US Dollar Index

At the beginning of this week, the US dollar index continued its decline, falling to a three-year low of around 96.38 in the European session. Technically, the US dollar index has been falling for six consecutive months, and the cumulative decline in the first half of the year is the largest since the implementation of the floating exchange rate system in the 1970s. Market sentiment is driven by three factors: rising expectations of a Fed rate cut, uncertainty about Trump's policies, and progress in global trade agreements. CME FedWatch tool shows that traders bet that the probability of a September rate cut has risen to 93.3%. At the same time, Trump's criticism of Fed Chairman Powell and the controversy over the $3.3 trillion spending bill further weakened the appeal of the US dollar. This week, the market focus turned to the US June non-farm payrolls report and PMI data. If the data is significantly lower than expected, the US dollar index may fall to the 96.00-95.50 support area.

The current market has taken into account too many pessimistic expectations, and the US dollar index has a short-term oversold repair demand. However, against the backdrop of the Fed's policy shift and the reshaping of the global trade pattern, any rebound may only be seen as a technical adjustment rather than a trend reversal. Traders need to pay close attention to the repricing of interest rate expectations by this week's data, as well as changes in market sentiment before the July 9 tariff node. The daily chart shows that the US dollar index moving average system is in a bearish arrangement: the 50, 100 and 200-day simple moving averages form layers of suppression. Although the MACD indicator is in the negative range (DIFF -0.5780, DEA -0.4894), the histogram narrowed to -0.1771, indicating that the short-term downward momentum has weakened slightly. RSI (14) reported 29.30, which is in the oversold area, and we need to be alert to the risk of technical rebound. On the downside, we can pay attention to the 96.00 integer mark and the low of 95.13 on February 4, 2022. On the upside, initial resistance appears in the 97.00 {integer mark} and 97.72 {9-day simple moving average} area.

Today, you can consider shorting the US dollar index around 96.80, stop loss: 96.90, target: 96.30, 96.20

WTI spot crude oil

International oil prices encountered downward pressure at the beginning of this week, mainly because the market expected OPEC+ to continue to implement the production increase plan in August, and the United States may increase foreign tariffs, which has caused concerns about global economic growth. During the Asian session on Tuesday, Brent crude oil and WTI crude oil fell at the same time. OPEC+ is scheduled to hold a meeting on July 6, when it will finalize the production strategy for August, and the market will remain on the sidelines before then. In addition to supply concerns, uncertainty in the US foreign trade policy also puts pressure on oil prices. In addition, the easing of geopolitical risks has also weakened the support for oil prices. In mid-June, Israel launched an air strike on Iran's nuclear facilities, and the United States subsequently participated in the air strike, triggering a short-term surge in crude oil prices. Brent once broke through $80, and WTI crude oil rose to before $77. However, as Trump announced that Iran and Israel had reached a ceasefire agreement, the prices of both oils fell sharply.

From a technical perspective, the daily chart of US crude oil (WTI) shows that the current oil price is under pressure below the 20-day simple moving average of $67.16, and the short-term trend is bearish. The 14-day relative strength index (RSI) of the technical indicator is below 50, and the momentum indicator is weak, indicating that the buying power is limited. In addition, the daily structure presents a "falling flag" consolidation pattern. If the oil price falls below the key support of the round mark of $64.00, it may trigger further downward exploration to $63.72 {last week's low}. And further downward test the $63.00 {round mark}, and 62.20 {June 6 low} level. On the contrary, if it can regain the short-term resistance level near the $65.00 round mark and the 30-day moving average of $65.23, it is expected to further test the 20-day moving average of $67.16 and $67.53 {June 24 high} level to restore the rebound momentum.

Today, you can consider going long on WTI crude oil near 64.70, stop loss: 64.50, target: 66.20, 66.50

Spot gold

Gold prices maintained strong buying sentiment in the first half of the European session on Tuesday and are currently trading in the $3,340 area, up more than 1% on the day. As the market generally accepts that the Federal Reserve will resume the rate cut cycle in the near future, the US dollar is hovering at its lowest level since February 2022, which in turn is considered to be beneficial to non-yielding gold. In addition, the heightened uncertainty about US President Donald Trump's tariff policy before the July 9 deadline helped the commodity to continue to rise on the basis of a good rebound from a one-month low the previous day. Meanwhile, bullish traders appear to be unfazed by the generally positive sentiment in the stock market, which tends to weaken the price of safe-haven gold. This in turn suggests that the path of least resistance for gold remains upward and supports the prospect of further gains. However, investors may avoid making aggressive bets and choose to wait for the release of important US macroeconomic data this week, which is scheduled for the beginning of the new month, including the non-farm payrolls report on Thursday.

From a technical perspective, the risk remains skewed to the upside as the momentum of the 14-day relative strength index (RSI) and the moving average convergence divergence (MACD) indicators on the daily chart has strengthened. The RSI has made a new high above the neutral 50 mark. If the bullish pressure intensifies in the next few trading days, the price of gold may retest the 3,400 round number mark, and break through to 3,452.70 {June 16 high}

. On the downside, the first support is at $3.300 (a psychological level in the market), a break of which will target the 65-day simple moving average at $2.889, followed by $3,245, Monday's low. A break below this level could accelerate the decline towards the $3,200 round mark.

