US Dollar Index

The US dollar rebounded and has risen for five consecutive days. Traders heard Christine Lagarde say that the growth outlook for the eurozone is more downside after the European Central Bank cut interest rates by 25 basis points. The US dollar index broke through a key level and is expected to rise to 104.00. The US dollar index continued to rise as financial markets doubled down on Donald Trump's victory in the US presidential election. This is mainly due to Trump's plan to deregulate in several sectors of the economy. It has broken through a key resistance level and is moving towards 104.00. With the US economy showing mixed signs, Federal Reserve officials remain cautious, suggesting that the pace of easing will depend on the upcoming data. At the same time, political tensions seem to benefit the US dollar ahead of the November election. For many countries, especially those with close relations with the United States, the risk of trade tariffs may be enough to prevent the move to the US dollar as the main accounting currency. However, for those countries whose geopolitical relations with the United States have deteriorated, the implementation of sanctions may provide greater motivation to bypass the US dollar over time.

The daily chart shows that the 14-day relative strength index (RSI) of the technical indicators of the US dollar index is at the 72.00 level, and the moving average convergence divergence (MACD) indicator is still showing overbought signals, indicating potential correction pressure. The index has broken through the key 100-day simple moving average (103.20) this week, and the next major resistance is at the 200-day moving average of 103.79 and the 104.00 (market psychological level) area. Although buyers are driving the optimistic outlook, there may be potential adjustments before the next rise. Therefore, the support below is at the 100-day simple moving average of 103.20, and 103.15 (50.0% Fibonacci rebound level from 106.13 to 100.16), and a break points to 103.00 (round number).

Consider shorting the US dollar index near 103.85 today, stop loss: 103.95, target: 103.50 102.40

WTI crude oil

Crude oil found support on Thursday and stabilized at a weekly low of $69.15. Overnight, the API weekly data showed an unexpected decline. The US dollar index broke through a key level and rose to 104.00. On Thursday, US WTI crude oil traded just above $70.00. WTI oil prices were pressured lower due to news that Israel would not attack Iranian oil facilities. The White House sought Israel to make this commitment to prevent further escalation of tensions in the Middle East and avoid potential oil price increases. Traders will pay close attention to geopolitical tensions in the Middle East. If tensions in the Middle East escalate, it may boost WTI oil prices. US crude oil inventories increased more than expected last week. According to the American Petroleum Institute (API), U.S. crude oil inventories rose by 1.58 million barrels in the week ending October 11, compared with an increase of 10.9 million barrels in the previous week. The Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (EIA) this week lowered their forecasts for global oil demand growth through 2024. As the world's largest oil consumer, further new stimulus plans from China may boost WTI oil prices in the short term.

Crude oil is trying to hold the $70.00 mark, but it is not an easy task. As OPEC is about to open up oil supply, supply remains weak, so there is little upside potential. Geopolitical tensions seem to have eased, and oil values ​​may fall further below $70.00. Crude oil's road to recovery is challenging. First, $71.58 (20-day EMA), and $71.34 (50.0% Fibonacci retracement) are key resistance levels for the rally, which must be broken to see the 55-day EMA at $72.11. A breakout points to the $73.54 (50.0% Fibonacci retracement of $77.93 to $69.15) level, which, along with the 100-day simple moving average (75.28) and some key lines, could be the first big hurdle ahead. On the downside, the previously mentioned key level of $71.58 - $71.34 has now turned into resistance and no longer has any support value. Instead, traders need to set their sights on lower levels, namely the market psychological barrier of $70.00. A break above this level would put the 2024 low so far at $64.75, followed by this week's low of $69.15.

Consider going long on crude oil near 70.00 today, stop loss: 69.80; target: 71.50; 71.60

Spot gold

Gold prices rose for the third consecutive trading day, breaking the recent all-time high of about $2696.80 per ounce, despite the rising US dollar and the corrective rise in US yields. Gold prices continued to rise after rising over the past week or so, and retested the all-time high on Wednesday under the influence of expectations of interest rate cuts by major central banks. Traders have fully priced in a 25 basis point rate cut by the US Federal Reserve in November. In addition, weak inflation in Europe and the UK has strengthened market bets on more aggressive easing policies by the European Central Bank and the Bank of England. This has led to a general decline in bond yields, which in turn continues to provide support for zero-yielding asset gold prices. In addition, geopolitical risks caused by the ongoing conflict in the Middle East have become another factor supporting the demand for gold's safe-haven prices. At the same time, the US dollar rose to 103.87, the highest level since early August. This could therefore inhibit traders from opening new bullish bets on gold prices and prevent upside in gold prices ahead of the release of US macro data later this Thursday.

