US Dollar Index

The dollar fell during the US trading session, as the challenger layoffs and unemployment claims rose ahead of the release of non-farm payrolls data on Friday. In France, Marine Le Pen took advantage of the momentum and tried to push the agenda ahead of President Emmanuel Macron's speech. The dollar index failed to close above the key level of 106.00 and was harshly rejected. This week, the dollar was supported by a weak euro and optimistic expectations for economic data. On the data side, the impact of two severe hurricanes and a large strike at Boeing faded, and the non-farm payrolls report was next in focus. In the short term, the dollar has released some of the correction pressure, trading on the defensive for the second consecutive day in the middle of the week amid a volatile lower US Treasury yields and a light news speech after Fed Chairman Powell's speech at an event hosted by The New York Times. The US dollar index remained subdued, around 106.00 in an environment of declining yields and further gains in risk assets. The US dollar index, which measures the value of the US dollar against a basket of currencies, fell below 106.00 at one point in the middle of the week, and saw slight profit-taking after sharp gains against many major G20 currencies this week. Profit-taking and weak ISM PMI appear to be the reasons for the dollar’s ​​weakness.

Looking at the daily chart, the US dollar index is facing a potential turning point as it approaches the 20-day simple moving average (106.35). Another effective break below this key level could worsen the short-term outlook for the index as it has lost some momentum recently. Technical indicators are sending mixed signals, with the 14-day relative strength index (RSI) still in bullish territory (latest around 54), but the moving average convergence divergence (MACD) showing red bars. Resistance levels of 106.92 (last Wednesday’s high), and 107.00 (round number) could pose challenges, and further moves could target 107.56 (Dec. 26 high). Support is expected at 105.45 (34-day moving average). The next level would be towards 105.00 (round number). Overall, while the US dollar index faces some headwinds, the bullish trend remains strong.

Consider shorting the US dollar index near 105.88 today, stop loss: 106.00, target: 105.50, 105.40

WTI crude oil

WTI oil prices retreated further from $70 as traders prepare for the OPEC+ production cut decision. OPEC+ needs to deliver more than market expectations to prevent oil prices from falling further. On Thursday, WTI oil prices continued to face some selling pressure for the second consecutive day and have now recovered most of their weekly gains. In the Asian session, WTI oil prices traded below $68.50. The market is worried that the slowdown in oil demand, especially in China, the world's largest importer, will further delay the production increase plan of OPEC+ until at least the second quarter of 2025. In addition, the worsening of the Russia-Ukraine conflict and the increase in tensions in the Middle East have kept the geopolitical risk premium alive, which may boost WTI oil prices. Meanwhile, signs of a US economic recovery and the expansionary policies of US President-elect Donald Trump, which will boost fuel demand, are expected to stop WTI oil prices from falling. The closely watched employment data will play a key role in influencing market expectations of the Fed's rate cut path. And bring new momentum to WTI oil prices.

Crude oil prices may be rising, driven by comments from President-elect Donald Trump and the market, which is beginning to see signs that OPEC+ production normalization may be delayed by six months. Given these factors, the OPEC meeting may turn into a "buy the rumor, sell the fact" moment. These drivers may soon fade and crude oil prices will turn the other way. On the upside, $68.81 (20-day moving average) is the first target, then, $69.80 (Uranium line in the horizontal channel), and psychological pressure near $70.00 are the other two major resistance levels. On the other hand, traders need to set their sights on the $67.12 level (May and June 2023 holding prices) to find the first support. The next level is this month's low of $66.61. The ultimate target is the low so far in 2024 at $64.75.

Consider going long on crude oil near $68.10 today, stop loss: 68.00; target: 69.30; 69.50

Spot gold

Gold prices continued to struggle in a narrow range around $2,640 on Thursday, halting a rally sparked by a speech by Federal Reserve Chairman Jerome Powell. The focus now is on warming up ahead of the important non-farm payrolls data. Gold buyers appear to be cautious again as the dollar and U.S. Treasury yields recovered from overnight declines triggered by Powell's optimistic comments on the U.S. economy at the New York Times DealBook Summit. His comments pushed Wall Street indices to new highs, increasing hopes of a "soft landing", weighing on the safe-haven dollar while boosting gold prices. However, Powell's comments failed to change market expectations for a 25 basis point rate cut later this month, which hit US Treasury yields across the yield curve hard, helping gold prices rebound. Overall market sentiment will play a key role in gold price movements, but traders may avoid making new directional bets on gold ahead of the high-impact US labor market report released on Friday.

