US Dollar Index

The US dollar index maintained its upward momentum on Monday, with a four-day rebound. The dollar benefited from a strong S&P Services Purchasing Managers Index and the cautious attitude of Atlanta Federal Reserve Bank President Rafael Bostic. The dollar index remained above 104 in Asian trading on Monday, close to the three-week high of 104.30 hit last Friday. Last week, it was the first weekly gain this month. The market is waiting for the direction of Trump's reciprocal tariff policy to be announced on April 2. Combined with rising U.S. Treasury yields and Germany's relaxation of fiscal restrictions to boost the euro and then pull back, the dollar trend is cautiously balanced. The Trump administration plans to impose reciprocal tariffs on many countries on April 2, and the market's expectations of its scope and intensity will affect the dollar's trend. At the beginning of the year, investors expected Trump's pro-growth policies to boost the dollar, but his aggressive trade stance triggered recession concerns, putting pressure on the dollar this year. But it is still expected to recover from current levels. The market has quickly repriced the growth outlook for 2025. Economists lowered their US growth forecasts due to a sharp increase in tariff expectations, but believe that this is still good for the dollar.

The US dollar index broke through the 104 mark last week. If the tariff policy is mild and the US data is strong, the index may rise to 105; if the escalation of trade frictions triggers recession fears, it may fall back to 103. The trend of the US dollar depends on the details of the tariffs and the performance of US economic data this week. The progress of implementation will determine the sustainability of the US dollar's strength. The US dollar index shows early signs of recovery from the lows in March. The 14-day relative strength index (RSI) of the technical indicator of the daily chart is gradually rising, while the MACD shows that the downward momentum is weakening. The recent resistance level is 104.64 (20-day simple moving average). A break will point to the 200-day simple moving average level of 104.97. On the downside, the 20-day and 200-day simple moving averages form a bearish "death cross". 103.71 (9-day simple moving average) is the first target, then 103.20 (this year's low), and 103.00 (round mark) may be considered as bearish targets. If the market further abandons its long dollar position, even the 102.53 (76.4% Fibonacci retracement of 100.16 to 110.18) level is under consideration.

Today, consider shorting the US dollar index around 104.42, stop loss: 104.55, target: 103.95, 103.90

WTI spot crude oil

On Monday, international oil prices rose by more than 1% after US President Donald Trump announced that he would impose a 25% import tariff on countries that purchase oil and gas from Venezuela. Oil prices remained relatively stable during the Asian session on Monday, with US WTI spot falling to $67.90 per barrel. It achieved a second consecutive week of gains. Market sentiment tended to be cautious at the beginning of the week, as investors evaluated the ceasefire negotiations between Russia and Ukraine and future supply dynamics. The US delegation plans to hold talks with Russian officials on Monday, after having contacted Ukrainian diplomats on Sunday to seek a ceasefire in the Black Sea and a cessation of the wider conflict. If a ceasefire is reached in the Russia-Ukraine conflict, some sanctions on Russian crude oil exports may be eased, increasing global market supply. The current stable oil price reflects the delicate balance of long and short factors. Although the prospect of a ceasefire between Russia and Ukraine brings the risk of increased supply, OPEC+ production cuts and Iran sanctions provide bottom support for prices. In the short term, market uncertainty will dominate the trend, and investors need to pay attention to the results of Monday's negotiations and this week's US inventory data. If the ceasefire fails, oil prices may rebound due to geopolitical risk premiums, otherwise it is necessary to be vigilant about whether OPEC+ will adjust its strategy to deal with oversupply.

WTI crude oil prices rose by about 2% last week, the largest weekly increase since the first week of 2025, indicating that expectations of tightening supply dominate. However, the slight decline at the beginning of this week reflects the market's wait-and-see attitude towards the Russia-Ukraine negotiations. From the daily chart, the 14-day relative strength index (RSI) of the technical indicator is around 47, while the MACD bar is above the zero axis, but the DIF and DEA are below the zero axis and close to each other, indicating that the long and short forces are relatively balanced. The current crude oil price is in a volatile pattern, and the short-term trend is unclear. WTI oil prices may fluctuate between $66.07 (last week's low) and $70 (market psychological barrier) per barrel in the short term, depending on the progress of ceasefire negotiations and the implementation of OPEC+. If Russian supply returns significantly, WTI crude oil may fall to $67.07 (last week's low), and $65 per barrel; on the contrary, further restrictions on Iranian exports may push prices up to the market psychological barrier of $70, and the 100-day moving average of $70.54. Breaking through, the 200-day moving average of $72.51 is seen.

