Dollar Index

The dollar index rebounded above 99.90 on Thursday, ending a three-day losing streak as fiscal concerns weighed on sentiment. Investors have grown increasingly uneasy about Trump's proposed budget, which includes broad tax cuts and is expected to add $3 trillion to $5 trillion to the national debt. However, the bill has run into political headwinds as several blue-state Republicans have warned they will not support it unless it includes greater state and local tax relief. The dollar faced further pressure from a lackluster 20-year bond auction, which indicated weakening demand for U.S. government bonds and heightened concerns that foreign and domestic investors may be pulling out of U.S. assets.

The dollar index cracked under pressure and began to look very bleak. In midweek trading, the dollar index extended its decline below the previous day's significant support of 100.22, breaking the 100.00 threshold, which led to a sharp drop to a near two-week low of 99.34. On the upside, the broken ascending trendline and 100.22 level are the first resistance area for the US dollar index during the September-October period. Further up, 100.00 {market psychological barrier} is the first important resistance level. This area is further reinforced as strong resistance at 100.38 {14-day simple moving average}. If the US dollar bulls push the US dollar index further up, the key level of 101.35 {50-day simple moving average} will come into view. If the downward pressure continues, a sharp decline may occur, targeting 99.34 {Wednesday's low}, and a breakout points to the year-to-date low of 97.91 and the key level of 97.73.

Today, consider shorting the US dollar index around 99.99, stop loss: 100.10, target: 99.50, 99.40

WTI spot crude oil

WTI crude oil prices retreated slightly to around $60.70 per barrel on Thursday, as the market re-emerged concerns about oversupply due to rising US crude oil inventories. The U.S. Energy Information Administration reported that crude oil inventories increased by 1.328 million barrels last week, contrary to expectations of a 1.85 million barrel decrease. Gasoline and distillate inventories also rose, contrary to expectations of a decline. Oil prices were further pressured by the overall sell-off in financial markets due to concerns about the growing US deficit. At the same time, investors are closely watching geopolitical developments ahead of the fifth round of nuclear talks between the United States and Iran this weekend. These talks helped ease concerns about potential supply disruptions in the Middle East after media reports on Wednesday that Israel could launch an attack on Iranian nuclear facilities.

WTI crude oil prices may retest the resistance level of $64.00 {Wednesday's high} before hovering below this level or starting a correction. The resistance level is identified at $64.00 {Wednesday high}. This resistance level is reinforced by the $65.46 {75-day simple moving average} resistance level. Despite the gap on May 21, the market is more likely to pause near these resistance levels rather than break through them. Technical indicators, including the MACD indicator, show a weakening of short-term momentum. However, from the 14-day relative strength index (RSI), the current value is 49.50, which is in the neutral zone and does not show obvious overbought or oversold signals. Therefore, the support level is at the $60.54 {20-day simple moving average} area level, and a break below this level can fall to $60.00 {market psychological level}, and $59.57 {May 9 low}.

Consider going long on crude oil near 60.50 today, stop loss: 60.30; target: 62.00; 62.20

Spot gold

Gold prices fell nearly 1% to a low of around $3,275 an ounce, ending a three-day rally as traders took profits and a stronger dollar affected market sentiment. The dollar's rebound reduced gold's appeal as a safe-haven asset, although potential concerns about U.S. fiscal policy continue to support long-term demand. Moody's recently downgraded the U.S. sovereign credit rating by one notch, citing its $36 trillion debt burden. Market participants are also cautious about the possibility that President Trump's proposed tax cut bill, if passed, could lead to a larger deficit. The bill has advanced in Congress, raising concerns about more debt-financed spending. Meanwhile, Chinese customs data showed that gold imports surged 73% in April to an 11-month high of 127.5 metric tons as demand rose and Beijing expanded import quotas during heightened trade tensions with the United States.

From the daily chart analysis, spot gold is at a key technical node. The price has broken through the $3,289.50 {20-day simple moving average} and found support at $3,300 {market psychological level}. In the MACD indicator, the MACD value is -22.61, indicating a weakening of short-term momentum. However, the price remains above the long-term rising trend line, indicating that the medium- and long-term bullish pattern has not been broken. From the 14-day relative strength index (RSI), the current value is 57.10, which is in the neutral area and does not show obvious overbought or oversold signals. It is worth noting that the price encountered obvious resistance at the $3,360 level, forming a double top pattern, which may indicate an increase in short-term adjustment pressure. Once the $3,360 level is broken, it will directly target the $3,400 integer level. At the same time, the support at the $3,289.50 {20-day simple moving average} has become a key defense line below. If it is lost, it may trigger a deeper adjustment to $3,253 {9-day simple moving average}, followed by the $3,200 integer level.

Consider going long on gold today before 3,290, stop loss: 3,285; target: 3,320; 3,325

AUD/USD

AUD/USD edged lower to below $0.6440 on Thursday, marking its second straight session of gains as the dollar came under pressure amid concerns about Washington’s fiscal direction and weak demand for Treasury bonds. Sentiment soured after President Trump’s proposed tax bill is expected to add more than $3 trillion to the national debt, raising concerns about potential financial instability in the world’s largest economy. Domestically, the Reserve Bank of Australia cut its cash rate to 3.85% earlier this week, in line with market expectations. The central bank delivered dovish comments, noting downside risks to the economy and muted inflationary pressures. In a positive sign for the currency, the Commonwealth Bank of Australia raised its forecast for the Australian dollar to $0.70 in the second half of 2025, although it also warned that heightened global volatility could lead to significant short-term moves.