From a near-term technical perspective, the continued strength in gold prices could pull gold prices to the $2,700 mark in the short term. Some follow-up buying would be seen by bulls as a fresh trigger and pave the way for the continuation of the multi-month rally. The 14-day relative strength index (RSI), a technical indicator on the daily chart, shows that the upward momentum has increased. It remains in the positive zone and is far from the overbought area, which strengthens the bullish outlook. On the other hand, the horizontal area of ​​the 55-day moving average of $2,652.60 now seems to be providing support, followed by the $2,647-2,646 area. A clear break below this level could trigger some technical selling and push gold prices down to the $2,634.50 (25-day moving average) support level, which would then look to fall to around the market psychological level of $2,600. As for the upside, the first resistance is at the $2,700.00 mark. A breakout will directly point to regional levels such as $2,720.00 and $2,750.00.

Today, consider going long on gold before 2,690.00, stop loss: 2,685.00; target: 2,710.00; 2,715.00

AUD/USD

On Thursday, AUD/USD managed to regain some balance, rebounding from recent lows around 0.6650 and hitting the key 0.6700 mark again. AUD/USD interrupted a three-day losing streak after a strong Australian jobs report was released on Thursday. It once returned above 0.6700. Australia's employment change in September surged by 64,100, bringing the total number of employed people to a record high of 14.52 million, after adjustment. This far exceeded market expectations of an increase of 25,000, while the revised value last month was an increase of 42,600. Meanwhile, Australia's seasonally adjusted unemployment rate remained stable at 4.1% in September, unchanged from the revised value in August and below the expected value of 4.2%. The number of unemployed people decreased by 9,200 to 615,700. Strong US labor and inflation data provided support to the US dollar, thus easing expectations of aggressive easing by the Federal Reserve.

Daily chart analysis shows that AUD/USD once regained just above 0.6700. AUD/USD is testing the upper line of the descending channel. A successful break above the channel could signal a shift in momentum from bears to bulls. However, bearish sentiment still dominates, and the 14-day relative strength index (RSI) of technical indicators is still near the low 40s. On the downside, AUD/USD may first target the eight-week low of 0.6658 hit on Wednesday. A break below this level could lead to further declines, with the next target being the psychological support level of 0.6600. As for resistance, if it breaks out of the descending channel, it could target the 50-day moving average around 0.6749, followed by the key psychological level of 0.6800.

Today, consider going long on AUD before 0.6685, stop loss: 0.6670; target: 0.6720; 0.6730.

GBP/USD

GBP/USD retreated from recent highs, but remained above the key support level of 1.3000, as the US dollar rose sharply after the release of optimistic US data and the European Central Bank's rate cut. Mid-week, GBP/USD was weak, and after retreating in recent crowded fluctuations, GBP/USD fell below the 1.3000 mark to a near two-month low of 1.2977. UK CPI inflation data for September generally fell short of market expectations, as the speed and magnitude of inflation decline exceeded investors' initial expectations. As of September, the annual inflation rate fell from 2.2% to 1.7%, while the market expected 1.9%. UK inflation recorded the slowest annual inflation growth rate since May 2021, and concerns about a deepening economic slowdown continued to heat up, suppressing the pound. The contraction of the UK producer price index (PPI) data in September also exceeded expectations. The annual rate of producer price index in September fell sharply to -0.7%, lower than the expected -0.6%, and weaker than the previous value by 0.2%. The UK retail price index also hit its lowest level since April 2021, falling to 2.7% month-on-month, while the previous value was 3.5% and the expected value was 3.1%.

From the technical trend of recent weeks, as long as the US dollar bulls dominate in the second half of this week, GBP/USD will be in a state of decline for the third consecutive week. GBP/USD has fallen nearly 3.5% since hitting a multi-month high near 1.3434 in September. The fall below 1.3000 to a near 2-month low of 1.2977 is the final wake-up call for GBP bulls. If the pair fails to effectively re-enter the psychological 1.30 level in the short term, GBP/USD will continue to test 1.2958 (61.8% Fibonacci retracement of 1.2665 to 1.3434), and a break will point to 1.2904 (120-day moving average) and 1.2900 (market psychological level). As for the upside, GBP/USD needs to re-enter 1.30 before it can further rebound to 1.3049 (50.0% Fibonacci retracement) and 1.3091 (55-day moving average) levels.

