI oil prices gave up gains last week and continued to fall for the third week. This was after the US Court of Appeals overturned a lower court decision to block Trump's trade tariffs. The decision brought trade uncertainty back to the table, raising doubts about global demand for oil. In addition, the market is worried about oil surpluses against the backdrop of restricted trade and a high probability of slowing global growth. On the other hand, US crude oil inventories fell by 2.8 million barrels, exceeding expectations, providing some support for seasonal demand.

As the tariff dispute continues to ferment in the court system, uncertainty will further increase. The daily chart of WTI crude oil showed that the oil price fluctuated in a narrow range between $60.00 {market psychological barrier} and $63.06 {55-day simple moving average} last week, and has fallen below the 50-day simple moving average of $62.66. The MACD fast and slow lines of the short-term technical indicators are crossing, and the 14-day relative strength index RSI is now near the 45 negative zone, indicating that the momentum is weakening. At present, the psychological barrier of $60.00 is the first support level. Once it falls below, it may test the previous low of $58.83 {23.6% Fibonacci rebound level from $71.98 to $54.78}. If OPEC+ significantly increases production and the US inventory continues to accumulate, oil prices may weaken further. The next level is around the $57.47 {May 8 low} level. If WTI oil prices rise instead of falling, and break through the $6152 {14-day simple moving average} in one fell swoop, it may rise further to $62.64 {50-day simple moving average}. Previously, the market tried to break through the higher level of $64.04 {May 21 high}, but all failed, indicating a general bearish sentiment in the market.

Today, consider shorting crude oil around 60.50, stop loss: 60.70; target: 59.20; 59.00

Spot gold

Gold prices fluctuated weak last week and tested the psychological level of $3,300 several times to a low of $3,245.50 for four consecutive trading days. It fell more than 2% last week as strong economic data offset the demand for safety due to the re-emergence of trade war risks. New data showed that US personal income grew more than expected in April, while spending and prices were in line with expectations. These results provide the Fed with leeway to keep rates on hold longer before resuming its easing cycle, as various policymakers hinted at in various speeches last week, thereby increasing the opportunity cost of holding bullion. Late last week, gold surged nearly 1% from a near two-week low of $2,445.50 to $3,331 after a U.S. federal appeals court allowed President Trump’s massive tariffs to temporarily take effect. The U.S. Court of International Trade had previously blocked their implementation by ruling that the method of implementing those tariffs was “illegal.” Separately, a federal appeals court suspended a separate trade court ruling last week and reinstated U.S. President Trump’s tariffs, adding a layer of uncertainty to the market and weighing on investor sentiment. Beyond that, geopolitical risks stemming from the ongoing Russia-Ukraine war and conflict in the Middle East also provided some support for safe-haven gold prices.

From a technical perspective, gold prices challenged the upper line of the daily "equilateral triangle" near the $3,325 level late last week, but the rise was capped by the $3,350.00 level {May 27 high} and the subsequent break below $3,300 {market psychological level}, which is a sign of bullishness for gold price bears. In addition, the oscillators of technical indicators have started to gain negative momentum again, supporting the case for further intraday depreciation of gold prices. Therefore, subsequent weakness towards the $3,278.20 {14-day simple moving average} support, along the way approaching the $3,250.50 {equilateral triangle lower line}, and the last Thursday's low of $3,245.50, seems to be a distinct possibility. A successful breakout of the latter should pave the way for deeper losses and expose $3,228.40 {50% Fibonacci retracement of 2956.70 to 3500.10}, as well as $3,228.00 {50-day simple moving average} area levels. On the other hand, $3,325-3,326 may continue to serve as an immediate barrier at $3,350, and a strong breakout of $3,350 may negate the negative outlook and trigger a new short-term covering move, which will allow gold to recapture the $3,371.80 {23.6% Fibonacci retracement} barrier. Momentum may further extend to the next relevant resistance level near the round number level of $3,400.

