US Dollar Index (DXY)

On Monday, the US Dollar Index held above the 102 level following four consecutive weeks of gains, as investors cautiously awaited key inflation data due this week for fresh signals regarding the Federal Reserve's next policy moves. The Consumer Price Index (CPI) and Producer Price Index (PPI) for September are scheduled for release on Wednesday and Thursday, respectively. Inflation data exceeding expectations could exacerbate the recent bond sell-off by intensifying pressure on the Fed to adopt a more aggressive tightening path. Currently, markets price in an approximately 83% probability that the Fed will keep interest rates unchanged this month, while the likelihood of a rate hike in December stands at around 86%. Meanwhile, oil prices fell as markets anticipated that Russian diesel supplies would alleviate global fuel shortages and reduce inflation risks; former President Trump stated that Moscow had agreed to supply diesel to global markets and claimed that Russia and Ukraine had agreed to an "energy ceasefire" effective immediately.

Overall, the US dollar faces multiple tests during this data-heavy week. The divergence between US Treasury yields and the dollar's trajectory reveals that the primary driver of the dollar's current strength is euro weakness rather than expectations of US rate hikes. While the upcoming CPI data will likely amplify short-term volatility, it is unlikely to trigger a sustained, one-sided trend on its own. Investors need to monitor two fronts: US economic data—such as inflation and retail sales—and risks in the European sovereign debt market. Developments in these areas will collectively determine whether the US Dollar Index can achieve an upside breakout. A stronger-than-expected CPI report could reinforce expectations for another rate hike in December, potentially pushing the index past the 102.51 level (last week's high) and toward the 103 mark. Conversely, if inflation data comes in soft, the dollar might retreat—following its recent rally—due to profit-taking, potentially testing the 102.03 (9-day moving average) and 101.73 (14-day moving average) levels. However, the combination of policy divergence, a resurgence in speculative demand, and a cautious global backdrop suggests that any pullback in the dollar is more likely to attract buying interest than signal a sustained reversal. Consider shorting the US Dollar Index at 102.70 today; stop-loss: 102.80; targets: 102.20, 102.10.

AUD/USD

During the Asian session on Monday (October 12), the AUD/USD pair traded sideways, hovering near 0.6970 with little change for the day. Two key data releases this week may provide guidance on the Australian dollar's next direction. Focus in Australia is centered on two datasets that will shape expectations for the Reserve Bank of Australia's (RBA) future policy: the minutes from the September policy meeting (due Tuesday) and the September labor force survey (due Thursday). Regarding the RBA minutes, a dovish tone would support pricing in a pause and weigh on the currency, while a hawkish tone would reinforce expectations for further tightening; as for the employment data, an unexpected rise in the unemployment rate would heighten market concerns regarding downside growth risks. The combination of the minutes and the employment data will determine the short-term direction of the Australian dollar.

On the daily chart, AUD/USD is trading at 0.6975, maintaining a short-term bearish bias, as the spot price remains below the 200-day simple moving average (SMA) of 0.7035 and other key trend indicators, including the 100-day SMA (0.7053) and the 55-day SMA (0.7080). The price is currently just above the 78.6% Fibonacci retracement level of 0.6945, indicating a fragile attempt to stabilize near this support; meanwhile, the 14-day Relative Strength Index (RSI) at 35.1 is nearing oversold territory, while the Average Directional Index (ADX) at 40.2 suggests the current downward trend is relatively strong. On the downside, immediate support lies at the 78.6% retracement level of 0.6945, followed by the 0.6900 level and the 0.6865 area. On the upside, initial resistance appears at the 61.8% Fibonacci retracement level of 0.7008, followed by the 200-day simple moving average (SMA) at 0.7035, the 50% retracement level at 0.7052, and the 100-day SMA at 0.7053; a denser resistance zone lies near 0.7079–0.7096.

Consider going long on the AUD at 0.6947 today; stop-loss: 0.6937; targets: 0.6980, 0.7000.

GBP/USD

A retreat in US Treasury yields from multi-year highs has dampened bullish momentum for the US dollar, allowing GBP/USD to rebound for a third consecutive trading session; the pair traded around 1.3210 on Monday. UK Chancellor Healey’s reiterated commitment to strict fiscal discipline, combined with hawkish signals from several Bank of England officials, provided a floor for the pound. However, geopolitical tensions in the Middle East continue to sustain safe-haven demand for the dollar, and a decisive directional breakout awaits key catalysts this week, including UK GDP data, US CPI figures, and speeches by Bank of England Governor Bailey and Federal Reserve Chair Warsh. The exchange rate remains confined within the narrow trading range established over the past three weeks, with neither bulls nor bears demonstrating the decisive force needed to break the equilibrium. Trading was relatively subdued—US markets were closed for the Columbus Day holiday, and reduced liquidity amplified uncertainty regarding price volatility.

