US Dollar Index

The performance of the US dollar index, which received active buying at the start of the new week, rose to 101.98 in the early European trading session, a new high in more than a month. The sudden rise in the past hour was followed by the much-anticipated joint statement of the United States and China regarding the first round of trade negotiations held in Geneva, Switzerland over the weekend. The US tariff rate on Chinese goods will be adjusted within an initial 90 days, and only the basic rate of 10% is currently applicable. China will also suspend tariffs on the United States, marking the end of the retaliatory trade war between the world's two largest economies. This positive development helped to ease market concerns about a US recession, while the hawkish pause of the Federal Reserve also provided strong support for the US dollar. The US Federal Reserve said last week that it was not inclined to cut interest rates in the near term given the rise in short-term inflation expectations caused by US tariffs. The outlook continued to push US Treasury yields higher, with the benchmark 10-year yield reaching its highest level since April 14, further boosting the US dollar. At the same time, the safe-haven dollar seemed to have little impact on the new round of global risk appetite trade.

The US dollar index continued to recover steadily and surged 1.4% to 101.98, a high in more than a month, at the beginning of the week. On the daily chart, technical analysis shows a sustained bullish bias. Moreover, the US Dollar Index remains above the 34-day SMA of 100.97, and 101.00 {round-number mark}, indicating that short-term momentum is strengthening. Technical indicators support the improvement of bullish momentum: the 14-day relative strength index (RSI) has surged above 57.60, while the average directional index (ADX) has dropped to 45 — still indicating a strengthening trend. Therefore, a sustained rise above the psychological 100.00 level for the US Dollar Index could pave the way for a test of 101.83 {early week high}, and 101.92 {50-day SMA}, followed by the more important 55-day SMA of 102.37. However, downside risks remain a concern, once the index falls below the market psychological level of 100. This turns back to bearish and further towards the support area at 99.68 {20-day SMA}, and 99.45 {lower line of the daily horizontal channel}. If it breaks, the 99.00 round mark will become the focus.

Today, consider shorting the US dollar index near 101.92, stop loss: 102.00, target: 101.50, 101.40

WTI spot crude oil

WTI crude oil futures surged nearly 3% to nearly $63 a barrel on Monday, reaching a two-week high, after the United States and China agreed to mutually reduce tariffs on most goods. The major trade breakthrough marks a easing of tensions between the world's two largest oil consumers, reducing risks to oil demand. The two countries agreed to a 90-day pause, with the United States reducing tariffs from 145% to 30%, while China reduced tariffs on U.S. imports from 125% to 10%. At the same time, OPEC+ plans to accelerate production increases in May and June, exerting bearish pressure on oil prices. A potential U.S.-Iran nuclear deal also added pressure as it could ease concerns about global oil supply shortages. U.S. and Iranian negotiators concluded talks in Oman on Sunday and plan further discussions.

Technically, after WTI crude oil breaks through the psychological barrier of $60, it may continue to fluctuate upward in the short term, but OPEC+ production increase and geopolitical risks are still potential negative factors. From the technical indicators of the daily chart, the MACD bar turned from negative to positive (0.43), DIFF (-1.58) and DEA (-1.80) converged, and the 14-day relative strength index (RSI) rose above the neutral range {latest report is around 52.40}, indicating that the long and short forces tend to be balanced. If the price stands above $60, it will further challenge $63.38 {50.0% Fibonacci rebound level from $71.98 to $54.78}, and if it breaks, it will point to the level of $65.41 {61.8% Fibonacci rebound level}. If the rise is blocked, the market may pull back, and the short-term important support level is $60.69 {14-day simple moving average}, and if it breaks, it will point to the next level of $60.00 {market psychological barrier}.

Today, consider going long on crude oil around 61.40, stop loss: 61.20; target: 62.80; 63.20

Spot gold

Gold prices fell nearly 3% to $3,207 per ounce during the European session on Monday, hitting the lowest level in about a week, as demand for safe-haven assets decreased as investor sentiment improved and the United States and China announced major tariff reductions. Following trade talks in Switzerland over the weekend, the United States announced that it would reduce tariffs on Chinese goods from 145% to 30%, while China reduced tariffs on US imports from 125% to 10%, both for a period of 90 days. The moves represent a significant easing of the trade war and show that both sides are willing to seek compromise rather than continued confrontation. Market optimism was further supported by the continued ceasefire between India and Pakistan, although both sides continued to accuse each other of violating the agreement. Meanwhile, the Federal Reserve warned last week of rising risks to inflation and the labor market, and Chairman Powell ruled out the possibility of a preemptive rate cut in response to tariff uncertainty, which put the non-yielding metal under additional pressure.

