US Dollar Index

The US dollar index fell to 98.53, close to the three-year low of 98.0 hit in April last year, after weaker-than-expected inflation data dampened market sentiment. U.S. consumer prices rose 2.4% year-on-year in May, slightly higher than 2.3% in April, but lower than the market's expectation of 2.5%. Energy prices have fallen 3.5% over the past year, while food prices have risen 2.9%. Core inflation (excluding food and energy) remained at 2.8%, slightly away from the 2.9% expectation. In response, traders are increasingly inclined to believe that the Federal Reserve will cut interest rates by 25 basis points in September, while the possibility of another rate cut in December is also rising. Separately, President Trump announced that the trade deal with China has been finalized after talks in London, although the agreement is still awaiting formal approval.

The 14-day relative strength index (RSI) indicator, a technical indicator on the daily chart, remains around 40.80 and is moving sideways, indicating that the bullish bias remains, but lacks momentum. On the upside, immediate resistance is at the 20-day simple moving average at 99.48. A break above this level could strengthen medium-term price momentum and prompt the US dollar index to explore the 100.00 psychological area. Conversely, Wednesday's low of 98.53 can be seen as the first support level. Then it goes to 98.35 {June 5 low}, further down to test 97.91 {lowest level since March 2022, recorded on April 21} level.

Today, consider shorting the US dollar index around 98.80, stop loss: 98.90, target: 98.30, 98.20

WTI spot crude oil

WTI crude oil rose more than 5% on Wednesday to close at $67.20 a barrel, after President Trump announced a preliminary trade deal with China, boosting hopes for energy demand in the world's two largest economies. The agreement includes China's supply of rare earth minerals and the United States easing restrictions on Chinese students, although final approval is still pending. Analysts pointed out that although trade-related risks have eased, there is still uncertainty about the impact on global demand. Meanwhile, tensions with Iran persist, with Tehran threatening to attack U.S. bases if nuclear talks fail, continuing to put pressure on supply. On the supply side, OPEC+ plans to increase production by 411,000 barrels per day in July, continuing to gradually reduce production cuts. However, according to EIA data, U.S. crude oil inventories fell by 3.64 million barrels last week, far higher than the expected decline of 2.5 million barrels, indicating stronger demand or tighter supply.

At present, the bull-dominated pattern of oil prices, as shown by the daily chart, is currently rising, breaking through the top of the $60.80-64.10 range in the past two weeks, indicating that bulls are dominant. The MACD indicator momentum column of the technical indicator has expanded, showing that market momentum is increasing. If oil prices fall below the support level of $65.31 {Tuesday's high}, it may open up further downward space, with the target or looking at the $62.36 {14-day simple moving average} area; while the key $60.00 {city psychological level} is the main support level. On the contrary, if it can break through the upper resistance of $66.59 {April 4 high}, it is expected to restart the upward trend to $68.25 {200-day simple moving average}. And continue to challenge $70.00 {market psychological barrier}.

Today, you can consider going long on WTI crude oil around 67.00, stop loss: 66.80, target: 68.50, 68.80

Spot gold

Gold rose to more than $3,330 an ounce on Wednesday, after rising 1% earlier in the trading day, as lower-than-expected U.S. inflation data reinforced market expectations that the Federal Reserve may start cutting interest rates in September. Gold prices rose to $3,349.01 per ounce on Tuesday as the conflict between Russia and Ukraine continued. Gold prices rose to $3,349.01 per ounce during the session on Tuesday, but then gave up gains as traders closely watched the US-China trade negotiations, the outcome of which could ease trade tensions and boost the global economy, thereby reducing demand for safe-haven assets, while the continued rise in US stocks also suppressed gold's safe-haven buying demand. Gold's appeal as a safe-haven asset is often the most dazzling when the global situation is turbulent. The continued escalation of the Russia-Ukraine conflict has undoubtedly provided strong support for gold prices. Although geopolitics and economic slowdown have provided support for gold, the progress of the US-China trade negotiations has become the main source of pressure for gold prices to fall.

From a technical perspective, gold prices rebounded from the 200-hour simple moving average near $3,301.50 on the 4-hour chart and then rose, which is good for gold bulls. In addition, the oscillators on the chart have started to gain positive momentum again, supporting the case for further gains during the day. A further break above the immediate barriers of the $3,353 {equilateral triangle upper resistance line}, and $3,350.00 {May 27 high} area will reaffirm the bullish outlook and push gold prices to the intermediate barrier of $3377-3378, and then to the round mark of $3400. On the other hand, if gold prices fall back below the $3323-3322 area, it may continue to attract some buyers and find reasonable support around the round mark of $3300. If there is a follow-up sell-off, gold prices will fall below the $3,260 {equilateral triangle lower support line on the daily chart}, and the $3,265 {50-day moving average} area, followed by the support level of the round mark of $3,200.

Today, consider going long on gold near 3,350, stop loss: 3,345, target: 3,375, 3,380

AUD/USD

The Australian dollar fell against the US dollar on Wednesday, giving up recent gains. However, the pair may find support as trade tensions between the United States and China ease. Any economic changes in China may affect the Australian dollar as China and Australia are close trading partners. On Tuesday, Lutnick noted that the United States and China have reached a framework for implementing the Geneva consensus and are seeking approval from U.S. President Donald Trump, Bloomberg reported. The U.S. negotiators also noted that they "absolutely expect" that issues surrounding the transportation of rare earth minerals and magnets will be resolved in the implementation of the framework. Meanwhile, Chinese Vice Commerce Minister Li Chenggang said that the communication with the United States was rational and frank and he would report the framework to Chinese leaders.