From a technical perspective, GBP/USD maintains a bearish bias on the daily chart; the pair continues to trade below the 20-day SMA (1.3281) and the 30-day SMA (1.3361), indicating that the medium-to-short-term trend has not yet reversed. The 14-day Relative Strength Index (RSI) stands at approximately 40.45, below the neutral level of 50, indicating that sellers retain the upper hand; however, the indicator has not yet entered typical oversold territory, suggesting that while downward pressure persists, it has not reached extreme levels. Overhead resistance lies near the 20-day (1.3281) and 30-day (1.3361) Simple Moving Averages (SMAs). Until the exchange rate firmly re-establishes itself above the 20-day SMA (1.3281), any rebound is best viewed as a correction within a weak trend rather than a trend reversal. On the downside, attention should first focus on support at the 1.3200 psychological level; a break below this could lead to a retest of the lower bound of the range near 1.3140, while a decisive breach of this support would signal the risk of a deeper pullback.

Consider going long on GBP at 1.3200 today; Stop-loss: 1.3190; Targets: 1.3250, 1.3260.

USD/JPY

On Monday, the yen hovered around 158.60 against the US dollar. Trading activity is expected to remain subdued due to a national holiday in Japan and a bank holiday in the US. Nevertheless, traders remain cautious as the yen lingers near the critical 160 level—a threshold that previously triggered intervention by Tokyo to prop up the currency. A significant interest rate differential between the US and Japan, combined with Japan's relatively low domestic borrowing costs and heavy debt burden, continues to weigh on the yen. Meanwhile, market uncertainty persists regarding whether the Bank of Japan will raise interest rates again this month, though expectations remain for potential action in December or January. Bank of Japan Governor Kazuo Ueda noted that rapid monetary policy tightening following the pandemic-era supply chain disruptions and strong demand recovery was more common in North America and Europe. On the daily chart, the USD/JPY exchange rate is trading above the 20-day Simple Moving Average (SMA) at 157.50. Volatility has subsided, and the pair is clearly oscillating at high levels; the 20-day SMA acts as key dynamic support, and medium-term moving averages remain in a bullish alignment, indicating the broader trend has not yet turned bearish. The 14-day RSI holds near 56.88—below the overbought threshold of 70—but the upward slope has flattened, raising the risk of a bearish divergence at these highs. The MACD remains above the zero line, but the bullish histogram bars are narrowing and the signal lines are converging, suggesting waning bullish momentum and insufficient drive for a sustained rally. Key overhead resistance lies at 159.00 (a previous swing high), where selling pressure is concentrated; this level is also near the zone sensitive to potential intervention by Japanese authorities, making a clean breakout difficult. A dense resistance zone exists between the 100-day SMA (approx. 159.51) and the upper Bollinger Band (approx. 159.30), where previous rebounds have stalled. On the downside, the initial focus is the 20-day SMA at 157.50; a decisive break below this level would open the door for further retracement, with the next support target at the 157.00 psychological level.

Consider shorting USD/JPY at 158.80 today; Stop Loss: 158.95; Targets: 158.00, 157.90.

EUR/USD

EUR/USD traded within a range near 1.1160 during the European session on Monday. Traders continued to assess geopolitical developments alongside concerns regarding French debt and politics, causing the pair to range-trade amidst thin liquidity. US bond markets were closed on Monday for Columbus Day. EUR/USD remains near recent lows, hovering around 1.1200, weighed down by fiscal and political anxieties within the Eurozone—particularly regarding France. IMM data indicates that leveraged funds are rebuilding short positions on the Euro. MUFG warns that the Euro remains at risk of further weakening before year-end, as no clear positive catalysts have emerged. Heightened investor concerns regarding fiscal and political risks in the Eurozone—particularly in France—continue to weigh heavily on the Euro and the region's government bonds. At this stage, the absence of obvious positive catalysts to reverse bearish sentiment leaves the Euro vulnerable to further decline as the year draws to a close.

On the daily chart, EUR/USD has fallen below 1.1200; the short-term outlook remains bearish as the spot price holds below the 14-day Simple Moving Average (SMA) at 1.1285. Despite the recent drop, the pair remains under pressure. Although the 14-period Relative Strength Index (RSI) is in oversold territory (around 26)—suggesting downside momentum may be overextended—sellers remain in control as long as the price stays capped by the 14-day SMA at 1.1285. To the upside, initial resistance lies near the 14-day SMA (1.1285) and the 1.1300 psychological level; a daily close above this barrier, followed by a strong push toward the 20-day SMA (1.1342), would be required to alleviate current downward pressure and signal a more sustained correction. To the downside, failure to hold the one-year low of 1.1161 could trigger a fresh decline toward the 1.1100 psychological level.