Today, consider going long on crude oil around 68.85, stop loss: 68.70; target: 70.00; 70.30

Spot gold

Gold prices fell for the third consecutive trading day as market sentiment improved due to news that reciprocal tariffs will be concentrated on some US trading partners. Gold/USD traded at $3012, down 0.30%. Gold prices extended their decline to around $3,020 an ounce in early Asian trading on Monday. After hitting a record high last Thursday, gold prices retreated slightly on hopes for a peace deal in Ukraine. However, potential rate cuts hinted by the Federal Reserve and continued economic uncertainty could limit gold's upside. U.S. and Russian representatives are expected to hold separate talks early this week. Optimistic progress around a ceasefire between Russia and Ukraine has curbed demand for gold, a traditional safe-haven currency. On the other hand, the prospect of further rate cuts could help limit losses for non-yielding gold. The Fed kept interest rates unchanged at its January and March meetings as it waited for further progress in deflation at the time. The U.S. central bank expressed concern about the high uncertainty in the economic outlook. Policymakers expect an average of two rate cuts by 2025, which was updated last week.

From the daily chart, gold prices are still trending upwards, although they have retreated sharply from their all-time high of $3,057.50 to $23,020. Therefore, buyers can focus on pushing gold prices above Friday’s opening level of $3,043, followed by the all-time high of $3,057.50, further towards $3,080 (200.0% Fibonacci retracement from 2956 to 2832). Otherwise, a correction is likely. Momentum remains bearish, as the Relative Strength Index (RSI) fell for the second consecutive day, clearing the previous high of the index. This suggests that bears are in control. If gold prices fall below $3,020, the next support will be $3,000 (a psychological level in the market). Once it breaks through, the next focus will be $2,982 (last week’s low), and further downward to test the $2,945.00 (50.0% Fibonacci retracement from 2,832.50 to 3,057.50) level.

Consider going long on gold before 3,008 today, stop loss: 3,004; target: 3,030.00; 3.035.00

AUD/USD

AUD/USD gained momentum around 0.6280 during early Asian trading on Monday. The Australian dollar edged higher as the Reserve Bank of Australia maintained high interest rates and the Australian economy benefited from expected Chinese stimulus. The RBA will keep interest rates unchanged next month after cutting borrowing costs for the first time in February, ending four years of high interest rates. Last week, RBA Assistant Governor (Economics) Sarah Hunt reiterated the central bank's cautious approach to rate cuts as they want to see more evidence that inflation is under control. In addition, new stimulus measures from the Chinese government have boosted the economic outlook for Australia, a major trading partner of China. The Australian dollar is expected to begin a gradual recovery in the second quarter, first driven by a weaker US dollar and then by the lagged impact of Chinese stimulus in the second half of 2025. The US dollar has fallen as US President Trump's trade policies have raised concerns about a slowdown in the US economy.

Last week, AUD/USD continued to move downward and hovered near a 3-week low of 0.6258, with bearish pressure dominating the market during the day. The pair remains firmly below the 20-day (0.6301) and 100-day (0.6334) simple moving averages, confirming the deterioration of the technical structure. The technical indicators of the daily chart, the Moving Average Convergence/Divergence (MACD) indicator, showed a new red bar, while the Relative Strength Index (RSI) fell sharply to 44 before rebounding slightly above 47, still in negative territory. Both signals point to the continued downward bias of momentum. In terms of key levels, immediate support is around 0.6258 (last week's low) and 0.6234 (March 5 low), and a break below this level may trigger further declines to 0.6200 (round mark). On the upside, resistance is seen around 0.6334100-day simple moving average, followed by more significant resistance at 0.6391 (March 17 high), where the pair could face selling pressure.

Consider going long AUD before 0.6270 today, Stop Loss: 0.6260; Target: 0.6320; 0.6330.

GBP/USD

The British pound pared some of its early gains against the US dollar on Monday, with the early week sentiment optimistic as snapshot Purchasing Managers Index (PMI) data from both sides of the Atlantic were mixed. GBP/USD continues to show some resilience below the 1.2900 round-figure mark and attracted some bargain-hunting buying in the Asian session on Monday. Spot prices are currently trading in the 1.2920 area and currently appear to have ended a two-day losing streak from a 1-and-a-half-week low hit on Friday. The US dollar started the new week on a weaker note, pausing a three-day rally from multi-month lows, which was seen as a key supportive factor for GBP/USD. Despite the Fed raising its inflation forecasts, investors seem to believe that the tariff-driven slowdown in the US economy could force the central bank to resume its rate-cutting cycle soon. This, coupled with the positive trend in US stock index futures, seems to have weakened demand for the safe-haven dollar. On the other hand, the British pound was supported by the relatively hawkish stance of the Bank of England. In fact, the Bank of England warned against assuming a rate cut and also raised its forecast for the peak of inflation this year. This provided additional support to the GBP/USD pair.