Consider going long on gold before 3,285 today, stop loss: 3,280; target: 3,318; 3,224

AUD/USD

The Australian dollar fell about 1.0% against the US dollar to around 0.6430 last week, giving up some of the gains of the previous trading week. At the beginning of the week, AUD/USD fell sharply from 0.6537, the high since November last year, to 0.6407, the low of the week, indicating that the bullish bias may be weakening. Meanwhile, the pair remained sluggish due to disappointing economic data released by Australia. Australia's seasonally adjusted retail sales fell 0.1% month-on-month in April, contrary to expectations of a 0.3% increase. Meanwhile, building permits fell 5.7% month-on-month, compared with expectations of a 3.1% increase. On the other hand, AUD/USD came under downward pressure after a three-judge panel of the International Trade Court suspended US President Trump's "Liberation Day" tariffs. A federal court found that Trump exceeded his authority in imposing broad import tariffs and declared the executive order issued on April 2 illegal. However, the U.S. Court of Appeals for the Federal Circuit in Washington temporarily allowed Trump's tariffs to take effect on Thursday.

Last week, the AUD/USD pair moved lower and lower, falling sharply from the November high of 0.6537 at the beginning of last week to the weekly low of 0.6407, indicating that the bullish bias may weaken. The 14-day relative strength index (RSI) of the technical indicator on the daily chart is slightly above 50, indicating that the bullish bias is still active. Analysis shows that the AUD/USD is currently hovering around the lower line of the "sideways channel" at 0.6415. As the pair is still below the 9-day simple moving average of 0.6443, the short-term price momentum has weakened. On the downside, if it falls below the lower line of the sideways channel at 0.6415 and the 0.6400{round mark} area, the AUD/USD pair may test the 50-day simple moving average of 0.6356. A break below this level could weaken medium-term price momentum and exert downward pressure on the pair to the 0.6300 {market psychological barrier} level. On the other hand, once the AUD/USD retests the 9-day simple moving average of 0.6445, it will then look to 0.6485 {horizontal channel central axis}, and the round number of 0.6500. A breakout of this key resistance range could restore the bullish bias and support the pair to target the seven-month high of 0.6581 on November 12, 2024, and the 0.6600 {round number} area level.

Today, it is recommended to go long on the Australian dollar before 0.6416, stop loss: 0.6400, target: 0.6470, 0.6480

GBP/USD

Last week, after the pound sterling against the US dollar hit a high of $1.3593, the highest since February 2022, at the beginning of the week, the currency pair repeatedly made technical adjustments downward to 1.3450. Investors are assessing growth and trade developments. Weak U.S. economic data, including a first-quarter contraction and rising unemployment claims, reinforced market expectations for two Fed rate cuts in early 2026. Market focus also turned to a U.S. court ruling that blocked many of President Trump's tariffs, bringing new uncertainty to trade policy. Meanwhile, the British government proposed new rules requiring pension funds to invest more in private markets and local projects, aiming to achieve £27.5 billion of new investments. The plan includes the integration of £1.3 trillion of pension assets, but has been resisted by fund managers who warn that it may conflict with their duty to prioritize client interests. In addition, market expectations for a dovish policy expansion cycle by the Bank of England and trade agreements with Washington, Delhi and Brussels have helped strengthen the pound.

From the recent trend, the pound is consolidating after pushing to 1.3593, a high since February 2024, at the beginning of the week, and the short-term trend remains bullish. The 14-day relative strength index (RSI), a technical indicator on the daily chart, is now around 58, indicating that the upward momentum is also bullish, leaving ample room for further gains. On the upside, 1.3560 (the central axis of the ascending channel) can be seen as the first resistance level. After breaking through, it will challenge the high of 1.3593 at the beginning of last week again, and 1.3600 (round mark). The final target will point to the high of 1.3750 on January 13, 2022, which will be the key obstacle for the currency pair. GBP/USD maintained the immediate key horizontal support drawn from the weekly low of 1.3415 and the low of 1.3416 (14-day simple moving average) last week. If the currency pair continues to fall, the bears will test the 1.3400 round mark and further down to test 1.3348 (34-day simple moving average), and then open the door to 1.3300 (market psychological barrier).

