US Dollar Index

The US dollar index remained volatile around 99.00 on Tuesday, reversing the previous session's decline, as investors focused on the progress of US-China trade talks in London. Treasury Secretary Scott Bessant and other senior officials met with their Chinese counterparts on Monday to discuss rare earth exports and possible easing of export restrictions, and further negotiations are expected to continue on Tuesday. Hopes of a tariff truce between the world's two largest economies supported the dollar, which has been under pressure this year as President Trump's trade policies have weakened investor confidence in US assets. The market is also closely watching the upcoming Consumer Price Index and Producer Price Index reports later this week, which are expected to shed more light on inflation dynamics and the economic impact of the long-standing trade dispute. The dollar rose broadly, with the largest gains against the yen, euro and pound.

The US dollar index remains volatile below the psychological market level of 100.00, currently trading around 99.20. In addition, the 14-day relative strength index (RSI) on the daily chart is below the 50 level, and the market still maintains a bearish outlook. The US Dollar Index may fall towards the support level of 97.91, which is the lowest level since March 2022. At this stage, the US Dollar Index continues to be bearish, and the index remains within the downward channel pattern. Short-term price momentum is weak as the US Dollar Index is below the 20-day simple moving average of 99.60. On the downside, the 98.66, and 98.32 {last Friday and the fourth low respectively} areas can be watched. Then there is 97.91, which is the lowest level since March 2022, recorded on April 21. If the US Dollar Index rebounds further, it may lead to the emergence of a bullish bias, pushing the index to test the 20-day simple moving average of 99.60. A break above this level may enhance medium-term price momentum and prompt the US Dollar Index to explore the 100.00 psychological area.

Consider shorting the dollar index around 99.16 today, stop loss: 99.28, target: 98.70, 98.60

WTI spot crude oil

WTI crude oil retreated to around $63.90 a barrel on Tuesday, having earlier risen to its highest level in more than two months, $65.30, as investors await further news from the US-China trade talks, which could help mitigate the impact of tariffs on energy demand. High-level talks between US and Chinese officials began in London on Monday and are scheduled to continue today. Geopolitical tensions also continue to support oil prices, with slow progress in a ceasefire in the Russia-Ukraine war and uncertainty over the US-Iran nuclear deal complicating the situation. Meanwhile, Saudi Arabia recently called on OPEC+ to increase production by at least 411,000 barrels per day in August and possibly again in September, sparking concerns about potential oversupply.

From the recent trend, oil prices are facing the key price of $65.98 {100-day simple moving average}, which has been an important barrier many times before. The 14-day relative strength index (RSI) of the technical indicator of the daily chart is above the 60 level, and the market still maintains a bullish outlook. A strong break above this level may open up the upside to $66.00 {round mark} and $66.58 {April 4 high}, and is expected to retest $68.27 {200-day simple moving average}. On the downside, $63.26 {65-day simple moving average} is the first support level, followed by $62.08 {20-day simple moving average}, while the key $60.00 {city psychological mark} is the main support level.

Today, consider going long on WTI crude oil around 63.70, stop loss: 63.50, target: 65.50, 65.70

Spot gold

Gold prices stabilized around $3,320 per ounce on Tuesday, as investors await further developments in the ongoing US-China trade negotiations. High-level U.S.-China trade talks that began in London were expected to continue today as the two sides seek to cement a fragile truce in a dispute ranging from expanded tariffs to restrictions on rare earth elements. Easing trade tensions could boost the dollar and put pressure on commodity prices denominated in the greenback. "In the short term, if there is a positive outcome from the meeting, it may have a slightly negative impact on gold, but the impact will not be too great. On the other hand, the ongoing geopolitical risks in the Middle East may drive safe-haven inflows, supporting gold. Weekend data showed that the People's Bank of China increased its gold holdings for the seventh consecutive month in May. This in turn may contribute to gold prices. The People's Bank of China's gold reserves rose to 73.83 million ounces at the end of May, an increase from 73.77 million ounces at the end of April.

Gold prices retreated from last week's high of $3,403.50, and technical indicators show weakening bullish momentum. After failing to hold above the resistance range of $3,300–3,392, the price fell below the short-term market psychological support near $3,300, and a break will test the $3,260 {lower track support line of the daily equilateral triangle}, and the $3,265 {50-day moving average} area, followed by the $3,200 round number support level. On the upside, any rebound must break through the $3,353 {upper track resistance line of the equilateral triangle}, and $3,350.00 {May 27 high} area, area to re-establish bullish control. A breakout of this area will pave the way for the target of last week's high of $3,403.50, which remains the short-term target for gold bulls.

Consider going long on gold near 3,318 today, stop loss: 3,313, target: 3,340, 3,345.

AUD/USD

The Australian dollar remained above $0.6500 on Tuesday, supported by optimism about progress in high-level trade talks between the United States and China. U.S. Treasury Secretary Scott Bessant led a U.S. delegation for talks with Chinese Vice Premier He Lifeng and his team in London, focusing on rare earth exports and potential easing of trade restrictions. In Australia, consumer confidence rose for the fourth time this year, with the Westpac-Melbourne Institute Consumer Confidence Index rising 0.5% month-on-month to 92.6 in June. Meanwhile, business confidence improved, with the National Australia Bank Business Confidence Index rising to 2 in May from -1 in the previous month, turning positive for the first time since January and reaching its highest level in four months.