Consider going long on the Euro today at 1.1145; Stop Loss: 1.1135; Targets: 1.1190, 1.1200.

Commodity Analysis:

WTI Spot Crude Oil

US President Trump is considering joining Saudi Arabia in military retaliation against Houthi rebels in Yemen. Meanwhile, amidst escalating risks regarding tanker attacks in the Gulf of Oman and navigation through the Strait of Hormuz, WTI crude oil prices retreated slightly to around $90 per barrel during Asian trading hours following two days of gains; however, geopolitical supply risks continue to provide strong price support as the market closely monitors the situation in the Middle East. The crude oil market is currently characterized by high-level volatility driven by a geopolitical risk premium; three key pillars supporting these elevated prices include repeated deadly attacks by Houthi forces on critical Saudi infrastructure, growing expectations of potential US military intervention, and persistent risks to navigation in the Strait of Hormuz. Conversely, factors such as the accelerated depletion of global commercial inventories, shrinking strategic reserve capacity, and the gradual restoration of alternative transport routes are somewhat limiting the upside potential for oil prices. Short-term price trends will hinge on three core variables: whether the Middle East conflict escalates into broader military confrontation, whether navigation through the Strait of Hormuz remains relatively stable, and the actual impact of US strategic reserve releases. Should the conflict expand and lead to a substantial supply disruption,

WTI prices could break through the $93 level and challenge higher ranges; conversely, if the situation shows signs of easing alongside expectations of returning supply, prices might pull back to seek support near $87. Given the significant narrowing of global inventory buffers, even a nominal recovery in supply would struggle to quickly offset the market's pricing of "tail risks," necessitating high vigilance regarding volatility triggered by geopolitical events.
From a technical perspective, WTI crude oil is fluctuating widely within the $87.50–$93.50 range on the daily chart; short-term moving averages are intertwined, indicating an unclear directional trend. The RSI indicator has flattened after retreating from overbought territory to a neutral zone, suggesting a temporary balance between bullish and bearish forces. Regarding resistance to the upside, the early-October high of $93.50 marks the pressure point of a recent high-volume trading zone; a decisive breakout above this level could pave the way to retest the $95.00 mark. On the downside, a decisive break below the psychological $90 level could lead the market to test the support zone near $88.03 (the 50-day moving average), followed by the $87 round-number level, with stronger support located around $85.50.

Consider going long on crude oil today at $92.25; stop-loss: $92.00; targets: $93.60, $94.00.

Spot Gold

After rising for two consecutive trading sessions, gold prices traded near $4,200 per ounce on Monday. Falling oil prices—driven by market hopes that Russian diesel supplies would alleviate the global fuel shortage and ease inflation concerns—provided a backdrop for this movement. On Friday, President Trump announced that his administration had reached an agreement with Russia for the supply of hundreds of thousands of tons of diesel, signaling a partial lifting of Moscow's diesel export ban. Trump also stated that Russia and Ukraine had agreed to an "energy ceasefire" effective immediately. Meanwhile, Iran-backed Houthi rebels launched another attack on a major Saudi Arabian airport on Sunday; an attack the previous day had left twelve people dead and over three hundred injured. These attacks prompted Trump to consider joining Saudi Arabia in retaliatory action against the Houthi rebels in Yemen. Elsewhere, investors are focusing on key US inflation data due this week, which may offer new clues regarding the Federal Reserve's next policy moves.

From a technical perspective, gold prices are showing signs of stabilizing on the daily chart following a significant earlier pullback, though they remain below the 20-day simple moving average of $4,226, indicating that the overall bearish structure has not yet fully reversed. The 14-period Relative Strength Index (RSI) has rebounded to around 47—remaining below the neutral 50 level—suggesting that sellers still hold a slight advantage, though downward momentum is waning. The Bollinger Band lower rail (around $4,054) and the $4,066 area (the October 7 low) form a zone of strong support below; should the gold price retreat further into this range, it could potentially drop to the psychological $4,000 level, where buying interest might emerge. Regarding resistance, the $4,217 level (early-week high) and the 20-day simple moving average at $4,226 constitute the first key resistance zone, followed by the 100-day simple moving average at approximately $4,256; only by reclaiming these levels can the bearish trend on the daily chart be significantly alleviated.

Consider going long on gold at $4,165 today, with a stop-loss at $4,160 and targets at $4,200 and $4,210.