US Dollar Index

On Wednesday, the US Dollar Index (DXY) fell below 101.50, reaching a five-week low of 101.25. Investors are closely monitoring the unfolding midterm election results, with early polls suggesting a potentially strong performance by the Democratic Party. The market is assessing the possibility of the Democrats gaining control of both the House and the Senate—a scenario that could lead to political gridlock in Washington and a reduction in government spending. A sweeping Democratic victory could also pave the way for stricter regulation of artificial intelligence and increased corporate oversight, which might weigh on the economic growth outlook. On the geopolitical front, investors are watching to see whether President Trump might resume military strikes against Iran following the election, given the continued difficulty in reaching a diplomatic solution. Meanwhile, the market is turning its attention to the highly anticipated US employment report due later this week; this data could provide fresh signals regarding the strength of the labor market and influence expectations for Federal Reserve policy.

Since October, the US Dollar Index has been fluctuating within a range of 101.20 to 101.25, with a central pivot near 101. It is highly likely that this pattern of oscillation around the 101 level will persist in the near term. The current pullback from the high of 102.49 can be viewed as an adjustment within this established range. The middle line of the Bollinger Band (at 101.98)—which roughly aligns with the 102 pivot level—serves as the primary resistance for any rebound. The upper Bollinger Band (at 102.52) coincides with the top of the range (102.49), acting as a strong resistance level. Having fallen below the middle Bollinger Band (101.38), the index has weakened in the short term and is now testing support at the 101 level. Unless the index can decisively break above the middle Bollinger Band (101.98) and the 102 pivot level, it is unlikely to establish a clear, one-directional trend. On the MACD indicator, the DIFF line is currently below the DEA line, with the green bars continuing to widen—a sign that bearish momentum is being unleashed. The RSI reading stands at 41.1053; since it has not yet entered the oversold territory (below 30), there remains room for further bearish pressure.

For today, consider shorting the USD at 101.60, with a stop-loss at 101.70 and targets at 101.30 and 101.20.

AUD/USD

During Wednesday’s Asian session, the AUD/USD pair rebounded following two consecutive days of declines, trading near 0.7010. The pair held onto recent gains as the Australian dollar remained resilient following the release of economic data from China—Australia’s primary trading partner. China’s Caixin Services Purchasing Managers' Index (PMI) fell from 51.6 in September to 50.8 in October, signaling a slight slowdown in the expansion of the service sector. Similarly, the S&P Global Composite PMI dropped from 51.3 in September to 48.2; while this beat the initial forecast of 47.7, it indicates that both the manufacturing and service sectors have slipped back into contraction. Despite this current resilience, the AUD/USD pair may face headwinds moving forward. Political uncertainty surrounding the upcoming U.S. midterm elections, combined with stalled peace negotiations involving Iran, continues to weigh on investor sentiment—overshadowing the impact of the Reserve Bank of Australia’s (RBA) latest interest rate hike.

The AUD/USD pair has pulled back to trade near 0.7010, reflecting that the market had already fully priced in the RBA’s policy move and interpreted the cautious tone within the accompanying statement. On the daily chart, the pair is hovering around 0.7000, maintaining a bearish short-term bias as it remains below both the 100-day simple moving average (0.7031) and the 200-day simple moving average (0.7058). The configuration of multiple moving averages stacked above the price indicates that any rebound remains constrained. The Relative Strength Index (RSI) sits at 42—below the centerline—suggesting that momentum remains weak, while an Average Directional Index (ADX) near 22 points to only moderate trend strength. On the upside, initial resistance lies at the psychological level of 0.7000, followed by the 200-day simple moving average at 0.7058. On the downside, the first notable support is found at the lower Bollinger Band near 0.6923; should selling pressure intensify, the 0.6900 level would mark the next potential downside target.

Consider going long on the AUD at 0.7000 today; stop-loss: 0.6990; targets: 0.7040, 0.7050.

