US Dollar Index

The dollar rose sharply against other major currencies at the start of the week after US President Donald Trump announced new tariffs on a range of countries, including Japan and South Korea, effective August 1. Trump posted letters to leaders of several countries on his social media platforms, saying that tariffs of 25% would be imposed on Japan and South Korea. He also sent letters to the leaders of Malaysia, Kazakhstan, Myanmar, South Africa and Laos, all of which have tariff levels close to those previously announced in April. The dollar index, which measures the greenback against six major currencies, rose to 97.67, a one-week high. The index extended last week's gains when data showing a resilient labor market pushed back expectations of imminent monetary easing by the Federal Reserve. However, the index remains close to a three-and-a-half-year low and has fallen 10% so far this year as investors question the safe-haven status of the US currency and reassess previous expectations that the United States can survive a global economic slowdown.

The dollar index showed early signs of a technical recovery after briefly breaking below a well-defined descending wedge pattern last week. The breakout appears to be short-lived as the index has moved back inside the wedge, suggesting a potential bear trap. The US Dollar Index is currently trading at 97.50, just above the 9-day simple moving average of 97.08. A sustained break above the 9-day SMA would strengthen the bullish case, with the next targets being the upper line of the wedge pattern, currently around 97.85, and the 98.00 {round number} area. Momentum indicators are also showing early signs of improvement. The 14-day relative strength index (RSI) rebounded above 41.00 on the daily chart, recovering from oversold territory, although it remains below the neutral 50 level. Meanwhile, the MACD remains in negative territory but is trending towards a bullish crossover, with the histogram becoming less negative. If the index fails to sustain above 97.08 – 97.00, the momentum could drag the index back to Friday’s low of 96.85, exposing new downside risks to at least the 96.38 prior low.

Consider shorting the US dollar index around 97.68 today, stop loss: 97.80, target: 97.10, 97.00

WTI spot crude oil

WTI crude oil traded around $67.30 per barrel on Tuesday as signs of strong demand offset concerns about OPEC+'s unexpected increase in production in August and the potential impact of new US tariffs. Supply conditions certainly look to be rising, however, strong demand is still higher than expected. Oil has also come under pressure as US officials said they would delay the start of tariffs but failed to provide details on the changes in tariff rates. Investors are concerned that higher tariffs could slow economic activity and oil demand. On the other hand, US officials have hinted that the tariffs will take effect later, but have not yet made clear what adjustments will be made to the tariffs by then. This uncertainty will limit the upside for oil prices as investors may continue to worry about the impact of slowing economic activity on the outlook for oil demand.

Oil prices have experienced a wave of fluctuations recently: rebounding from the low of 57.00 in May to the high of 77.00 US dollars in late June, and then falling below 64.00, the current price trend is relatively stable. Oil prices are in a long-term downward channel, but they are still above the short-term upward trend line dating back to early May. The rise is suppressed by the 20-day simple moving average of $67.95. Sellers are testing the 35-day simple moving average support level of $65.40. If it falls below this level, oil prices will fall to the key horizontal support area near $64.00. This level was the main resistance from April to May; further down, 64.00 will become the focus. If buyers break through the 20-day simple moving average of $67.95, they will hit the 100-day moving average of $68.70.

Consider going long on WTI crude oil near 67.10 today, stop loss: 66.90, target: 68.00, 68.50

Spot gold

Gold prices fell more than 1% during the North American trading session on Tuesday as safe-haven demand weakened, despite U.S. President Trump's announcement that the first tariff letters had been sent to some U.S. trading partners. In addition, the recovery of the U.S. dollar and the rise in U.S. Treasury yields exerted downward pressure on the precious metal, which is currently trading at $3,303, having reached a low of $3,285. Market sentiment has improved, as shown by the major U.S. stock indices. On Monday, Trump imposed tariffs of 25% to 40% on 14 countries, although he decided to postpone the July 9 deadline to August 1 and said no further extensions were needed. Policymakers in Japan and South Korea said they would try to negotiate with the United States to seek tariff relief. Rising U.S. Treasury yields also put pressure on gold prices as investors have excluded expectations of a rate cut by the Federal Reserve. Data from the Chicago Mercantile Exchange show that market participants expect 48 basis points of easing in 2025.