Gold prices have risen by more than 27% this year, continuing the strong bull market pattern since 2024. However, the weak signals of short-term technical indicators on the daily chart remind investors to be alert to the risk of a correction. The MACD indicator shows that although DIFF and DEA are still in the positive zone, the bar chart turns negative, and the upward momentum has obviously weakened. The 14-day relative strength index (RSI) fell back to 48.10, which is in the neutral and soft zone, reflecting that market sentiment is becoming cautious. From a technical point of view, the daily Bollinger Bands opened and expanded at the beginning of this week due to the surge in gold prices, but then narrowed slightly due to the correction, indicating that the market momentum has weakened. The current price is hovering around the 34-day simple moving average of $3,219 and $3,216 {last week's low}. If it fails to stabilize above the above areas, it may further drop to $3,202 {May 1 low} and $3,200 {market psychological barrier}. A breakout would see $3,164.30 {61.8% Fibonacci retracement of 2956.80 to 3500.10}. If support is found, it is expected to re-challenge the $3,270 {25-day simple moving average} resistance. A breakout would point to the $3,300 {market psychological barrier} level.

Consider going long on gold before 3,230 today, stop loss: 3,225; target: 3,260; 3,270

AUD/USD

The Australian dollar saw a technical correction on Monday, weakening against the US dollar. However, the AUD/USD pair benefited from the optimism surrounding the US-China trade talks that took place during the day. As Australia maintains strong economic ties with China, developments in the Chinese economy tend to directly affect the Australian dollar. Meanwhile, US Treasury Secretary Bessant and Trade Representative Greer called the discussions a constructive move to narrow the $400 billion trade deficit. Traders are focused on the upcoming release of key Australian economic data, including the Westpac Consumer Confidence Index for May and the NAB Business Conditions for April, both due on Tuesday, which could provide fresh clues for the AUD. Investors are also focused on upcoming US data, with consumer inflation data due on Tuesday, followed by retail sales and producer price index data on Thursday, to gauge the early impact of the trade dispute on the broader economy.

AUD/USD traded near the 0.6400 level on Monday. Technical analysis on the daily chart suggests that the pair is holding steady within an ascending channel pattern, with a neutral bias. However, the 14-day relative strength index (RSI) remains around 49.60, suggesting that a bullish bias is still in play. On the upside, AUD/USD may return to the 200-day simple moving average at 0.6456, while additional gains are expected to face initial resistance at 0.6500 {market psychological barrier}, and the 2025 high of 0.6514 (May 7), followed by the 2024 high of 0.6562 on November 11. Currently, interim supports are located at the 25-day simple moving average at 0.6359, and a break below the above levels may lead to further declines to 0.6300 {market psychological barrier} level.

Today, it is recommended to go long on AUD before 0.6355, stop loss: 0.6345, target: 0.6410, 0.6420

GBP/USD

The GBP/USD pair started the new week with a weak posture, giving up part of the small rebound from around 1.3200 (or three-week low) last Friday. Spot prices traded in the 1.3170-1.3175 area during the European session, down more than 1.0% on the day as the US dollar strengthened broadly. The US announced a trade deal with China following progress in high-stakes trade talks in Switzerland. This in turn helped ease market fears of a US recession. Moreover, the Federal Reserve’s hawkish pause earlier this month pushed the dollar to a more than one-month high, which further pressured the GBP/USD pair. Meanwhile, the US and the UK signed a limited trade deal last Thursday. Moreover, the Bank of England said that interest rates will remain restrictive until inflation risks abate, a cautious tone that could prevent traders from making aggressive bearish bets on the pound and limit any meaningful depreciation moves in the GBP/USD pair.