AUD/USD traded around 0.6520 on Tuesday. Technical analysis of the daily chart Analysis shows that the ongoing bullish bias remains as the pair remains within the upward channel. In addition, the pair remains above the 20-day simple moving average of 0.6458, which indicates strong short-term price momentum. The 14-day relative strength index (RSI) of the technical indicator also remains above 55, suggesting a bullish bias. The pair targets the high of November 12 last year, around 0.6581, and 0.6600 {round mark}. Further gains may prompt the pair to explore the eight-month high of 0.6687. On the downside, the main support level appears at 0.6458 of the 20-day simple moving average. A break below this key support area may weaken the bullish bias and lead AUD/USD to test the round mark of 0.6400.

Today, it is possible to consider going long on the Australian dollar around 0.6508, Stop Loss: 0.6500, Target: 0.6560 , 0.6570

GBP/USD

The British pound fell below $1.35 against the U.S. dollar after the latest economic data showed a clear slowdown in the labor market, strengthening the case for a rate cut by the Bank of England. Wage growth was lower than expected and private sector wages, a key indicator closely watched by the central bank, also decelerated. Meanwhile, the unemployment rate rose to its highest level since 2021 and the number of wage employees saw its steepest fall since 2020, suggesting that the impact of rising national insurance costs and the recent increase in the national minimum wage was beginning to take effect. Although the Bank of England is mostly expected to keep interest rates unchanged at its policy meeting next week, the market has increased the possibility of a rate cut in August. Traders are also closely watching the upcoming monthly GDP data and the government's spending review, both due later this week, for further insights into the direction of the UK economy.

GBP/USD retraced recent gains during the Asian session on Tuesday, trading around 1.3540. It pulled back to around 1.3500 during the European session. Technical analysis of the daily chart shows that the market remains bullish with the pair moving upwards in an ascending channel. GBP/USD remains above the 20-day simple moving average at 1.3465. , indicating strong short-term price momentum. Moreover, the 14-day relative strength index (RSI) is above 50, further reinforcing the bullish bias. On the upside, GBP/USD may test the resistance levels of 1.3581{Monday's high}, and 1.3616, which was reached on June 5 and is the highest level since February 2022. A break above this level may enhance the bullish sentiment. GBP/USD may find major support at 1.3465 of the 20-day simple moving average, followed by 1.3423{25-day simple moving average}, and then the 1.3400 round number level.

Consider going long on GBP around 1.3488 today, stop loss: 1.3475, target: 1.3540 , 1.3550

USD/JPY

The yen has been weak in the face of a broadly resurgent dollar, although it has managed to pare some of its intraday losses from a near two-week low hit in Asia on Tuesday. Optimism over US-China trade talks has been a key factor in weakening the safe-haven yen. However, firm expectations for another Bank of Japan rate hike have kept yen bears from making aggressive bets. Instead, traders have begun pricing in the possibility of further cuts in borrowing costs from the Federal Reserve. This is a stark divergence from hawkish Bank of Japan expectations, limiting any significant appreciation in the dollar and helping to limit losses in the low-yielding yen. Traders also appear reluctant to make aggressive directional bets on USD/JPY, instead opting to wait for the latest US consumer inflation data this week.

From a technical perspective, USD/JPY is trading at 144. A rebound below the .00 level, or the 100-period SMA of 143.86 on the 4-hour chart, and the subsequent up move favors USD/JPY bulls. Moreover, oscillators on the daily chart have just started to gain positive momentum, suggesting that the path of least resistance for the spot price is to the upside. Therefore, a strong follow-through move towards the intermediate resistance of 145.60-145.65, leading to the round-number mark of 146.00, looks like a distinct possibility. The momentum could extend further to the 146.25-146.30 area, or the high of May 29.

On the other hand, the 144.00 mark now seems to protect the immediate downside of the 143.50-143.55 area. This is closely followed by the 142.53 (June 5 low) level.

Consider shorting the USD around 145.05 today, Stop Loss: 145.30, Target: 144.20, 144.00

EUR/USD

EUR/USD struggled to capitalize on the previous day’s up move during the Asian session on Tuesday and attracted fresh selling near the 1.1435 area. The intraday decline was driven by good demand for the US dollar and dragged the spot price back to around the 1.1400 round number. Hopes of an imminent rate cut by the Federal Reserve this year were dampened by Friday’s stronger-than-expected US nonfarm payrolls report. This, combined with optimism over the resumption of US-China trade talks, prompted traders to ease their bearish bets on the US dollar, which became a key factor weighing on the EUR/USD pair. However, as the negotiations extended into the second day in London, traders may refrain from placing aggressive directional bets. Moreover, the European Central Bank hinted at an end to rate cuts at its meeting last week. This could further benefit the common currency and help limit losses for the pair.

The uptrend in EUR/USD remains intact and the pair has achieved consecutive higher highs and lower lows. Meanwhile, the 14-day relative strength index (RSI), a technical indicator on the daily chart, is above 55, and presents a bullish trend. However, the pair must close above 1.14 for bulls to challenge higher prices. If this result is achieved, the next resistance for EUR/USD will be 1.1495 {last week's high}, and 1.1500 {market psychological barrier} area. Next, 1.1574 {April 21 high}, and 1.1600 provide resistance before the barrier. Conversely, if EUR/USD falls below 1.14, the next support level is 1.1348, the June low. Breaking through the latter will expose the 25-day simple moving average of 1.1308, followed by the psychological barrier of 1.1300.

Today, consider going long on EUR near 1.1412, stop loss: 1.1400, target: 1.1460, 1.1470

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