US Dollar Index

The US dollar index extended its decline on Thursday, falling to a low of 97.60, reaching its lowest level since 2022, as re-heated trade tensions and geopolitical risks weighed on market sentiment. President Trump announced plans to send formal letters to major trading partners in the next one to two weeks, outlining unilateral tariff measures aimed at forcing countries to reach a new trade agreement. This comes as the current 90-day suspension of reciprocal tariffs is about to expire next month. Adding to market unease, geopolitical tensions escalated further as Iran threatened to attack US bases if nuclear talks broke down. Meanwhile, US consumer and producer inflation data came in lower than expected, adding to downward pressure on the dollar. The weaker inflation data reinforced market expectations that the Federal Reserve will cut interest rates twice this year. The dollar fell most significantly against the euro, Swiss franc and yen.

The US dollar index plunged to its lowest level since April at 97.60 on Thursday as market expectations for a Fed rate cut this year rose and uncertainty over the tariff war persisted. From a technical perspective, bearish sentiment for the US dollar index remains as the index is below the key psychological support level of 100.00 on the daily chart. The 14-day relative strength index (RSI) of the technical indicator is in the negative area around 35.50, and further downward momentum is strengthened, indicating that the bearish outlook is more favorable in the short term. The key support level of the US dollar index is located in the 97.22 {March 22, 2022 low}-97.00 {round mark} area. A breakthrough of this level may expose 96.63, the low of March 1, 2022. On the positive side, the low of June 5, 98.35, acts as an immediate resistance level for the US dollar index. An additional upside filter is located at Thursday's high of 98.64.

Consider shorting the US dollar index around 98.00 today, stop loss: 98.10, target: 97.45, 97.35

WTI spot crude oil

WTI crude oil retreated from a two-month high of $67.82 on Thursday and is currently trading around $67.20 in the European session. However, oil prices may resume their gains due to growing concerns about supply disruptions, which are triggered by escalating tensions between Israel and Iran. In the middle of the week, the United States plans to partially evacuate its embassy in Iraq and will allow military families to leave certain locations in the Middle East, citing security risks in the region. Meanwhile, US President Trump said he has lost confidence that the United States and Iran can reach an agreement on their nuclear program. Trump added that the United States will not allow Iran to have nuclear weapons. Escalating geopolitical tensions may push WTI prices higher in the short term. Oil price traders will closely monitor the progress of US-China trade negotiations. The economic uncertainty caused by Trump's tariff policy may drag down WTI prices.

This week, WTI crude oil prices hit $67.82, the highest since early April, reflecting the recovery of market risk appetite after the US-China trade negotiations. Boosting market sentiment. In the middle of the week, oil prices soared, continuing the gains at the beginning of the week, but failed to reach the important level of $68.25 {200-day simple moving average}. Bulls are now focusing on whether they can clearly break through the technical resistance of the 200-day moving average to confirm the continued upward trend. If the bears regain the initiative, traders will regard the $64.00 {market psychological level}, and the $64.04 {May 21 high} area levels as key positions that the market will pay close attention to. If this level can be maintained, the oil price of $63.09 is regarded as the near-term support level. A successful break above $67.82 {Thursday high} may open up space to the next major upside target near $68.25 {200-day simple moving average}.

Consider going long on WTI crude oil near 67.00 today, stop loss: 66.80, target: 68.50, 68.80

Spot gold

Spot gold rose on Thursday, reaching a high of around 3,388, despite optimistic news on trade, but lower-than-expected U.S. inflation data reinforced investors' expectations that the Federal Reserve will start cutting interest rates in September, while the United States is preparing to evacuate its embassy in Iraq due to heightened security issues in the Middle East, adding to the market's risk aversion. The unexpectedly low increase in the core consumer price index in the middle of the week pushed the entire precious metals market higher as yields and the dollar fell. People hope that this will allow the Federal Reserve to cut interest rates faster. On the trade front, Trump announced on Wednesday that he had reached an agreement to restart the fragile truce in the U.S.-China trade war, with U.S. and Chinese negotiators agreeing on a framework covering tariff rates. He also expressed his willingness to extend the July 8 deadline to finalize negotiations with trading partners to avoid higher U.S. tariffs.

Gold prices retain their upward bias, rising to a near one-week high of $3,388 yesterday, but price action over the past two days suggests that buyers are unwilling to push spot prices above $3,400. The 14-day relative strength index (RSI), a technical indicator on the daily chart, is stable near the neutral line, further confirming the trendless state of the market. For bullish continuation, gold prices need to climb above $3,392 {June 3 high} to challenge the $3,400 round-number mark. Further strong support is at $3,439.60 {May 7 high} and the all-time high of $3,500.10. Conversely, if gold falls back below the $3,323-3,325 area, it may continue to attract some buyers and find reasonable support around the $3,300 round-number mark. If there is a subsequent sell-off, gold prices will fall below 3,260 {lower support line of the daily equilateral triangle}, and $3,263 {55-day moving average} area.

Today, you can consider going long on gold around 3,380, stop loss: 3,375, target: 3,400, 3,405

AUD/USD

The Australian dollar edged towards $0.6533 against the U.S. dollar on Thursday, continuing the previous trading day's decline. However, the Australian dollar currency pair may appreciate as weak U.S. inflation data strengthens market bets on a September rate cut by the Federal Reserve. U.S. President Trump issued a new tariff threat, which caused a deterioration in risk sentiment. On Wednesday, he announced plans to send official letters to major trading partners in the next one to two weeks, outlining unilateral tariffs aimed at forcing countries to negotiate trade agreements. The Australian dollar is also under pressure from expectations of further rate cuts by the Reserve Bank of Australia. The market expects the RBA to cut interest rates by 25 basis points to 3.60% at the July 8 meeting, and further cuts to 3.10% by the end of the year.

