Dollar Index

The dollar index rose to 99.62 on Tuesday, supported by a temporary easing of trade tensions. The move came shortly after President Trump announced on Sunday that he would delay the implementation of 50% tariffs on EU imports, pushing the original June 1 effective date to July 9. Market attention is now focused on the upcoming Senate debate on Trump's broad tax cut and spending bill, which is expected to significantly expand the national debt. According to the Congressional Budget Office, the proposed measures could add about $3.8 trillion to the federal government's $36.2 trillion debt over the next decade. Trump's decision to postpone the date of 50% tariffs on EU imports to July 9 further weakened the dollar. The move pushed the euro to a one-month high and put additional downward pressure on the dollar. The dollar rose the most against the yen after reports that Japanese authorities may intervene to stabilize the bond market, possibly by reducing bond issuance, and the recent sell-off has caused yields to hit a record high.

The US dollar index remains under pressure due to the interweaving of fiscal concerns, Fed policy uncertainty and geopolitical risks. The US dollar index continued to weaken at the beginning of this week, with a low of 98.69. On Tuesday, the US market reopened after the holiday, and the US dollar index rebounded above 99.60. On the other hand, from the 4-hour chart, the US dollar index continues to fall. The price has broken through multiple support levels, and the upper 50-hour {99.83}, and 200-hour {99.81} simple moving averages constitute significant upward pressure. A descending trend line highlights the bearish momentum, and higher lows and lower lows further strengthen this trend. The key levels to watch are: the immediate support level is close to 99.00 {round mark}. If it falls below, further downside may point to 98.50, and 97.91 {lowest since 2022}. In addition, 99.83, and 99.81 are the first resistance positions, followed by the market psychological level of 100.00.

Consider shorting the dollar index around 99.70 today, stop loss: 99.85, target: 99.30, 99.20

WTI spot crude oil

WTI crude oil fell to around $61.00 per barrel on Tuesday, affected by concerns about further increases in OPEC+ supply. The group will meet later this week and may finalize its production target for July, with reports showing a potential increase of 411,000 barrels per day. Earlier this month, OPEC+ agreed to accelerate oil production increases for the second consecutive month in June. However, losses were limited after U.S. President Trump announced that trade talks with the European Union would be extended until July 9, easing concerns about tariffs that could curb fuel demand. Meanwhile, Iran refused on Monday to suspend uranium enrichment as part of a nuclear deal with the United States, just days after Trump suggested that a deal might be imminent. Iranian President Masoud Pezeshkian also said that Iran would be fine even if the two sides could not reach an agreement. Failure of nuclear talks would mean continued sanctions on Iran, which would limit Iranian oil supply and support oil prices.

The decline in crude oil prices reflects that the market is evaluating the possible prospects of OPEC+'s production increase. However, in the short term, oil prices may remain volatile under the tug-of-war between bulls and bears. From the daily chart, the US WTI crude oil has recently shown a trend of high-level fluctuations and declines. The price has been blocked above $62 {market psychological barrier} and $62.50 {45-day simple moving average} for many consecutive days, indicating heavy pressure from above. The short-term moving averages of 10 days and 40 days show signs of death cross, and momentum indicators such as MACD dead cross operation, suggesting a weak short-term trend. If it falls below the short-term key support level of $60.00 {market psychological barrier}, the low of $58.37 on April 10 may become the focus. On the contrary, if there are positive factors to push oil prices to stabilize and rise, it will need to break through $62 {market psychological barrier} and $62.50 {45-day simple moving average} to reverse the weak pattern. And further challenge the 50-day simple moving average at the level of $63.04.

Consider going long on crude oil near 60.70 today, stop loss: 60.50; target: 62.00; 62.20

Spot Gold

Gold prices hit a low of $3,285 in Tuesday's trading as risk appetite and a strong dollar weighed on the precious metal. Gold prices extended their decline this week as the dollar gained some gains, demand for safe-haven assets cooled, and investors were also weighing the prospects of improved U.S.-EU trade relations after U.S. President Donald Trump agreed on Sunday to extend the deadline for 50% tariffs on the European Union to July 9. At the end of Asian trading, the strong dollar gained momentum as the Japanese Ministry of Finance said its bond issuance plan may be adjusted with a smaller issuance. This caused Japanese yields to plummet and the yen to depreciate against the dollar, triggering a dollar spillover effect on other major currencies. The strong dollar makes gold more expensive for most buyers and is therefore seen as resistance.

