US Dollar Index

The dollar index, which measures the value of the greenback against a basket of currencies, rose on rising inflation concerns, and a stronger-than-expected non-farm payrolls report pushed up the Federal Reserve's timetable for rate cuts, spurring demand for the dollar and pushing the dollar index to a nearly two-year high. of 109.97. Currently, the index is trading firmly above 109.00, or its highest level since November 2022. Meanwhile, the prospect of slower rate cuts by the Federal Reserve has been a key factor in the recent surge in U.S. Treasury yields, continuing to provide a tailwind for the dollar. In addition, concerns about U.S. President-elect Donald Trump's tariff plans, geopolitical risks and a weaker risk tone were other factors supporting the safe-haven dollar. U.S. Treasury yields and the U.S. dollar temporarily consolidated at high levels. Several Fed officials spoke overnight. The U.S. economy is in “good” condition, but faces considerable uncertainty in its economic outlook and should formulate policies gradually and patiently. In the short term, the US dollar is expected to continue to consolidate at a high level, mainly because the US economic outlook is still better than that of other major countries, and the US Federal Reserve still has a relative advantage in the monetary policy differences with other major central banks. However, the possibility of a technical correction in the US dollar cannot be ruled out.

The U.S. Dollar Index surged to new highs not seen since November 2022 and is now approaching the 110.00 mark. The 14-week relative strength index (RSI), a technical indicator on the weekly chart, has risen to around the 72 level, which is in the overbought area, indicating a possible technical correction in the short term. Still, the dollar index’s breakout above previous resistance suggests bullish momentum is continuing on the back of solid economic data and easing Federal Reserve rate cut expectations. From a technical perspective, the nice bounce from the 107.55-107.50 low resistance-turned-support this week and the subsequent gains favor bullish traders. After breaking through the two-year high of 109.56 hit earlier. The dollar may accelerate its rise towards 109.97 (last week’s high), and 110.00 (market psychological level) areas. Momentum could further extend to 110.43 (upper Bollinger Band on weekly chart), and then to 111.15 (November 2022 high), and then 111.19 (76.4% Fibonacci rebound from 114.78 to 99.58) levels. On the other hand, the 109.00 (round number), and 108.97 (61.8% Fibonacci rebound level) areas may provide some support, below which the index may accelerate its decline to the 108.55 (weekly uptrend line) area, and then Reached the 108.00 mark level.

Today, you can consider shorting the US dollar index around 109.78, stop loss: 109.90, target: 109.35, 109.30

WTI spot crude oil

WTI oil prices rose more than 3% last week to hit a three-month high of $77.00 as traders braced for potential supply disruptions from the most extensive U.S. sanctions on Russian oil and gas revenues. Earlier, an unverified sanctions document circulated among European and Asian traders pushed oil prices up by more than 4%. WTI crude oil prices were supported last week by expectations of higher demand for heating fuels due to continued cold weather in the Northern Hemisphere. Likewise, much of Europe has been hit by severe cold and could face an unusually cold start to the year. The rise in oil prices has been attributed to growing concerns about supply disruptions due to tighter sanctions, coupled with low oil inventories and severe cold weather in the United States and parts of Europe. Oil prices also rose as concerns over supply disruptions grew amid ongoing geopolitical tensions. U.S. President Joe Biden is expected to announce new sanctions this week targeting Russia's oil revenues. In addition, uncertainty surrounding Trump's tough stance on Iran provided additional support for crude oil prices.

From the technical level of the weekly chart, WTI crude oil surged and broke through the upper track of the "Bollinger Band" at $75.66, and hit a three-month high of $77.00 before retreating to around $75.90. Within the bullish range. But it did not break through the resistance area formed by 76.90 (a trend line extending to the right from the high of 78.78 in August last year) and 77.00 US dollars (integer mark). If it can unexpectedly break through the upper range in the future, the next target will be $78.78 (last August high), and $79.86 (50.0% Fibonacci retracement from 93.98 to 64.75) levels. In terms of support, pay attention to the low of $73.80 in the U.S. market last weekend. Further down, look at last week’s low of $72.35. If it breaks, it will point to the $71.64 level (23.6% Fibonacci rebound level).

Today, you can consider going long on crude oil around 75.70, stop loss: 75.50; target: 77.00; 77.30

Spot Gold

Although stronger-than-expected U.S. jobs data toward the end of last week reinforced investors' expectations that the Federal Reserve may not cut interest rates significantly this year, uncertainty surrounding upcoming Trump administration policies has boosted gold's safe-haven appeal. Data showed that the U.S. added 256,000 jobs last month, while economists expected an increase of 160,000. The unemployment rate was 4.1% versus expectations of 4.2%. Gold prices fell as low as $2,663.09 an ounce. However, gold prices quickly rebounded to hit their highest level since December 12 and post a weekly gain of 2%. Gold prices continued to be supported by increased safe-haven demand last week, rising to a near one-month high of $2,698. Despite a light macroeconomic calendar, speculative interest maintained a cautious stance, leading to broad strength in safe-haven assets. This masked continued strength in the dollar and U.S. Treasury yields. Inflation concerns have intensified over the potential impact of U.S. President-elect Donald Trump's upcoming immigration and trade policies, boosting gold's appeal as an inflation hedge and traditional safe-haven asset. However, speculation surrounding Trump's policies is likely to continue to drive the market and serve as a major tailwind for gold prices heading into the weekend.