The current daily chart shows that after the gold price fell from the high of $3,499, it has been running in an obvious symmetrical triangle pattern, and the oscillation range has gradually narrowed, suggesting that the market is about to choose a direction. The central axis of the Bollinger Band is at $3,348.80, and the gold price has been suppressed by it for many consecutive days, and the short-term rebound momentum is limited. The upper and lower rails of the Bollinger Band are currently $3416.80 and $3280.98, respectively, indicating that volatility is shrinking and a directional breakthrough is approaching. The MACD technical indicator shows that the bearish momentum has weakened slightly, and the market is in a wait-and-see mood. The RSI hovers at 50.00 and lacks clear rebound momentum, suggesting that the current market is still in a consolidation market. If gold breaks through the upper resistance of $3,400 and stands firm, it may be regarded as an effective breakthrough signal, and the price is expected to challenge the previous high of $3,451 again. If the price loses the psychological level of 3,300, the next level is the support of $3,250, then the lower line of the triangle is broken, which may trigger a new round of correction, and the target may be the stage low area of ​​3,200.

Today, you can consider going long on gold near 3,297, stop loss: 3,293, target: 3,320, 3,330

AUD/USD

The Reserve Bank of Australia announced on Tuesday that the official cash rate remained unchanged at 3.85% after the conclusion of the July monetary policy meeting. The Australian dollar jumped in an immediate reaction to the RBA decision. Currently, AUD/USD rose on the day and traded around 0.6530. Investors also turned cautious before the release of the minutes of the Federal Reserve meeting this week, looking for clues about the future policy direction of the central bank. On the trade front, President Trump confirmed that the new tariffs will take effect on August 1, and the final tariff rate is still under negotiation. Finance Minister Bessant said that countries without a trade agreement by then will face the risk of tariff levels returning to the levels set on April 2. Despite these pressures, analysts expect the Australian dollar to remain stable due to its reliance on the gradually recovering Chinese economy.

AUD/USD briefly traded below 0.6500 to around 0.6490 on Tuesday. Technical analysis of the daily chart shows that the pair currently maintains a sustained bullish bias. The 14-day relative strength index (RSI) of the technical indicator is around 50, indicating that bullish sentiment is dominant. However, AUD/USD has fallen below the nine-day simple moving average of 0.6553, indicating that short-term price momentum is weakening. The pair may test the main resistance of the nine-day simple moving average of 0.6553. A break above this level may improve price momentum and support the pair to approach the eight-month high of 0.6590 set on July 1. Further gains will support the pair to explore the area around the 0.6600 round mark. On the downside, AUD/USD may hover around 0.6466 {55-day SMA}, followed by 0.6400 round number, and 0.6398 level of 89-day SMA.

Today, consider going long on AUD around 0.6515, stop loss: 0.6500, target: 0.6555, 0.6570

GBP/USD

The British pound fell slightly against major currencies on Tuesday, falling below 1.36 against the US dollar again. The British pound remains weak due to the fiscal risks brought by the higher welfare spending bill proposed by the Labour government in the House of Commons last week. The announced welfare bill shows that the standard allowance of universal credit (UC) will increase, which is expected to increase the debt burden by 4.8 billion pounds by the 2029-2030 fiscal year. This led investors to sell British gilts because the bill raised financial risks. Meanwhile, Chancellor of the Exchequer Rachel Reeves confirmed that the government will fund the additional financial burden, but did not specify whether it will be through tax increases or spending cuts. "Of course, the entitlement changes that Congress voted on this week have costs, which will be reflected in the budget," Reeves said.