Last week, GBP/USD fell to close to 1.2900 (round mark) after failing to break through the four-month high of 1.3000 the previous day. GBP/USD bulls took a breather as the 14-day relative strength index (RSI), a technical indicator on the daily chart, plunged to around 60.00 last week from overbought levels above 71.30. However, this does not mean the bullish trend is over. Once the momentum oscillator cools down and approaches 60.00, the upward trend may resume. The 20-day and 50-day moving averages of 1.2860 and 1.2799 formed a "golden cross" to multiple patterns last week, indicating that the overall trend is bullish. Looking down, 1.2700 will serve as a key support range for the currency pair. Looking up, 1.2972 (Friday's high) and 1.3000, the market psychological level) rise, indicating that the overall trend is bullish. A break further points to the 1.3048 (November 6 last year high) level.

Today, we recommend going long on GBP before 1.2910, stop loss: 1.2900, target: 1.2960, 1.2965

USD/JPY

USD/JPY surged on Monday, breaking above the 150.00 mark for the first time since early March, as fading tariff concerns and surging US Treasury yields pushed the major currency up more than 0.81%. The yen fell against the dollar for the third consecutive day on Monday and weakened further to around 150 on the weak March Purchasing Managers' Index (PMI). Apart from this, the generally positive sentiment in the stock market is seen as another factor weakening the safe-haven yen. However, strong wage growth could affect the broader inflation trend, supporting the case for further rate hikes, which may prevent yen shorts from making aggressive bets. In addition, the narrowing of the interest rate gap between Japan and other countries should help limit the yen's deeper losses. At the same time, the prospect of further easing by the Federal Reserve failed to help the dollar take advantage of the rebound from the multi-month lows hit last week and may limit the gains of USD/JPY.

From a technical perspective, USD/JPY broke through key resistance levels on Monday: first the baseline of 149.47 and then the psychological market level of 150.00. Buyers are gathering momentum, as shown by the 14-day relative strength index (RSI) on the daily chart breaking above the 50 neutral line, which suggests that bulls may push the price through the key strong resistance level. The 200-day and 50-day simple moving averages converge at 151.77/151.78, acting as a key ceiling and likely to be tested in the near term. If broken, the next important resistance level will be the round number of 152.00. Conversely, if USD/JPY falls back below 150.00, the immediate support will be Monday's Asian session low around 149.30, which may protect the immediate downside before 149.00. Next comes the support level of 148.60 (14-day moving average), which, if broken clearly, may put USD/JPY at risk of accelerating its decline.

Today's recommendation is to short the US dollar before 150.85, stop loss: 151.00; target: 149.80, 149.70

EUR/USD

The EUR/USD pair continued to retreat in trading after the European close on Monday, last trading in the 1.0800 area. The pair remains in a corrective phase after a strong March rally, with technical signals now favoring further downside pressure. The latest price action marks the fourth consecutive day of decline, suggesting that bulls are now exiting the market. The EUR/USD pair has also benefited from improved risk sentiment as the White House revises its tariff strategy ahead of its implementation on April 2. However, the euro faces headwinds as markets worry that Trump's reciprocal tariffs could significantly hinder economic growth in the eurozone. Last week, European Central Bank President Christine Lagarde warned that Trump-led trade disputes pose downside risks, and Germany, as one of the United States' major trading partners, is expected to bear the brunt of Trump's reciprocal tariffs. The German Bundestag has approved measures to expand the borrowing ceiling, injecting billions of euros into the economy, which could help mitigate the potential impact of US tariffs. This supports the euro exchange rate to stabilize.

As the EUR/USD pair fell from a near six-month high of 1.0955 last week, it once fell below 1.0800 and remained in a downward state for the fourth consecutive day. After a strong rebound earlier, the pair has fallen more than 1% last week, with momentum indicators on the daily chart now flashing bearish signals. However, structural support remains solid, with key moving averages aligned below current price levels. While the 14-day relative strength index (RSI) has retreated sharply in positive territory and is now hovering around 60, suggesting fading bullish momentum. Meanwhile, the moving average convergence/divergence (MACD) has turned around, showing a new red bar, confirming fading momentum in the short term. From a broader perspective, a bullish “golden cross” between the 100 and 50-day simple moving averages formed last week, creating solid technical support around the 1.073 (21-day simple moving average), and 1.0700 (round number) areas. This development helps cushion downside risks even if sellers continue to pressure the pair in the near term. On the upside, resistance now lies at the 1.0900 mark, and if buyers regain control, further gains to the March 18 high of 1.0955 are possible.

Today it is recommended to go long on Euro before 1.0785, stop loss: 1.0770, target: 1.0840, 1.0850.

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