Gold prices face some downward pressure this week. The above resistance may be quite persistent as the dollar has experienced a long period of depreciation and is expected to recover at the expense of precious metals. Coupled with some possible positive signs in trade talks, the prospect of gold continuing higher could be dashed. On the upside, intraday support at $3,340 is the first level of concern, followed by resistance at last week's high of $3,365. Higher resistance opens the door at the round number mark of $3,400 and could see a further rise to $3,440, coinciding with the highs of May 6 and May 7. On the other hand, if gold prices fall, some thick layers of support may emerge. If the $3,300 mark is breached by effective selling pressure, initial support is found at $3,274.00 {10-day simple moving average}. Lower down, the technical key level is at $3,245 (April 11 high).

Consider going long on gold before 3,295 today, stop loss: 3,290; target: 3,320; 3,325

AUD/USD

The Australian dollar fell to around $0.640 on Tuesday, retreating from a six-month high reached in the previous session as investors took a risk-off stance on growing global economic and trade uncertainty. Markets continue to focus on fiscal developments in the United States and tariff policy adjustments under the Trump administration, which have led to increased market volatility. Traders are also preparing for key inflation data from Australia this week, which may be crucial in shaping the policy trajectory of the Reserve Bank of Australia. Last week, the RBA cut its cash rate to 3.85% as widely expected and hinted that further easing may be possible to respond to increasing economic headwinds and slowing inflation. The market is currently pricing in a 65% probability of another rate cut in July, with a total of 75 basis points expected by the first quarter of 2026.

AUD/USD continued to fall during the European session on Tuesday, trading around 0.6450. The bullish bias remains dominant as technical analysis on the daily chart suggests that the pair remains in an ascending channel pattern. Short-term price momentum remains strong as the AUD/USD pair is trading slightly above its 20-day simple moving average of 0.6433. Moreover, the 14-day relative strength index (RSI) is also comfortably above 50, suggesting sustained upward momentum. On the upside, the AUD/USD pair could test Tuesday’s high of 0.6495, and the 0.6500 {round number} area, further towards the six-month high of 0.6537, which was recorded on May 26. A successful break above this level could strengthen the bullish bias and take the pair closer to the upper boundary of the ascending channel, around 0.6620. On the downside, the 20-day simple moving average of 0.6433 will act as an immediate support, followed by the round number near 0.6400. A decisive break below these levels would weaken short- and medium-term price momentum and open the door for the pair to linger around 0.6363 {40-day simple moving average}.

Today's recommendation is to go long AUD until 0.6430, stop loss: 0.6420, target: 0.6480, 0.6490

GBP/USD

On Tuesday, the British pound showed some strength against most major currencies, except for a pullback against the US dollar, as traders became increasingly confident that the Bank of England's monetary expansion cycle will be more dovish than the policy statement earlier this month guided. GBP/USD continued to appreciate against the US dollar, while the US dollar weakened, as concerns over the US debt problem intensified. Driven by improved market sentiment after US President Trump postponed 50% tariffs on the European Union until July 9. The delay boosted global risk appetite and supported the British pound, which had risen on the back of strong domestic data. UK retail sales rose 1.2% in April, the fourth consecutive month of growth, showing consumers' resistance to tax increases and trade tensions. However, inflation remains stubbornly high at 3.5%, exceeding expectations. The market now sees a 50% chance of a rate cut by the Bank of England before August, with another cut likely by the end of the year.

The strong performance of the pound is mainly supported by a weaker dollar and positive UK economic data, and the technical momentum remains strong. But overbought signals are worth being vigilant. From a technical perspective, the recent trend of GBP/USD has shown a unilateral upward trend. The daily chart shows that all major moving averages (50/100/200-day moving averages) have been broken, and the moving averages are in a bullish arrangement, indicating that the medium- and long-term trend is still bullish. However, the 14-day relative strength index (RSI) of the technical indicator is still above 50, indicating a moderately strong trend. Therefore, in the short term, the currency pair may try to retest 1.3620 {February 22, 2023 high}, and the high of 1.3643 on February 10, 2022, followed by the peak of 1.3750 on January 13, 2022. Short-term support focuses on the psychological level of 1.3500. If it falls below, it may further fall to 1.3450 (previous high conversion support).

