US Dollar Index

At the start of the week, the US Dollar Index (DXY) was trading near 101.6. For the third consecutive week, it has failed to sustain an upward trajectory, despite a backdrop of positive economic data and risk-averse sentiment. Last week, the Federal Reserve kept the federal funds rate target range unchanged at 3.75%–4.00%, though two dissenting votes favored a rate hike. Meanwhile, US GDP for the third quarter grew at an annualized rate of 3.4%, and the Personal Consumption Expenditures (PCE) price index for September rose to 3.6% year-on-year (with the core index reaching 3.1%). Markets are currently pricing in a roughly 75% probability of a rate hike in December. Key risk events this week include the US midterm elections on Tuesday and the non-farm payroll (NFP) report on Friday; market expectations suggest a 95% probability that the Republican Party will lose control of at least one chamber of Congress. Over the past three weeks, the DXY has failed to show a sustained response to either positive fundamental news or increased demand for safe-haven assets. Market pricing for the Fed’s policy path already fully accounts for further tightening, with short-end interest rate futures indicating a 75% chance of a 25-basis-point hike in December. Regarding safe-haven demand, the US dollar has not commanded the significant premium typically seen in past cycles—despite ongoing geopolitical uncertainty—suggesting that investors are placing greater weight on future political and fiscal variables.

If the election results align with current expectations, their marginal impact on the US dollar will likely be limited. Friday’s US non-farm payroll report represents another major data risk, which could further solidify expectations for a December rate hike; conversely, a significant slowdown could narrow the scope for further tightening. The tendency for market participants to reduce risk exposure ahead of elections and key data releases partly explains the dollar’s ​​lack of sustained momentum, even in the face of favorable data. On a daily chart, the Bollinger Bands show the middle, upper, and lower bands at 101.93, 102.60, and 101.26, respectively. The current price sits below the middle band and is approaching the lower band, with volatility at a moderate level. The MACD histogram is positioned below the zero line. The relative position of the price against the moving average system indicates a narrowing of the recent trading range, while the crossover status of the indicators reflects a divergence between short-term momentum and the medium-term trend. Upside resistance is initially found in the 102.53–102.60 range—comprising the October 5 high and the upper Bollinger Band—with a break above this area pointing toward 102.94 (the October 14 high). On the downside, support lies at 101.43 (the low from earlier this week) and the 101.00 psychological level.

For today, one might consider shorting the USD at 101.95, with a stop-loss at 102.05 and targets at 101.60 and 101.50.

AUD/USD

The Australian dollar fell below $0.70, hitting a two-week low. The Reserve Bank of Australia’s (RBA) policy decision—which proved less hawkish than anticipated—dampened market expectations for further monetary tightening. As widely expected, the RBA raised the cash rate by 25 basis points to 4.85%—the fifth hike this year—bringing borrowing costs to their highest level since December 2008. The decision highlights persistent and broad-based inflation, driven by factors such as high fuel and commodity prices, domestic capacity constraints, and demand for AI-related technology products. However, the rate hike was largely priced in; the vote was 6–3, with three policymakers favoring a hold. Furthermore, the RBA removed explicit language regarding further rate hikes, signaling a potential pause at its next meeting in December, which weighed on the Australian dollar.

On the daily chart, AUD/USD is trading near 0.6970. As it remains below the 200-day simple moving average (near 0.7058), the short-term outlook remains bearish. The currency pair has fallen back below the recent uptrend line at 0.7117, signaling that recent attempts to establish a bottom have stalled. The 14-day Relative Strength Index (RSI) sits at 46.67, suggesting neutral-to-bearish momentum rather than clearly oversold conditions. On the upside, initial resistance lies near the 200-day simple moving average (SMA) at 0.7058, followed by the aforementioned uptrend line—now acting as resistance—at 0.7117. Stronger resistance is found at the horizontal barrier near 0.7198. On the downside, initial support appears at 0.6922 (a previous uptrend line level), while deeper structural demand is concentrated in the 0.6897–0.6833 zone—the origin of an earlier uptrend—where buyers are likely to attempt to halt further declines.

Consider going long on the AUD at 0.6955 today; stop-loss: 0.6945; targets: 0.7000, 0.7010.