From the daily chart, GBP/USD's recent uptrend remains intact, but momentum seems to be fading, with the 14-day relative strength index (RSI) sliding towards the neutral line near 55. Therefore, the possibility of a pullback to 1.3600 (market psychological level) and below is increasing. In this case, key support will be the July 2 daily low of 1.3561, followed by 1.3500 and the 50-day simple moving average of 1.3482. On the other hand, if GBP/USD breaks through the July 4 daily high, it will encounter resistance near 1.3681, which will make 1.3700 (round number) possible. Breaking through the latter will expose the year-to-date high of 1.3788.

Consider going long GBP around 1.3576 today, stop loss: 1.3560, target: 1.3640, 1.3650

USD/JPY

The yen slipped against the weaker dollar for the second day in a row and slid to a more than two-week low of 145.98 during the Asian session on Tuesday. US President Trump escalated the trade war, announcing that his administration will impose a 25% tariff on goods imported from Japan, effective August 1. In addition, weak wage growth data from Japan released on Monday could further complicate the Bank of Japan's path to normalize monetary policy and become a key factor suppressing the yen. Yen bulls seemed unimpressed and largely shrugged off data showing that Japan's current account surplus exceeded expectations in May 2025, reaching ¥343.64 billion (¥294.95 billion in the same period last year). At the same time, the economic impact of Trump's tariffs and geopolitical risks from new conflicts in the Middle East have triggered investors' caution towards risk assets. This is evident in the general decline in global equities, which could support the safe-haven yen and limit gains in USD/JPY in case of another sell-off in the US dollar.

From a technical perspective, USD/JPY seems to be building momentum above the 50-day simple moving average of 144.65. Considering that the oscillators on the daily chart are gaining positive momentum, further buying above the Asian session peak of 146.45 area should enable the spot price to recapture the 147.00 round number. The momentum could extend further to the intermediate resistance of 147.60 towards the June monthly high of 148.00 area. On the other hand, a corrective pullback may now find some support in the horizontal area of ​​145.65-145.60. Any further declines may be seen as a buying opportunity and remain limited around the psychological 145.00 mark. The latter should act as a key point, which if decisively broken, could drag the pair to the 50-day simple moving average of 144.65 area and towards the 144.00 round number mark.

Consider shorting the dollar around 146.70 today, stop loss: 146.95, target: 145.40, 145.20

EUR/USD

At the beginning of the week, EUR/USD fell due to risk aversion caused by the escalation of the trade war, and US President Trump began sending letters to some countries to impose tariffs. This made the US dollar stronger, and the euro was affected, rebounding again on Tuesday and is currently trading at 1.1725. Trump announced a 25% tariff on all Korean and Japanese products imported into the United States. In addition, he imposed tariffs between 25% and 40% on Malaysia, Kazakhstan, Myanmar, Laos and South Africa. Once these news were announced, EUR/USD fell to a six-day low of 1.1686. However, Reuters revealed that the EU would not receive the letter sent by the United States with higher tariffs, which allowed EUR/USD to rise back above 1.1740. Meanwhile, traders are focusing on the release of the minutes of the Federal Open Market Committee (FOMC) meeting in June.

On the daily chart, EUR/USD has fallen slightly this week, while the 14-day relative strength index (RSI) of the technical indicator has fallen from a high of 72 to around 62, indicating that buyer momentum may be weakening as the RSI is sliding sharply towards neutral levels. The threat of a new seven-day low below the June 27 cycle low of 1.1680 could pave the way for a challenge of 1.1650 and the 20-day simple moving average of 1.1640. Further downside support is at 1.1600 {market psychological barrier}. On the contrary, if EUR/USD re-enters the high of 1.1791 at the beginning of last week, the next key resistance will be 1.1800 {market psychological barrier and the year's high of 1.1832 area, and may open up space for a downside to the 1.1900 round mark.

Today, consider going long on the euro near 1.1710, stop loss: 1.1700 target: 1.1760, 1.1770

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