Today's recommendation is to go long GBP before 1.2996, stop loss: 1.2980, target: 1.3040, 1.3050

USD/JPY

The yen is struggling to capitalize on its modest intraday gains against the dollar. Uncertainty about the Bank of Japan's rate hike plans and a positive risk tone have weakened the yen. Bets on a small rate cut by the Federal Reserve have kept the dollar high and also provided support for USD/JPY. In Asian trading on Thursday, USD/JPY fell to around 149.40 despite a stronger dollar. US economic data showed that the economy is resilient, with inflation rising slightly more than expected in September, prompting traders to cut bets on further large rate cuts from the Federal Reserve. This in turn may boost USD/JPY. Nevertheless, continued geopolitical risks and an uncertain outlook for the US election may boost safe-haven flows, benefiting the yen. Data released by the Ministry of Finance on Thursday showed that Japan's exports recorded -1.7% year-on-year in September, compared with a revised -5.5% in August. Meanwhile, imports rose 2.1% year-on-year in September, compared with 2.3% in the previous month. Both figures came in below expectations. Investors await the nationwide Consumer Price Index (CPI) data for September, due on Friday, for fresh impetus. Meanwhile, the challenges faced by the Bank of Japan in normalizing policy amid uncertainty over the direction of monetary policy under the new political leadership could prevent yen upside in the short term.

The daily chart shows that USD/JPY is on a steady upward trajectory, although it maintains a neutral upward bias. While technical signals suggest that buyers are in control, USD/JPY trades in a tight range above 150.00 (a psychological barrier in the market) after briefly rising above it. At this stage, despite the bullish bias, the technical indicator 14-day Relative Strength Index (RSI), while currently in the positive 62 zone, has unfortunately failed to surpass the previous peak above the upper 65-67 zone, suggesting that the uptrend may be overshooting. Once USD/JPY falls below 149.00, the conversion line in the 148.55-148.50 zone becomes the first line of defense for bulls. And it pushed USD/JPY below the 148.00 round mark, falling to the swing low of 147.35-147.30 last week. On the contrary, if USD/JPY rises above 150.00 and stabilizes above 150.00, it may pave the way for a move to the 100-day moving average of 150.91, followed by the 200-day moving average of 151.29.

Today, it is recommended to short before 150.35, stop loss: 150.50; target: 149.40, 149.20

EUR/USD

On Thursday, EUR/USD accelerated its bearish trend, approaching the key 1.0800 support level after the ECB's modest 25bp rate cut and the dollar continued to rebound. This week, EUR/USD continued to plummet, falling to an 8-week low of 1.0810. With the ECB widely expected to cut interest rates as the eurozone economy remains unilateral and cools, the euro is rapidly running out of room and is expected to continue to fall in the short term. At the same time, the US dollar continued to strengthen, pushing the US dollar index back above 103.50, a level last seen in early August, even as US Treasury yields fell across the cycle. The recent strength of the US dollar has been supported by the cautious tone maintained by Federal Reserve officials. Eurozone inflation, measured by the Consumer Price Index (HICP), fell to 1.8% year-on-year in September, below the ECB's target. Combined with stagnant GDP growth, this further strengthens the case for further ECB rate cuts. As the Fed and the ECB weigh their next moves, the outlook for EUR/USD will depend on macroeconomic trends. The US economy is expected to outperform the Eurozone, which could further boost the dollar.

From the daily chart, EUR/USD fell below the key support of 1.0872 of the 200-day moving average in the middle of the week. The 14-day relative strength index (RSI) of the technical indicator remained at a low of 27.34, indicating that the decline may continue, while the moving average convergence divergence is in an oversold state, indicating that EUR/USD is under significant bearish pressure. Further declines may bring EUR/USD to the market psychological barrier of 1.0800, followed by the August low of 1.0777 (August 1). On the upside, 1.0892 of the 134-day moving average and 1.0900 (market psychological level) are medium-term resistance. After further gains, EUR/USD will test the 89-day moving average level of 1.0952.

Today it is recommended to go long on Euro before 1.0815, stop loss: 1.0800, target: 1.0870, 1.0880.

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