AUD/USD traded above around 0.6400 on Thursday. The pair remains above the 9-day simple moving average of 0.6410, and the 14-day relative strength index (RSI) of the daily chart technical indicator remains above the neutral 50 level, both supporting continued upward momentum, reflecting a bullish tone, with immediate resistance at 0.6470 in the middle of the week. A break above this barrier could open up a test of 0.6500{round mark} and the six-month high of 0.6515 set on December 2, 2024. Initial support is at the 0.6400{round mark} level, followed by the 34-day simple moving average around 0.6366. A firm break below the above levels would weaken the short- to medium-term bullish outlook, potentially opening the way to 0.6300.

Today, it is recommended to go long on the Australian dollar before 0.6400, stop loss: 0.6390, target: 0.6450, 0.6460

GBP/USD

After rising earlier this week, the GBP/USD exchange rate stabilized around $1.3400 on Thursday, having briefly touched $1.3468, the highest level since February 2022, after the UK released higher-than-expected inflation data. The annual inflation rate accelerated to 3.5% in April, reaching the highest level since January 2024, exceeding the market forecast of 3.3% and the Bank of England's forecast of 3.4%, indicating continued underlying price pressures. In response, market expectations for further easing have changed, and the market now only expects another 25 basis point rate cut by the end of the year, and the probability of a rate cut in August has dropped from 60% to 40%. Earlier this month, the Bank of England made a 25 basis point rate cut decision among policymakers.

The upward trend of the GBP/USD pair continued as the pair hit a new year-to-date high. Momentum remains bullish, as shown by the 14-day relative strength index (RSI), a technical indicator on the daily chart, which has broken through the latest high of 60, leaving plenty of room for overbought conditions. That said, the first key resistance for GBP/USD will be 1.3468 {midweek high}, followed by 1.3500 {round mark}. If it breaks through, the next target will be the high of February 18, 2022, 1.3642. Conversely, if GBP/USD falls below the 1.3400 mark, GBP/USD may use Tuesday's low of 1.3335 and the 9-day simple moving average of 1.3322 as the main support area, followed by 1.3300 {round mark}.

Today, we suggest going long on GBP before 1.3410, stop loss: 1.3400, target: 1.3450, 1.3460

USD/JPY

The yen remained strong during the Asian trading session to a new high of 143.10, driven by optimistic machinery orders data released by Japan earlier on Thursday, which strengthened the case for further tightening by the Bank of Japan. In addition, safe-haven inflows are seen as another factor supporting the yen, and the dollar is generally weak, keeping USD/JPY near a two-week low. The comprehensive tax bill proposed by US President Trump has raised concerns about the fiscal health of the US government. In addition, tensions in US-China relations have aggravated investor sentiment and boosted demand for traditional safe-haven assets, including the yen. On the other hand, the dollar hovered near a two-week low against the backdrop of bets that the Federal Reserve may cut interest rates further and the deterioration of the US fiscal outlook.

From a technical perspective, USD/JPY's intraday gains on Thursday were above 144.40, but were blocked by the 34-day simple moving average {latest at 144.28}. The area near a convergence support point - 144.27 including the 50.0% Fibonacci retracement level of the 139.89 to 140.65 range should act as a key turning point. A sustained strong breakout could trigger short-term covering but could attract fresh selling around the 145.00 psychological mark. This should cap the spot price at the 145.27 {38.2% Fibonacci retracement} level, which, if decisively broken, could tilt the short-term bias in favor of bullish traders. Meanwhile, oscillators on the daily chart have just begun to gain negative momentum, suggesting that the path of least resistance for USD/JPY remains to the downside. However, acceptance below the 143.10 {Thursday low}, and 143.00 {round number} area could prompt some technical selling and drag the spot price closer to the next relevant support level of the 142.40-142.35 area towards the 142.00 mark.

Today, we recommend shorting the dollar before 144.25, stop loss: 144.45; target: 143.20, 143.00

EUR/USD

The euro retreated to just below $1.13 yesterday, supported by broad dollar weakness as market concerns over the US fiscal outlook intensified. The debate over the proposed US tax cut bill has heightened investor concerns that the budget deficit could deteriorate faster than expected. The dollar has been volatile. In Europe, the ECB's Financial Stability Report for May 2025 highlighted growing concerns about eurozone financial stability, pointing to escalating geopolitical tensions and persistent policy uncertainty. The ECB warned that a weak economic outlook and trade disruptions could have adverse effects on businesses and households, while new spending pressures - such as higher defense budgets - could challenge long-term debt sustainability. Earlier this week, investor sentiment was boosted by news that the EU and the UK had reached a preliminary agreement on key issues including defense and security cooperation, fisheries and youth mobility.

EUR/USD maintains a bullish bias. The pair has broken through the 9-day simple moving average of 1.1215 and is on track to hit a two-week high of 1.1362, surpassing the 1.1300 mark. The 14-day 1 relative strength index (RSI) on the daily chart shows that momentum is biased towards buyers. Therefore, the next resistance level for EUR/USD will be 1.1400. A break above this level will expose the April 29 high of 1.1421, followed by the April 11 high of 1.1473. On the bearish side, sellers need to pull the price below 1.1300. This will pave the way for a test of the daily low of 1.1217 on May 20, followed by the 9-day simple moving average level of 1.1215.

Today, it is recommended to go long on the euro before 1.1265, stop loss: 1.1253 target: 1.1330, 1.1340.

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