GBP/USD

On Wednesday, the British pound accelerated its gains amid a weakening US dollar, bolstered by news that the Democratic Party had secured control of both the House and the Senate in the US midterm elections. At the time of writing, GBP/USD was up 0.5% for the day, reaching a seven-week high above 1.3485. Reports from the US confirmed an overwhelming backlash against President Trump’s policies—a trend that extended even into traditional Republican strongholds such as Kansas, Ohio, North Carolina, and Texas. The US dollar fell across the board following initial results pointing to a Democratic victory. Investors, concerned that the Democrats might push for stricter regulation of the artificial intelligence (AI) sector and curb the expansion of data centers, triggered a sell-off in AI-related stocks, while capital flowed into government bonds in search of a safe haven. The market initially interpreted a Democratic-controlled Congress as signaling "reduced fiscal stimulus and, consequently, lower inflation"—a combination that implies lower US Treasury yields, which is unfavorable for the US dollar. On the daily chart, the GBP/USD pair maintains a short-term bullish bias after breaking above the 200-day Simple Moving Average (SMA) at 1.3424 during the session. Furthermore, the spot price sits slightly above the 61.8% Fibonacci retracement level of 1.3467, indicating that buyers are holding this pivot zone after reclaiming the midpoint of the recent downward move. To the upside, resistance lies at the 78.6% Fibonacci retracement level of 1.3556, followed by the recent cycle high of 1.3670. On the downside, immediate support is found near the 200-day SMA at 1.3424 and the 50.0% retracement level at 1.3404, with deeper support located at the 38.2% level (1.3341) and the 23.6% retracement level (1.3264).

Consider going long on GBP at 1.3460 today; stop-loss: 1.3450; targets: 1.3510, 1.3520.

USD/JPY

On Wednesday, the Japanese yen strengthened against the US dollar, reaching the 157.45 level and reversing a two-day losing streak. This shift followed preliminary election polls suggesting the Democratic Party might secure control of both chambers of Congress, placing significant pressure on the US dollar. Such an outcome has heightened political uncertainty in the US; a "clean sweep" by the Democrats could lead to stricter regulation of artificial intelligence and increased corporate oversight, potentially weighing on the US economic growth outlook. As tech and AI-related stocks faced renewed selling pressure, the yen benefited from safe-haven demand, with government bonds also seeing increased interest. Investors are now awaiting Japanese wage data, due later this week, for further insight into the Bank of Japan’s monetary policy outlook. Last week, the Bank of Japan kept its benchmark interest rate unchanged at 1.25%, but noted that underlying inflation has reached its 2% target—a development that could pave the way for another rate hike as early as December.

The USD/JPY pair remains below its 100-day simple moving average (SMA) at 159.15 and the 61.8% Fibonacci retracement level at 159.75, keeping the short-term bias limited and slightly bearish. The pair is currently hovering near 158.00, which acts as a key resistance level; a sustained rebound would require the price to reclaim this mark. With the daily Stochastic RSI reading near 82—at the high end of its range—another pullback (similar to the one seen following the data release) would not invalidate this outlook. This trading view would be negated by a daily close below 157.00. On the downside, initial support lies at the 38.2% Fibonacci retracement level of 157.16, followed by the lower Bollinger Band at 156.96, and a structural cyclical low near 156.00; should selling pressure return, stronger buying interest is expected in this zone. Regarding resistance, 158.00—the level below which USD/JPY fell following the data release—coincides with the 50-day exponential moving average (EMA). The next level of resistance is the 100-day SMA at 159.15.

For today, consider shorting USD/JPY at 158.60, with a stop-loss at 158.80 and targets at 158.00 and 157.80.

EUR/USD

During early Asian trading on Wednesday, the EUR/USD pair edged higher to around 1.1262. Uncertainty surrounding the U.S. midterm elections has exerted some selling pressure on the U.S. dollar against the euro. Traders are closely monitoring the election results ahead of the release of U.S. employment data for September, due later this week. In the House of Representatives, media outlets have projected winners for over two dozen seats; however, none of these come from the highly contested districts among the 435 total seats. In the Senate, according to U.S. media projections, the Democratic Party has secured 7 of the 35 seats up for election on Tuesday—including the victory of Senator Jon Ossoff in Georgia. Despite these initial wins, the party still requires a net gain of 4 seats to secure control of the Senate. Last week, the European Central Bank (ECB) kept its key interest rates unchanged, following two previous hikes since the onset of the conflict involving Iran. Several officials have indicated that further rate increases may still be necessary. While economists anticipate one final hike next month, the market expects the tightening cycle to persist for much longer—potentially extending until 2027.

On the daily chart, the short-term outlook for EUR/USD remains bearish, as the spot price continues to be capped below the 40-day simple moving average (SMA) at 1.1297. The price is currently hovering just above the midline of the Bollinger Band at 1.1194, signaling a modest but fragile level of buying interest, while the upper Bollinger Band at 1.1256 acts as immediate overhead resistance. The Relative Strength Index (RSI) sits at 46—remaining below the 50-neutral mark—which suggests that any attempted rebound lacks strong momentum. On the upside, initial resistance is found near the upper Bollinger Band at 1.1256 and Wednesday’s high of 1.1262. Beyond that lies the more significant resistance at the 40-day SMA (1.1297), a level where sellers are expected to defend the broader downward trend. On the downside, the first level of support lies at the Bollinger Band midline of 1.1194, with further support located near the lower band at 1.1132. A daily close below this latter support level would reinforce the bearish structure and pave the way for further declines.