Today, it is recommended to go long on the pound before 1.3500, stop loss: 1.3485, target: 1.3550, 1.3560

USD/JPY

The yen weakened to above 144 yen per dollar on Tuesday, falling sharply to a four-week high as domestic bond yields fell and the government reportedly plans to reduce ultra-long bond issuance to curb rising yields. The move also led to a general decline in U.S. Treasury yields, while the dollar regained some strength. The Japanese Ministry of Finance is reportedly considering revising its bond issuance strategy for this fiscal year, including possible cuts in 20-year and 40-year debt supply. The reassessment came after a 20-year bond auction held last week was met with a cold reception, which recorded the weakest demand in more than a decade. Investors are now turning their attention to the upcoming 40-year bond auction. Meanwhile, Bank of Japan Governor Kan'ya Ueda reiterated that the central bank will "adjust the degree of monetary easing as needed" to ensure that inflation targets are achieved. He also pointed out that there are upside risks to core inflation driven by high food prices, reinforcing expectations of further monetary policy tightening.

From a technical perspective, oscillators on the daily chart of USD/JPY remain in negative territory and are still far from the oversold zone. This, in turn, supports the prospect of further short-term depreciation of USD/JPY. Therefore, any further gains may face strong resistance in the 144.50 area, after which USD/JPY may recapture the 145.00 mark. A sustained strong break above the latter may pave the way for a further rebound, although gains may still be seen as selling opportunities around the 144.80 area and limited around the 145.00 psychological level. On the other hand, the 143.24 {61.8% Fibonacci retracement of 139.89 to 148.65}, and 143.00 {round number} levels may curb immediate downside before the 142.50-142.45 area. Meanwhile, short traders may wait for a sustained breakout and confirmation below the 142.00 mark before making new bets. USD/JPY may then slide to the intermediate support of 141.55, moving towards the 141.00 round mark.

Today, it is recommended to short the US dollar before 144.55, stop loss: 144.75; target: 143.50, 143.20

EUR/USD

EUR/USD corrected to near 1.1330 during Tuesday's European trading session, after retesting the monthly high of 1.1420 the previous day. The major currency pairs faced selling pressure and the US dollar strengthened due to the progress of a potential trade deal between the United States and the European Union. During Tuesday's trading session, EUR/USD traded in the positive zone around 1.1330-40. The euro rose against the US dollar to its highest point since late April at 1.1420 after US President Trump postponed the 50% tariff on Europe. Reuters reported on Sunday that Trump announced a delay of EU tariffs until July 9 after a call with European Commission President Ursula von der Leyen. The move provided some relief to the market and provided some support for the euro against the dollar. Trump's so-called "Big Beautiful Bill" is expected to add about $3.8 trillion to the federal government's $36.2 trillion debt over the next decade. This has heightened concerns about the growing U.S. national debt and continues to undermine market confidence in U.S. assets, including the dollar. July 9 marks the end of a 90-day pause in tariffs imposed on the EU by Trump on April 2, "Liberation Day." Any signs of escalating trade tensions could put pressure on the euro against the dollar.

At the beginning of the week, the euro continued its rebound against the dollar on Friday, hitting 1.1420 in the Asia-Europe session, a one-month high, and then fell back slightly to around 1.1320. From a technical perspective, the euro has recently shown a volatile upward trend against the dollar, but the key resistance level has not yet been effectively broken. The daily chart shows that the currency pair encountered strong resistance near 1.1420. If EUR/USD breaks above 1.1420 in the future, the next resistance level will be 1.1500 (round mark), and if it breaks, it will point to the high of 1.1574 on April 21. If it fails to stand above 1.1420, sellers will need to test lower prices, and the next key support level will be 1.1300 (round mark), and then it can point to the 20-day simple moving average level of 1.1271.

Today, it is recommended to go long on the euro before 1.1315, stop loss: 1.1300 target: 1.1365, 1.1380

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