AUD/USD was trading slightly above 0.6500 on Wednesday. The technical analysis of the daily chart is bullish. Moreover, the pair remains above the 20-day simple moving average of 0.6462, indicating strong short-term price momentum. The 14-day relative strength index (RSI) of the technical indicator also remains above 55, showing a bullish bias. AUD/USD may target the immediate resistance of the seven-month high of 0.6538, which was reached on June 5. Further gains could prompt exploration of the highs of November 12 last year, around 0.6581, and 0.6600 {round mark}. On the downside, the main support level appears at the 20-day simple moving average of 0.6462. A break below this key support area could weaken the bullish bias and lead AUD/USD to test the 0.6400 round mark.

Consider going long on AUD around 0.6490 today, stop loss: 0.6478, target: 0.6540, 0.6550

GBP/USD

GBP/USD recovered early losses against the US dollar during the European trading hours on Wednesday, trading around 1.3550. The GBP/USD pair remained calm due to a weak UK employment report. According to data released by the UK National Statistics Office on Tuesday, the UK International Labor Organization (ILO) unemployment rate rose to 4.6% in the three months to April, from 4.5% previously. This data was in line with expectations. In addition, average wages (excluding bonuses) in the UK rose 5.2% year-on-year in April, compared with a revised 5.5% earlier. The market forecast was 5.4%. These data show that the UK labor market is losing momentum under the pressure of government tax and minimum wage increases. This in turn may exert some selling pressure on GBP/USD in the short term.

GBP fell to nearly 1.3456 against the US dollar on Tuesday after failing to revisit the three-year high of 1.3616. The outlook for the currency pair has become uncertain as it has fallen close to the 25-day simple moving average, which fluctuates around 1.3444. While the 14-day relative strength index (RSI) on the daily chart is under pressure around 55.00, indicating that the upside is limited. GBP/USD has retreated from multi-year highs, but buying of GBP/USD remains strong. The pair has found short-term resistance around 1.3600 and continued to show strong bullish momentum to 1.3616 {June 5 high} after breaking it, on the other hand, major support is found at 1.3500 and then the 25-day simple moving average at 1.3444.

Consider going long GBP around 1.3488 today, Stop Loss: 1.3475, Target: 1.3540 , 1.3550

USD/JPY

The Japanese yen continued to maintain a negative bias against the US dollar for the second day of the week, trading close to the two-week low hit the previous day. The latest optimism stemming from the positive outcome of the US-China trade talks continues to support positive risk sentiment and is seen as weakening the safe-haven yen. Moreover, buying of the US dollar emerged, helping USD/JPY maintain modest gains around the psychological 145.00 mark during Wednesday's Asian session. However, progressive yen depreciation seems difficult to achieve as market expectations for another rate hike by the Bank of Japan this year grow. Conversely, the Fed is expected to further reduce borrowing costs in 2025, which acts as a headwind for the dollar and helps limit losses in the low-yielding yen.

From a technical perspective, acceptance above the 20-day simple moving average of 144.18 and positive oscillators on the daily/hourly charts favors USD/JPY bulls. However, multiple failures to build momentum above the 145.00 psychological mark make it prudent to wait for some follow-up buying before the 145.30 area or the two-week high hit on Tuesday. The spot price may then break through the intermediate resistance of 145.60-145.65 and aim to recapture the 146.00 round number mark before climbing further to the 146.25-146.30 area or the May 29 high. On the other hand, the current position of the 20-day simple moving average of 144.18 may protect the upcoming downside risks from a break below the 144.00 mark. A decisive break below the latter will negate the positive outlook and shift the short-term bias in favor of USD/JPY bears. The subsequent decline could drag the spot price to the 143.60-143.50 area, towards the sub-143.00 level.

Consider shorting the US dollar around 144.65 today, stop loss: 144.90, target: 143.50, 143.30

EUR/USD

The EUR/USD pair lost ground after two consecutive sessions of gains, trading around slightly below 1.1500 during Wednesday's session. Close to a three-year high last seen in April, investors are weighing the increasingly divergent policy outlooks of the ECB and the Federal Reserve. Recent speeches by ECB officials have reinforced market expectations that the central bank may soon pause its rate-cutting cycle and adopt a wait-and-see approach to assess the impact of new US tariffs on the economy. China's Vice Commerce Minister Li Chenggang said that the communication with the United States was rational and candid, and he would report the framework to Chinese leaders. Last week, the ECB announced a 25 basis point rate cut, bringing borrowing costs to the lowest level since November 2022. In addition, the central bank has also lowered its inflation forecasts for 2025 and 2026, indicating that its current easing cycle is nearing its end.

EUR/USD price action suggests that the uptrend is still continuing, but buyers have so far failed to break through the 1.1500 {market psychological barrier} level, which would immediately expose the current year-to-date high of 1.1574, and 1.1600 {round mark}. The 14-day relative strength index (RSI) of the technical indicator on the daily chart is slightly above 60. It indicates that EUR/USD may see consolidation as buyers are taking a break. On the other hand, if EUR/USD falls below the 14-day simple moving average of 1.1401 and 1.1400 {round mark}, shorts will intervene, leaving room for a challenge of 1.1300 {round mark} and the 50-day simple moving average of 1.1298.

Today, you can consider going long on Euro around 1.1476, stop loss: 1.1465, target: 1.1530, 1.1550

Disclaimer: The information contained herein (1) is proprietary to BCR and/or its content providers; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely; and, (4) does not constitute advice or a recommendation by BCR or its content providers in respect of the investment in financial instruments. Neither BCR or its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.