From a technical perspective on the daily chart, the bullish potential for XAU/USD is increasing. It has posted higher highs and higher lows for the fourth consecutive day while extending its rally above all moving averages. The 5-day simple moving average lacks directional strength near $2,661.70 an ounce while the 100-day SMA is approaching the shorter average with a bullish slope from below. The 14-day relative strength index (RSI), a technical indicator, remained above 60, proving the continued rise in gold prices. If gold prices close above the Dec. 13 high of $2,692, it could extend its multi-day rally and challenge the next upside barrier at the $2,700 round number and the Dec. 12 high of $2,726. The next key resistance is $2,790 (previous high). On the contrary, if the price of gold falls back below $2,661.70 (5-day moving average), it will push the price of gold to $2,633.30 (Bollinger center axis) and $2,633.00 (the low of the 7th of this month). If it falls below this level, the final bottom line for gold buyers is set at $2,600.00 (a psychological level in the market).

Today, you can consider going long on gold before 2,685.00, stop loss: 2,680.00; target: 2705.00; 2710.00

AUD/USD

Last week, AUD/USD continued its weak sideways trend and fell below the 0.6170 level since October 2022 to 0.6138. And it is likely to continue the downtrend that has been established against the backdrop of a bullish US dollar over the past three months or so. The dollar index is near a two-year high following the Federal Reserve's hawkish turn. In fact, the U.S. central bank expects only two quarter-point rate cuts in 2025 as inflation remains elevated in the world's largest economy. In addition, the minutes of the December US FOMC meeting showed that policymakers believed that labor market conditions were gradually easing and supported slowing the pace of interest rate cuts amid stagnant inflation. The outlook remains supportive as rising U.S. Treasury yields, combined with geopolitical risks and concerns about U.S. President-elect Donald Trump's tariff plans, have driven some safe-haven flows toward the dollar. On the other hand, rising bets that the Reserve Bank of Australia could cut interest rates as early as next month, coupled with a drop in Australia's core inflation, weakened the Australian dollar. Furthermore, China's economic woes suggest the path of least resistance for the Australian dollar is to the downside.

From a technical perspective, a break below the October 2022 swing low (around the 0.6170 area) to a new low of 0.6138 would be seen as a new trigger for bearish traders. That said, the 14-day relative strength index (RSI) on the daily chart has entered oversold territory (latest at 27.19), so it would be wise to wait for a short-term consolidation or a minor bounce before falling further. However, any attempted rebound might face immediate resistance near 0.6200 (round number), 0.6231 (20-day SMA), and above that at 0.6292 (30-day SMA) – 0.6302 (last week’s high). The area is attracting new sellers, which should limit AUD/USD's upside until 0.6300. However, any follow-through buying may allow the spot price to once again attempt to break above the 0.6300 mark and challenge the 50-day simple moving average at 0.6387. Nevertheless, AUD/USD is expected to continue its downward trend towards the 0.6130-0.6125 intermediate support level, which may eventually drag the spot price to the 0.6100 round number mark. The downside move could eventually drag the spot price to the 0.6000 psychological level.

Today, you can consider going long on AUD before 0.6130, stop loss: 0.6115; target: 0.6180; 0.6190.

GBP/USD

Before the weekend, GBP/USD had plummeted to around 1.2191, its lowest level in 14 months. GBP/USD came under intense selling pressure as the dollar rebounded following the release of US non-farm payrolls data, which showed that labor demand remained unexpectedly strong in December. GBP/USD extended its decline last week, with broad-based dollar strength and a sell-off in UK government bonds triggering a sharp drop in the pair. The 10-year gilt yield climbed to its highest level in 16 years, and the 30-year bond yield reached its highest level since 1998 in early trading on Thursday. And hit 1.2208, its lowest level since November 2023. The pair remains deeply in negative territory. The main reasons are market concerns about the UK's fiscal prospects and the impact of the strong US dollar. In the short term, we should continue to pay attention to several risks that are bearish on the pound, including: 1. The Bank of England may be more aggressive in its interest rate cut cycle than the Federal Reserve; 2. The UK economic growth slowdown is accelerating; 3. Energy prices are soaring; 4. The Federal Reserve is making policy changes. a slower pace of normalization and/or a prolongation of American exceptionalism. All of the above could weaken the performance of the pound.