GBP/USD

During early Asian trading on Tuesday, GBP/USD is hovering near 1.3400, snapping a four-day winning streak. Markets are turning cautious ahead of a week packed with major catalysts, including the U.S. midterm elections, the Bank of England’s (BoE) interest rate decision, and U.S. employment data for September. If the Democrats win the House while the Republicans retain control of the Senate, the impact on the U.S. fiscal outlook could be mixed. Conversely, a Republican sweep of both chambers could lead to further tax reforms or increased defense spending—moves that investors anticipate might expand the already substantial U.S. budget deficit. The Bank of England is expected to raise its bank rate from 3.75% to 4.0% at its November policy meeting this Thursday. This would mark the first rate hike since August 2023, a period during which inflation has remained above the BoE’s 2% target. Traders will be closely monitoring the press conference for further clues regarding the outlook for UK interest rates. Any hawkish remarks from Bank of England Governor Andrew Bailey could provide support for the GBP/USD pair.
On the daily chart, GBP/USD maintains a short-term bullish bias, with the spot price holding above the middle line of the Bollinger Bands (1.3315) and the psychological level of 1.3300. The price is approaching the upper Bollinger Band, while the Relative Strength Index (14) sits at approximately 58—indicating constructive momentum that has not yet reached overbought territory. This suggests that as long as the pair remains firmly above key moving average support, buyers will continue to dominate. On the upside, initial resistance is found near 1.3425 (the 200-day simple moving average); should buying pressure wane, the rally could stall or trigger a pullback before reaching 1.3461 (the upper Bollinger Band). On the downside, initial support lies at the middle Bollinger Band (1.3317), followed by the psychological level near 1.3300. A deeper pullback would expose the 23.6% Fibonacci retracement level at 1.3265.

For today, consider going long on GBP at 1.3408; stop-loss: 1.3400; targets: 1.3440, 1.3450.

USD/JPY

While the US dollar declined against the euro and the British pound—partly influenced by US-Iran diplomatic developments—it did not weaken against the Japanese yen. USD/JPY reached 157.97, its highest level since October 29. Earlier, when the dollar saw its sharpest declines in other markets, the pair dipped slightly above 157.50 before rebounding to its recent highs. It is currently trading just below the 159.00 level. Japan relies on overseas imports for nearly all of its crude oil; consequently, the prospect of negotiations between the U.S. and Iran has driven oil prices lower, reducing Japan’s import bill—though the Japanese yen remains weak. With the Bank of Japan’s next policy decision not scheduled until December 17–18, there will be no changes on the Japanese side of the USD/JPY interest rate differential for the next six-plus weeks. Following a decline in the S&P Global U.S. Manufacturing PMI (final reading) from 56.0 to 54.9, the USD/JPY pair retreated to just above 157.50. Subsequently, the Institute for Supply Management (ISM) manufacturing survey came in at 55.5—surpassing the expected 54.6—which pushed the pair back up to just below 158.00.

Since late September, the USD/JPY pair has traded within a range spanning from slightly above 156.00 to near 159.00, following a rebound from a low of just under 153.00 earlier that month. Both the 50-day and 200-day exponential moving averages (EMA) lie within this range, separated by less than 0.2 yen.
Since early October, the pair has crossed both of these moving averages multiple times. The core dynamic currently driving the USD/JPY pair is a tug-of-war between support from the U.S.-Japan interest rate differential and downward pressure stemming from the risk of Japanese market intervention combined with easing diplomatic tensions in the Middle East. On the upside, the pair faces resistance at last week’s high of 158.35; a decisive break above this level would open the door for further gains toward 159.04 (the high from September 24), with the potential to subsequently approach the 160.00 mark. On the downside, support is found at 157.46 (the low from earlier this week). A breach of this level could lead to a further test of the 157.00 psychological threshold. Consider shorting the USD at 158.85 today; stop-loss: 159.00; targets: 158.20, 158.00.

EUR/USD

During the Asian session on Tuesday, the EUR/USD pair traded with a slight bearish bias, attempting to extend the modest pullback from the 1.1235 area—a one-and-a-half-week high—seen the previous day. The spot price is currently hovering just below the 1.1200 mark; however, the decline lacks follow-through, as traders appear cautious ahead of the U.S. midterm elections. Market forecasts strongly favor the Democrats winning the House of Representatives, while a Republican sweep would represent a major market surprise—a scenario that could drive up U.S. Treasury yields and the U.S. dollar. Regardless, the election results are likely to trigger short-term volatility and provide some momentum for the EUR/USD pair. Meanwhile, better-than-expected U.S. macroeconomic data from Monday, combined with hawkish bets regarding the Federal Reserve, appear to be providing support to the dollar. Furthermore, U.S. President Donald Trump stated on Monday that Iran is interested in reaching an agreement to end the war, and that such a deal could potentially be achieved. This may deter traders from making aggressive bearish bets against the dollar; coupled with growing concerns over France’s debt levels and ongoing political gridlock, these factors should help limit any upside for the EUR/USD pair.

Given the retreat from the monthly swing high in August, the range-bound price action observed over the past month or so can be characterized as a bearish consolidation phase. Moreover, the EUR/USD pair remains below the 200-period simple moving average (SMA) on the 4-hour chart—currently at 1.1367—maintaining a prevailing negative tone. That said, to reconfirm the bearish outlook and pave the way for a deeper decline, the pair would need to break decisively below the support level of its current trading range, specifically near the 1.1100 psychological mark. On the upside, immediate resistance lies at the 200-period SMA, located at 1.1267. The bulls need to reclaim the area above this hurdle—up toward the 1.1300 level—to alleviate downward pressure and pave the way for a more constructive outlook. On the downside, the lower Bollinger Band at 1.1135 provides the next significant level of support; a decisive break below this point would open the door for new lows beneath the 1.1100 mark, within the context of the prevailing bearish trend.