For today, consider going long on the EUR at 1.1220, with a stop-loss at 1.1210 and targets at 1.1250 and 1.1260.

WTI Crude Oil (Spot)

On Wednesday, crude oil prices fell by more than 8% to below $88 per barrel, marking a third consecutive day of declines and hitting a one-month low. Prices remained under pressure as investors assessed the prospects for de-escalation in the conflict involving the U.S., Israel, and Iran—a sentiment compounded by the Republican Party's losses in the midterm elections. President Donald Trump stated that Washington has no immediate plans for further strikes, though he emphasized that the U.S. remains prepared to take action if necessary. Meanwhile, diplomatic mediation efforts led by Qatar and Pakistan are ongoing; Qatari officials anticipate responses from the parties involved regarding proposals to resolve the conflict, even as reports suggest that a formal agreement remains a distant prospect. Supply-side factors have also weighed on prices: the resumption of exports from the Gulf region has pushed Middle Eastern oil supply above short-term demand for the first time since July. Conversely, U.S. crude oil inventories fell by 865,000 barrels last week, marking the fifth consecutive weekly decline.

On the daily chart, the medium-term uptrend for WTI crude oil has not been entirely broken. The price has staged a corrective rebound from its recent lows, moving toward the upper band of the Bollinger Bands. The RSI indicator has recovered from the lower end into neutral territory, signaling a resurgence in bullish momentum—though it has yet to reach overbought levels, and significant resistance remains overhead. The daily trading range holds between $94.00 and $100.00. A firm stabilization above $99.20 would be required for the bulls to open up further upside potential; conversely, a decisive break back below $94.30 would signal a resumption of the pullback, with the next key support level located at $87.00. On the 4-hour timeframe, the price has developed a corrective upward structure from its recent low, with short-term moving averages turning higher to provide support. Indicators are gradually recovering from low levels without entering overbought territory, suggesting the potential for further tests of overhead resistance in the short term. However, it should be noted that any significant news of de-escalation from the ongoing negotiations could easily halt the rebound and trigger a renewed decline. The first resistance level above is 96.80, with strong resistance at 99.20. Immediate support below is at 87.00, followed by the 85.00 level. Until a breakout occurs at these key positions, the market is considered to be in a consolidation phase at low levels, awaiting a fundamental catalyst to determine its direction.

For today, one might consider going long on crude oil at 87.80, with a stop-loss at 87.65 and targets at 89.80 and 89.50.

Spot Gold

On Wednesday, gold prices rose by more than 2%, reclaiming the $4,000-per-ounce mark, bolstered by a weaker U.S. dollar and declining U.S. Treasury yields. This followed key victories for the Democratic Party in the U.S. midterm elections. The market anticipates that these results could increase the likelihood of political gridlock in Washington, potentially limiting the prospects for further fiscal expansion. The U.S. dollar fell to a four-week low, and yields across the U.S. Treasury curve declined, enhancing the appeal of non-yielding assets like gold. Meanwhile, persistent uncertainty surrounding U.S.-Iran negotiations has cast a shadow over the geopolitical landscape, with Washington and Tehran remaining far from an agreement to resolve their conflict. Investors are also turning their attention to Friday’s U.S. non-farm payrolls report, which will provide further insight into the Federal Reserve’s policy outlook. According to the CME FedWatch Tool, the market currently assigns a 79% probability to a Federal Reserve rate hike in December.

Gold has held onto its weekly highs, remaining firmly above $4,000. The primary driver is the U.S. election outcome, which pushed the dollar to its lowest level since late September; the prospect of a Democratic-controlled legislature has fueled expectations of political gridlock in Washington, driving safe-haven inflows and weighing on both the dollar and U.S. Treasury yields. However, expectations for aggressive, hawkish rate hikes act as a ceiling for the price. Geopolitical risks persist—such as the attack on a tanker in the Strait of Hormuz and the conditions set by Iran for reopening the strait—which indirectly support rate-hike expectations by influencing oil prices and inflation forecasts, rather than directly fueling safe-haven buying. The short-term outlook depends on how Friday’s non-farm payroll (NFP) data influences the repricing of interest rate hike expectations, as well as whether the post-election weakness in the U.S. dollar persists. It is prudent to wait for strong follow-through buying before confirming that a bottom has been established. On the upside, initial resistance lies near the $4,074 level—the middle line of the Bollinger Band—followed by the 34-day simple moving average at $4,135. On the downside, immediate support aligns with the psychological $4,000 mark; a decisive break below this level would open the door for further bearish movement toward last Friday’s annual low of $3,870.

For today, consider going long on gold at $4,060, with a stop-loss at $4,055 and targets at $4,090 and $4,100.