The daily chart shows that gold prices remain stuck between the short-term key 20-day simple moving average (2632.70) and 50-day simple moving average (2668.70). The technical indicator 14-day relative strength index (RSI) is around the 50 level, indicating a lack of clear directional bias. Last week's death cross still poses a threat to gold buyers. Recapturing the 50-day resistance level of $2,668.70 on a daily closing basis is crucial for buyers to confirm the rebound. The next relevant psychological resistance level is $2,700, and a breakout will test the November 25 high of $2,721. Conversely, gold sellers must find a foothold below the 20-day simple moving average at $2,632.70 to break the early-week swing low support of $2,621-2,622. Last week's low of $2,605, and $2,600 (psychological level) will be key lines of defense for gold buyers.

Consider going long gold before 2,627.00 today, stop loss: 2,623; target: 2,645.00; 2,650.00

AUD/USD

AUD/USD recovered the previous day's losses on Thursday, thanks to the increased selling bias ahead of the release of a key U.S. labor market report on Friday, which hurt the dollar. The Australian dollar remained under selling pressure on Thursday. Weak Australian economic data and rising expectations of an early rate cut by the Reserve Bank of Australia dragged the Australian dollar lower. In addition, market concerns that President-elect Donald Trump may impose tariffs on imports may weigh on the Australian dollar. Traders will focus on the US non-farm payrolls data for November on Friday. The Australian Bureau of Statistics reported that the Australian economy unexpectedly grew at a slower-than-expected 0.8% pace compared to the same period last year, compared to 1% in the previous quarter of this year. Economists estimate that GDP grew at an annualized rate of 1.1% in the third quarter. On a quarterly basis, the Australian economy grew by 0.3%, lower than the expected 0.4%, but higher than the previous 0.2%. The weak third-quarter GDP data boosted the Reserve Bank of Australia's dovish bets. Meanwhile, the slight rise in the US dollar also put pressure on the Australian dollar pair.

The Australian dollar traded weaker during the day. AUD/USD still maintains a bearish outlook, characterized by AUD/USD remaining below the key 25-day moving average (0.6519) on the daily chart. The 14-day relative strength index (RSI), a technical indicator, is located near 39.80 below the 50 midline, supporting a short-term decline. AUD/USD remains bearish, once again breaking below the 0.6400 (round mark), and 0.6399 (Wednesday's low) support area, may attract enough momentum to fall to the low of 0.6348 on August 5, 2024. On the upside, if AUD/USD breaks above the 9-day moving average of 0.6482, it may pave the way for 0.6500 (round mark), and 0.6519 (25-day moving average). If AUD/USD continues to break above the above levels, it may pave the way for hitting the high of the 34-day moving average of 0.6644.

Today, consider going long on AUD before 0.6438, stop loss: 0.6425; target: 0.6485; 0.6495.

GBP/USD

After peaking around 1.2770 on Thursday, GBP/USD has now given up some of its gains and retreated to around 1.2700 amid a steady decline in the US dollar. GBP/USD was mildly bullish in Asia on Thursday, holding above the 1.2700 mark. However, GBP/USD lacked bullish momentum and still encountered resistance at the one-week high (1.2737) hit on Monday. The US dollar continued to consolidate as traders chose to wait and see ahead of the release of the US non-farm payrolls report on Friday. This was therefore seen as a key factor boosting GBP/USD. Nevertheless, the Fed's dovish policy outlook triggered a slight rebound in US Treasury yields, boosting the US dollar. In addition, speeches by some key Fed officials, including Fed Chairman Jerome Powell, on Wednesday indicated that the US central bank will take a cautious stance on rate cuts. This led to a slight recovery in US Treasury yields, boosting the US dollar. Apart from this, the continued geopolitical risks due to the worsening Russia-Ukraine conflict and trade war concerns also provided further support to the safe-haven US dollar.