The British pound fell below 1.3200 against the US dollar at the beginning of this week, seeing a one-month low of 1.3160. The outlook for the pair turned bearish with a break below the head and shoulders (H&S) pattern on the four-hour chart. The break of the head and shoulders pattern leads to a bearish reversal, and its formation near key resistance adds to its credibility. GBP/USD slipped to 1.3165, close to the 200-hour simple moving average, suggesting a bearish trend. The 14-hour relative strength index (RSI), a technical indicator on the 4-hour chart, fell to around 38.00. If the RSI continues to fall below this level, it will trigger new bearish momentum to 1.3100 {round mark}, and 1.3083 {50-day simple moving average}. On the upside, 1.3298, the 21-day simple moving average, and 1.3300 {round mark} will be key obstacles for the currency pair.

Today, it is recommended to go long on GBP before 1.3165, stop loss: 1.3150, target: 1.3230, 1.3240

USD/JPY

On Monday, the yen depreciated sharply against the US dollar to 148.65, hitting a one-month low, as demand for safe-haven assets weakened. This is because the breakthrough in US-China trade negotiations weakened the safe-haven demand. The two countries reached an agreement in Switzerland over the weekend that will significantly reduce tariffs, marking a major easing of their long-running trade dispute. Under the preliminary agreement, US tariffs on Chinese goods will be reduced from 145% to 30%, while China will reduce tariffs on US imports from 125% to 10%. Meanwhile, US Commerce Secretary Howard Lutnick noted that the 10% benchmark tariff on goods from other countries is likely to remain "in place for the foreseeable future." Investors are also watching the progress of ongoing trade negotiations between the United States and Japan, with Tokyo hoping to reach a potential agreement by June. On the domestic front, Japan's current account surplus was 3.45 trillion yen in March, following the record surplus of 4.06 trillion yen in February.

From the daily chart, USD/JPY has broken through 146.89 {61.8% Fibonacci rebound level from 151.21 to 139.89}, and 147.00 {round mark} to a more than one-month high of 148.65, and has consolidated above the highs, showing that bulls are in control of the rhythm. The daily MACD turned red again, and the 14-day relative strength index (RSI) rose steadily. In the short term, it is expected to further attack the 149.69 {200-day simple moving average} range. If it breaks through the 150.00 market psychological barrier, it will open the upward channel and target 151.21 (March 28 high). In terms of support below, 146.89 {161.8% Fibonacci rebound level} and 147.00 {integer barrier} are the current key defense lines. Once broken, it may trigger a short-term correction. The initial support is seen at the 146.00 barrier. If it is lost, it may trigger technical selling pressure. The further target is the 145.55 {50% Fibonacci rebound level} level.

Today, it is recommended to short the US dollar before 148.65, stop loss: 148.85; target: 147.20, 147.00

EUR/USD

The euro weakened to near a one-month low of $1.0951, its lowest level since April 9, as the dollar strengthened amid easing trade tensions between Washington and Beijing. The United States and China agreed to a 90-day tariff reduction after talks in Geneva, a major detente in the trade war that erupted last month. Under the deal, U.S. tariffs on Chinese goods will be reduced to 30% from 145%, while China's tariffs on U.S. imports will be reduced to 10% from 125%. In other geopolitical developments, Ukrainian President Volodymyr Zelensky announced his willingness to meet Russian President Vladimir Putin in Turkey on Thursday, while a fragile ceasefire between India and Pakistan continued. On the monetary policy front, money markets now expect the ECB's deposit facility rate to end the year at 1.72% - a return to mid-April levels to counter the possible economic impact of U.S. tariffs.

From a technical perspective, the euro has been trading below the daily chart since the fourth week of April. The 10-day simple moving average {latest at 1.1262} is seen as a key trigger for bearish traders. In addition, the oscillators on this chart are deeply in bearish territory and have just begun to gain negative traction on the daily chart, which suggests that the path of least resistance for the EUR/USD pair is to the downside. However, the spot price has shown some resilience below the 1.1100 round number. A decisive break above 1.1100 (round number) and a break towards 1.1063 {50-day simple moving average} will reaffirm the bearish bias, This makes the EUR/USD pair vulnerable. The subsequent decline has the potential to drag the pair further towards the 1.1008 {55-day simple moving average} level. On the other hand, the 1.1171 area of ​​the 34-day simple moving average now seems to be an immediate obstacle, and if it is broken, the EUR/USD pair may aim to return to the 1.1200 round number. However, any further gains are more likely to attract new selling and be limited around 1.1316 {21-day simple moving average}.

Today, it is recommended to go long on the euro before 1.1075, stop loss: 1.1060, target: 1.1120, 1.1135.

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