For today, consider going long on the EUR at 1.1180, with a stop-loss at 1.1170 and targets at 1.1220 and 1.1230.

WTI Crude Oil

Oil prices fell by more than 6% on Monday as talks between Iranian and Qatari officials sparked hopes for an end to the conflict involving the U.S., Israel, and Iran. This fueled expectations for more stable crude oil supplies from the Middle East, pushing WTI crude back below the $100-per-barrel mark; it is currently trading near $94.50 per barrel as of Tuesday. This sharp pullback follows several days of indirect U.S.-Iran negotiations mediated by Qatar, alongside China’s decision to send a special envoy to the Middle East to facilitate dialogue—a potential turning point for both the regional geopolitical crisis and oil price expectations. Iran has proposed a "two-day navigation plan," requesting that the U.S. first fulfill certain conditions—such as easing sanctions—before the resumption of shipping through the Strait of Hormuz. However, it should be noted that this is merely an Iranian proposal; core disagreements between the parties remain unresolved, the negotiations have reached a stalemate, and the outlook for shipping through the Strait remains uncertain, continuing to inject a geopolitical risk premium into the crude oil market. Meanwhile, against a backdrop of persistent geopolitical risk and severely depleted global inventories, investment banks have been raising their crude oil price forecasts.

Looking at recent trends, WTI crude retreated after hitting approximately $104.02 per barrel in late October. It traded below $100 in early November and is currently quoted at $95.90. Volatility remains high, reflecting the market's sensitivity to specific events. Bollinger Bands indicate that the price pulled back after approaching the upper band, while the MACD indicator remains in a neutral zone. Fundamental risk premiums and supply uncertainties remain the primary drivers, with the market closely monitoring actual supply data and any potential disruptions. The current consolidation at high price levels reflects a balancing act between the forces of potential escalation and the prospect of supply recovery, rather than the confirmation of a clear, singular trend. On the upside, $96.823 (the 5-day Exponential Moving Average, or EMA) serves as an initial level of interest, followed by the key resistance level at $100.00—a significant psychological threshold for the market. On the downside, the first level to watch is the 100-day exponential moving average (EMA) at $93.25; a break below this could see $90.00 emerge as a key support level.

For today, one might consider going long on crude oil at $95.75, with a stop-loss at $95.60 and targets at $97.00 and $98.00.

Spot Gold

During Tuesday’s Asian trading session, spot gold was trading near $1,935 per ounce. Gold rebounded from a one-year low on Monday, supported by a decline in oil prices—which eased inflationary concerns—as investors also awaited the U.S. midterm elections. At this juncture, gold has entered a critical observation window; the pivotal question is whether it can establish a bottom—a scenario where the market stops falling despite negative news, suggesting that the bearish factors have been fully priced in. In the short term, several conflicting factors are at play: on one hand, there is pressure from the unfolding credit risks among cloud computing firms and liquidity volatility in the U.S. stock market; on the other, the easing of U.S.-Iran negotiations has led to a reduction in the geopolitical risk premium. Furthermore, with the midterm elections approaching, the ever-present possibility of a "black swan" event remains. Investors should closely monitor upcoming U.S. inflation data, Friday’s non-farm payroll report, and the midterm election results, as the latter could significantly influence U.S. fiscal policy. Some, however, argue that the election’s impact may be limited, as neither party is likely to address the U.S.'s high debt burden—a long-term environment that generally favors gold. It will be important to assess the trajectory of interest rates, the composition of Congress, and the potential scope for Trump’s future domestic and Middle East policy choices.

At the start of the week, spot gold showed a slight recovery on the weekly chart following a sharp decline last week. The emergence of buying interest before the price could break below last week’s low suggests that capital may be entering at lower levels, or that the market is undergoing a technical correction following an oversold condition. Weekly momentum indicators suggest that the broader trend remains downward. As previously emphasized, the "falling three methods" pattern on the daily chart has proven effective, driving gold prices to new lows. Currently, the price is forming another bearish "falling three methods" pattern. Further down, support lies near 3,600—a level that also aligns with the 50.0% Fibonacci retracement. For a near-term reversal, gold must climb above 3,950; otherwise, any upward movement is likely just a rebound, with further new lows to follow. A drop below $3,870.30 would confirm the resumption of the downtrend, while a decisive break above the psychological $4,000 mark would be required to shift the broader trend to the upside. The market is currently testing a key range defined by the major swing between the November 2024 low of $2,536.85 and the January 2026 high of $5,602.23, with a retracement zone spanning from $4,069.54 to $3,707.82—a range viewed by many long-term investors as an area of ​​value. Resistance levels to the upside include the 52-week moving average at $4,447.29 and the psychological $4,000 mark, both of which serve as significant long-term trend resistance; additionally, the 100-period EMA near $4,085 acts as a further barrier. Should the price fall below the recent low of $3,870, followed by the $3,707.80 and $3,700 levels, the bearish outlook will be further reinforced.

For today, one might consider going long on gold at 3,918, with a stop-loss at 3,913 and targets at 3,950 and 3,960.