AUD/USD was trading around 0.6530 on Thursday. Technical analysis on the daily chart suggests that the bullish bias may weaken as the pair attempts to break through the lower line of the ascending channel. In addition, the pair is slightly above the 20-day simple moving average of 0.6466, indicating strong short-term price momentum. A break below this level would weaken short-term price momentum. However, the 14-day relative strength index (RSI) of the technical indicator remains above 50, indicating a bullish bias. AUD/USD may target the seven-month high of 0.6538, which was reached on June 5. Further gains may prompt the pair to explore the area of ​​​​the high of November 12 last year, around 0.6581, and 0.6600 {round mark}. On the downside, initial support is seen at 0.6466, the 20-day simple moving average. A break below this critical support range could weaken the bullish bias and lead AUD/USD to test the 40-day simple moving average at 0.6439.

Consider long AUD around 0.6516 today, Stop Loss: 0.6505, Target: 0.6580 , 0.6590

GBP/USD

The British pound is hovering around $1.3610, close to its highest level in three years, supported by broad dollar weakness, driven by President Trump's renewed threat of tariffs and signs of slowing inflation in the United States. In the UK, gross domestic product fell 0.3% in April, far worse than the expected 0.1% decline. The decline was driven by a combination of high energy bills, increased national insurance contributions and high stamp duty rates. Labor market indicators also showed a loss of momentum. Despite these headwinds, the Bank of England is widely expected to keep interest rates unchanged next week. Meanwhile, Chancellor Reeves unveiled a multi-year spending review, promising £2 trillion in public spending. The plan includes a real increase of 2.3% in departmental budgets per year, indicating continued support for key sectors. However, analysts highlighted the limited fiscal space mentioned in the review, raising the possibility of tax increases later this year.

GBP/USD has experienced a pullback from multi-year highs; however, interest in the pound remains strong. The pair has remained stable in a short-term consolidation range around 1.3500 and continues to show a clear bullish bias. From a technical perspective, GBP/USD appears to have bottomed around 1.3446 {25-day simple moving average} over the past two days and has broken above the 14-day simple moving average at 1.3525. If GBP/USD continues to break through 1.3623 {Thursday's high}, it is expected to test the yearly high of 1.3650 and the 1.3700 round number. Conversely, the first support will be at the 1.3446 {25-day simple moving average} level. Sellers are dragging prices below this level and looking to test the intraday low of 1.3412 on May 29.

Consider going long on GBP around 1.3600 today, Stop Loss: 1.3590, Target: 1.3650, 1.3670

USD/JPY

The yen appreciated to around 143.50 per dollar on Thursday, extending gains from the previous session as U.S. President Donald Trump renewed his threat of tariffs, boosting demand for safe-haven assets. Trump announced plans to send letters to major trading partners in the next one to two weeks detailing unilateral tariffs aimed at pressuring countries into a trade deal. In Japan, the latest data showed that business sentiment deteriorated further in the second quarter as uncertainty over U.S. trade policy weighed on the export-heavy economy. Meanwhile, Bank of Japan Governor Kazuo Ueda told parliament on Tuesday that the central bank would be ready to raise interest rates again if there is enough confidence that underlying inflation is close to or stable around its 2% target.

From a technical perspective, the overnight pullback from two-week highs and the break below horizontal support at 144.55-144.50 levels favors USD/JPY bears. Moreover, the slightly negative oscillator on the daily chart suggests that the path of least resistance for the spot price is to the downside. Further selling around the Asian session low of 143.70 will confirm the bearish outlook and pave the way for a drop towards the 143.00 round number mark, targeting horizontal support at 142.62-142.60. On the other hand, the 144.55 area or the Asian session high now seems to be an immediate obstacle, a break of which could trigger fresh short-term covering, allowing the pair to make another attempt to conquer the 145.00 psychological mark.

Consider shorting the dollar around 143.70 today, stop loss: 143.90, target: 142.80, 142.50

EUR/USD

The euro hit $1.1630 for the first time since November 2021 against the dollar as investors reacted to divergent policy signals from the European Central Bank and the Federal Reserve and renewed trade war concerns. Recent comments from ECB officials reinforced market expectations that the bank may soon pause its easing policy and choose to wait and see to assess the possible economic impact of new US tariffs. In May, eurozone inflation slowed to 1.9%, while the ECB implemented its eighth consecutive rate cut, lowering the deposit rate to 2%. In contrast, the dollar weakened against the backdrop of lower-than-expected US inflation data and escalating trade tensions, sparking market speculation that the Federal Reserve may start cutting interest rates earlier in September. US President Donald Trump added to market uncertainty on Wednesday, announcing plans to send letters to major trading partners within a few weeks outlining new unilateral tariff rates.

EUR/USD rose rapidly after breaking through the top of its recent consolidation range. The pair has broken through the high of 1.1570 in late April and moved above 1.1600. From a technical perspective, the uptrend is expected to continue as buyers aim to clear the 1.1500 mark. This will expose the psychological high of 1.1600, followed by 1.1692 {October 2021 high}, and 1.1700 {round mark}. The 14-day relative strength index (RSI) of the daily chart is bullish, indicating an upward direction, which shows that buyers are gaining momentum. On the downside, the 4-hour RSI has entered the overbought area, which suggests that a correction may occur. The less likely scenario is that EUR/USD needs to break through the 1.1500 round mark, and the 1.1444 {9-day simple moving average} area. This will allow the pair to pull back to the 1.1400 round mark level.

Today, you can consider going long on Euro around 1.1570, stop loss: 1.1560, target: 1.1630, 1.1650

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