GBP/USD rebounded all the way to 1.2770, the highest since November 12, after the mean retraced to the 34-day moving average near 1.2697. But GBP/USD may repeatedly adjust downward again as its outlook remains bearish with all short- to long-term moving averages sloping downward. The 14-day relative strength index (RSI) rebounded after being oversold. However, the downtrend remains. Looking down, the pair is expected to find a buffer near 1.2700, and 1.2697, with the next level pointing to 1.2669 (9-day moving average). On the upside, the first target is at 1.2800 (market psychological level), and then the 200-day moving average near 1.2820 will become a key resistance.

Today, we recommend going long on GBP before 1.2735, stop loss: 1.2725, target: 1.2790, 1.2795

USD/JPY

USD/JPY fell slightly as the dollar weakened after a surge in U.S. initial jobless claims in the week ended November 29. The yen has been weak as BoJ Nakamura doubts the sustainability of wage growth. Investors await U.S. NFP data for new interest rate guidance. The yen rose against the dollar during the Asian session on Thursday, rebounding from a one-week low hit the previous day. Signs that Japan's headline inflation rate is gaining momentum continue to fuel expectations that the Bank of Japan will raise interest rates again in December. In addition, continued geopolitical risks, trade war concerns and a drop in U.S. Treasury bond yields overnight also further favored the low-yielding yen. That said, hawkish comments from several influential FOMC members on Wednesday, including Fed Chairman Jerome Powell, boosted U.S. Treasury yields and the dollar. This, coupled with the market's continued risk appetite, could prevent the safe-haven yen from gaining noticeably and boost USD/JPY. Traders may also refrain from aggressive directional bets ahead of the release of US non-farm payrolls data on Friday.

From a technical perspective, USD/JPY remained resilient below its 50-day moving average (151.17) at the start of the week before recovering from its lowest level since September 30 (141.65), supporting the prospect of further gains. Nevertheless, oscillators on the daily chart remain in negative territory and are far from oversold. This, in turn, suggests that any break above the overnight range high (151.23) could face resistance around 151.98 (200-day moving average). This should constitute a key pivot level. If the strength continues, it would suggest that the recent consolidation decline from the multi-month highs reached in November has ended and the market favors the bulls. On the other hand, if USD/JPY remains weak after breaking below the psychological 150.00 level, it seems to have found suitable support around the 149.55-149.50 horizontal area. The next relevant support is around the 149.00 mark, and then the 100-day moving average, currently around 148.83. A sustained break below this support level will re-start the bearish trend for USD/JPY, which will fall to the 148.10-148.00 area.

Today, it is recommended to short the US dollar before 150.30, stop loss: 150.50; target: 149.30, 149.20

EUR/USD

On Thursday, the euro rose for the third consecutive day against the dollar, helped by continued selling pressure on the dollar and cautious sentiment ahead of the release of the US non-farm payrolls report on Friday. The euro rose further against the dollar during the week, extending the gains recorded in the previous session and breaking through the 1.0500 mark. The recovery in the euro against the dollar eased pressure from recent lows, partly due to a weaker dollar and reduced political uncertainty in France, even though French Prime Minister Michel Barnier is likely to lose the upcoming no-confidence vote. Federal Reserve Chairman Jerome Powell spoke cautiously, suggesting that further rate cuts may not be needed at this time. This eased market speculation about further easing in December and provided some stability to the dollar. On the other hand, the trade policies proposed by former US President Donald Trump may inject new uncertainty into the market. The introduction of further tariffs may push up inflation in the United States, which may prompt the Federal Reserve to take a more aggressive stance. This situation may boost the US dollar and put pressure on the euro against the dollar and other risk assets.

From the daily chart, although the 14-day relative strength index (RSI) of the EUR/USD technical indicator shows a rebound trend, the technical side is still inclined to the downside, and the average directional index (ADX) shows a weak trend at 15. Therefore, the current key support levels include 1.0500 (round mark). If EUR/USD falls further, it may test 1.0478 (23.6% Fibonacci rebound level from 1.0937 to 1.0332). On the upside, the recent resistance is at 1.0609 (weekly high since November 20), and then 1.0634 (50.0% Fibonacci rebound level). Stronger resistance is at 1.0700 (round mark), and 1.0705 (61.8% Fibonacci rebound level).

Today it is recommended to go long on Euro before 1.0572, stop loss: 1.0558, target: 1.0630, 1.0650.

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