GBP/USD hit a new year low of 1.2191 since November 2023 on Friday. GBP/USD weakened early last week after a brief recovery to around 1.2575, near the 20-day moving average (then at 1.2536). The 14-day relative strength index (RSI), a technical indicator on the daily chart, fell sharply to around 28.90 oversold, indicating strong bearish momentum. In the coming months, the pound is expected to come under renewed pressure as the Bank of England eases much more than markets expect; this could coincide with the fiscal tightening mentioned above. Looking down, the pair is expected to trade at 1.2140 (static level for November 2023). If it breaks, it will look towards 1.2100 (round mark), and continue to find support around the October 2023 low of 1.2036. On the upside, the first resistance could be found in the 1.2300 (psychological level), 1.2322 (Friday’s high) area, and then 1.2344 (23.6% Fibonacci rebound from 1.2788 to 1.2208).

Today, it is recommended to buy GBP before 1.2195, stop loss: 1.2185, target: 1.2250, 1.2260

USD/JPY

USD/JPY remained weak after hitting a six-month high of 158.88 last week following the release of the U.S. non-farm payrolls report, which saw the unemployment rate fall to nearly 4%. The pair closed slightly below 158.00. The USD/JPY exchange rate has continued to fluctuate slightly below 158 in the past month, and once reached 158.88, a nearly six-month high. Despite signs that inflationary pressures are building in Japan, investors remain skeptical about the possible timing of another rate hike by the Bank of Japan. Japan's Economy Minister Ryuichi Akasawa said on Friday that Japan's economy is at a "critical stage" in eliminating the public's deflationary mentality and shifting to a growth phase led by higher wages and investment. If the Bank of Japan can stabilize inflation at around 2%, it can achieve wage growth that exceeds inflation. In addition, the Fed's hawkish turn has led to a widening gap in U.S.-Japan yields, which has become another factor undermining the low-yielding yen. That said, cautious market sentiment, coupled with trade war concerns and ongoing geopolitical risks from Russia's protracted war with Ukraine, could support the safe-haven yen. Besides this, speculation that Japanese authorities may intervene in the market to support the currency may prevent yen bears from making aggressive bets. However, the decline in USD/JPY remains cushioned by the bullish sentiment of the US dollar.

From a technical perspective, short-term bias remains in favor of bullish USD/JPY traders, although recent range-bound price action makes it prudent to wait for some meaningful buying before positioning for any further gains. The 158.88 area, the 6-month high hit on Friday, could act as an immediate hurdle, beyond which USD/JPY could attempt to recapture the 159.00 round-figure mark. The momentum could extend further towards the daily Bollinger Band upper barrier at 159.57 and eventually the psychological level of 160.00. On the other hand, the daily Bollinger Band middle line around 156.98 may continue to protect the current downtrend. However, some follow-through selling could make USD/JPY vulnerable to accelerating lower towards 156.06 (25-day EMA), and the next relevant support around the 156.00 mark area. Next on the list is the 154.39 (lower Bollinger Band) barrier, which, if decisively breached, could shift the short-term bias in favor of bearish traders and pave the way for bigger losses.

Today, it is recommended to go short before 158.10, stop loss: 158.35; target: 157.30, 157.20

EUR/USD

EUR/USD remained under bearish pressure last week, falling below 1.0300 on Friday. The dollar benefited from an upbeat jobs report and forced the pair to remain weak heading into the weekend. EUR/USD closed in negative territory for the sixth consecutive week. In just five weeks it plunged about 4% to a 26-month low of 1.0213. The pair remains technically bearish in the short term. EUR/USD continues to come under selling pressure, with the U.S. dollar remaining broadly strong. The dollar benefited from risk aversion sparked by U.S. President-elect Donald Trump's tariff plans. The pair is hovering around 1.0250 during the weekend trading session, not far from the multi-year low of 1.0213 set on Friday. Several Fed officials have expressed caution about cutting rates, citing rising inflation and uncertainty over the incoming Trump administration. The Federal Reserve's move to delay rate cuts continued to boost the dollar and exert some selling pressure on major currency pairs. At this stage, EUR/USD is consolidating at a low level. On the other hand, the dollar was firm as President-elect Donald Trump is expected to declare a national economic emergency to provide legal basis for preparing import tariffs on the country's allies and adversaries.

Last week, EUR/USD fell further to 1.0213, its lowest level since November 2022, with the pair falling for six consecutive weeks, reflecting the overall negative tone in recent weeks. Sellers appear to be firmly in control, with any bullish attempts so far failing to produce a meaningful directional shift. Although the 14-day relative strength index (RSI), a technical indicator on the daily chart, is in the oversold zone at 28.30, its downward trajectory suggests a lack of confidence among buyers. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram has turned more bearish, showing rising red bars and pointing to an acceleration in negative momentum. In terms of key levels, immediate support appears at 1.0200 (round number), a break below which would expose a bottom around 1.0163 (November 11 2022 low), with the next level pointing towards 1.0100 (round number barrier). On the other hand, if EUR/USD manages to climb above 1.0265 (midline of the daily downtrend channel), the next level is 1.0312 (Friday's high), and above 1.0318 (5-day moving average) area, some selling pressure may be relieved. and opens the doors to the 1.0350 (14-day EMA) resistance area, where a more prolonged recovery attempt could occur.

Today it is recommended to go long on Euro before 1.0230, stop loss: 1.0215, target: 1.0280, 1.0290.

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