Today, we suggest going long on GBP before 1.3448, stop loss: 1.3435, target: 1.3500, 1.3510。

USD/JPY

USD/JPY fluctuated last week, rebounding from a low of 142.11 at the beginning of the week to a weekly high of 146.30, before the pair eased again to around 144.00 in late last week. The market is increasingly accepting that the Bank of Japan will continue to raise interest rates. The market expects a 25 basis point rate hike in July. Bank of Japan Governor Kazuo Ueda pointed out that the central bank's recent downward revision of its inflation forecasts included multiple factors, such as the increase in global growth risks caused by trade policy uncertainty, the slowdown in cost-push inflation, and the sharp drop in crude oil prices. However, he stressed that the revised outlook will not affect the central bank's short-term interest rate decisions, which are still aimed at achieving its 2% inflation target. This bet was confirmed by strong macro data released by Japan, including Tokyo consumer inflation data released today. In addition to this, continued trade-related uncertainty has stimulated safe-haven demand, becoming another factor supporting the yen. In fact, global risk sentiment was hit after the federal appeals court on Thursday suspended the latest decision to block US President Trump's extensive trade tariffs. This also supported the safe-haven demand for the yen.

From a technical perspective, the overnight failure at 146.16 near the 61.8% {Fibonacci retracement level from 148.65 to 142.11} of the recent decline from the monthly high of 148.65 and the subsequent decline favors the USD/JPY bears. Moreover, the 14-day relative strength index (RSI) on the daily chart fell to 47.50, validating the short-term negative outlook for the USD/JPY exchange rate and indicating that the path of least resistance for the spot price is to the downside. Sustained selling below the 143.66 {23.6% Fibonacci retracement level} area will reaffirm the bearish outlook and drag the pair to the 143.00 round number level. The downside trajectory may further extend to the 142.11 area {monthly low hit last Tuesday}, and 142.00 {market psychological level}. On the other hand, 144.62 {38.2% Fibonacci rebound} now seems to be an immediate barrier, and if it breaks through this area, USD/JPY may target the psychological level of 145.00. A sustained strong break above the latter will pave the way for a move towards the next relevant barrier of 145.99 {65-day simple moving average}, and the 146.00 round number level.

Today, it is recommended to short the US dollar before 144.30, stop loss: 144.50; target: 143.00, 142.80

EUR/USD

The euro fell slightly in the last trading week of May, consolidating near $1.1350, which is the same as last month. While investors weighed a series of economic data from Europe's largest economy, they also focused on the news that the US appeals court temporarily suspended the trade tariff blockade of former President Trump. In Germany, retail sales fell by 1.1% in April, the first decline in four months and also lower than the market's expectations of a 0.2% increase. Meanwhile, inflationary pressures in Spain and France eased, reinforcing market expectations that the ECB will cut rates again for a quarter at its meeting next week. Spain's inflation rate fell to 1.9%, the lowest since October last year, below expectations of 2.1%. France's inflation slowed more sharply, falling to 0.7%, the lowest since February 2021, also below market expectations of 0.9%. On the other hand, investor concerns about volatile trade policies, coupled with growing concerns about US fiscal stability, exacerbated by a tax cut bill that is expected to add trillions to the already high US debt, have boosted the "sell US" trade and weakened the dollar over the past two months.

EUR/USD fluctuated widely in the 1.1210 to 1.1420 range last week, with the 14-day relative strength index (RSI) indicator on the daily chart above 55.80, indicating a bullish short-term outlook for the pair, which is a positive sign. But further appreciation confirmation is needed on the lower support line of the weekly chart "upward channel" at 1.1390 ​​(now turned into resistance), and also above last week's high of 1.1420. If the breakthrough of these two levels is confirmed, the focus will turn to the high of April 4, close to 1.1475. A break will point to 1.1574 (April 18 high). On the contrary, failure to break through the 1.1390-1.1420 resistance area may allow bears to regain control and increase pressure on the support area of ​​1.1228 and 1.1200 (round mark), followed by the 1.1135 (May 16 low) and 1.1135 (60-day simple moving line) area levels.

Today, it is recommended to go long on the euro before 1.1335, stop loss: 1.1320 target: 1.1390, 1.1400

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