Consider going long on gold around $3,335 today, stop loss: 3,330, target: 3,355, 3,360

AUD/USD

The Australian dollar weakened to around $0.6575 on Tuesday after hitting a seven-month high as expectations of a rate cut by the Reserve Bank of Australia at its July 2025 meeting increased, weighing on the currency. The market is now pricing in a 25 basis point cut in the cash rate to 3.60%, even if Wednesday's retail sales data beat expectations. Further supporting the case for monetary easing is the continued underperformance of consumer spending, which has been failing to meet the Reserve Bank of Australia's expectations. As a result, markets are increasingly pricing in further rate cuts in the second half of the year, potentially taking the cash rate to 3.10% by year-end, or even to 2.85%, a level widely seen as stimulative. On the economic front, the manufacturing purchasing managers' index fell to a four-month low in June, reflecting weaker production and new orders, weighed down by weak export demand and ongoing supply chain disruptions.

On Tuesday, the AUD/USD exchange rate traded around 0.6570. Daily technical analysis shows that the exchange rate remains within an ascending channel, with a sustained bullish bias. The 14-day relative strength index (RSI) on the daily chart is above 50. In addition, the exchange rate is above the 9-day simple moving average of 0.6513, suggesting strong short-term price momentum. On the upside, the AUD/USD pair could rally to a new eight-month high of 0.6585 set on July 1, followed by the upper line of the ascending channel around 0.6650. A breakout would target 0.6681 {last November high}. The 9-day simple moving average near 0.6513 acts as the main support level. A break below this level will weaken short-term price momentum and exert downward pressure on AUD/USD, testing 0.6500 {market psychological barrier}, and 0.6508 {20-day simple moving average}. Below this is the 50-day simple moving average near 0.6461.

Consider going long on AUD near 0.6563 today, stop loss: 0.6550, target: 0.6610 , 0.6620

GBP/USD

GBP/USD rose 1.3789 during Tuesday's session, hitting its highest level since October 2021, and is currently trading around 1.3750 as a new UK-US trade deal came into effect. , due to a weaker US dollar. Traders currently expect the next Fed rate cut to be less likely, believing that the cut will take place in July and seeing a probability of a September rate cut of about 74%. These bets were confirmed by Friday’s US Personal Consumption Expenditures (PCE) report, which showed an unexpected decline in consumer spending in May. Moreover, concerns about the worsening fiscal situation in the US have kept the dollar bulls on the defensive. Moreover, the prevailing risk-on environment has also heightened bearish sentiment towards the safe-haven dollar. This is seen as a key factor for the GBP/USD pair and supports the prospects for further short-term appreciation.

GBP/USD extended last week’s gains and continued to trade this week, hitting 1.3789, another high since October 2021. Currently, GBP buyers may be too optimistic as GBP/USD price has quickly surpassed the ascending trendline, with the price trading well above the 20-day simple moving average near 1.3576. The momentum shown by the 14-day relative strength index (RSI), a technical indicator on the daily chart, suggests that bulls may test 1.3800 {market psychological barrier} again in the short term, and a break will look towards 1.3875 {August 13, 2021 high}. On the other hand, if GBP/USD falls below the 1.3700 round mark, it is expected to fall to the first support range near 1.3626 {9-day barrel single moving average}. The next psychological level of 1.3600 becomes a key support level.

Today, you can consider going long on GBP near 1.3732, stop loss: 1.3720, target: 1.3790, 1.3800

USD/JPY

The yen remained strong as it entered the European trading session, trading close to the three-week low of 142.80 hit earlier on Tuesday. The Bank of Japan's tankan survey showed that business confidence among large Japanese manufacturers improved for the first time in the April-June period. In addition, companies expect consumer prices to remain above the central bank's 2% annual target for the next five years. This provides support for the Bank of Japan to raise interest rates further and has become a key factor supporting the yen. At the same time, yen bulls seem to be unaffected by US President Trump's hint of more tariffs on Japan, which, according to Japan's chief trade negotiator Yoshio Akazawa, will cause significant damage to the economy. Even with the positive sentiment, there is little impact on the bullish sentiment for the safe-haven yen. On the other hand, the US dollar is hovering near multi-year lows amid bets that the Federal Reserve may resume its rate-cutting cycle in the near future. This further favors the low-yielding Japanese yen and keeps USD/JPY under pressure around the mid-143.00 region.

From a technical perspective, an intraday break below Tuesday’s swing low, around the 143.45 region, could be seen as a key trigger for bearish traders in USD/JPY against the backdrop of the recent break below the 200-hour simple moving average {144.39} on the 4-hour chart. Moreover, oscillators on the 4-hour and daily charts have gained negative traction, suggesting that the path of least resistance for the spot price is to the downside. Therefore, a subsequent slide towards the 143.00 mark, heading towards the next relevant support around the 142.75-142.70 area and further towards the 142 round number mark, seems to be a distinct possibility. On the other hand, the 144.00 round number mark now seems to limit any rebound attempt. Any further gains could be seen as a selling opportunity and limit USD/JPY near the 200-hour simple moving average on the 4-hour chart, currently around the 144.39 area. A sustained strong break above the latter could trigger a short-term covering rally that would allow the spot price to recapture the psychological 145.00 level.

Consider shorting the dollar around 143.60 today, stop loss: 143.80, target: 142.70, 142.50

EUR/USD

The EUR/USD pair has risen for the tenth consecutive day. The pair is currently trading slightly higher above the 1.1800 level, driven by upbeat Eurozone manufacturing data and German employment data. The dollar weakened against the euro amid growing fiscal concerns and uncertainty over a trade deal. The Financial Times reported on Tuesday that U.S. officials are seeking a narrower deal to avoid the imminent re-imposition of U.S. tariffs. Four people familiar with the negotiations said President Trump's administration is seeking a phased deal with the most engaged countries in order to quickly reach an agreement before the July 9 deadline. Uncertainty over the trade deal continues to weigh on sentiment and exert some selling pressure on the dollar. Investors are concerned about the U.S. Senate's attempt to pass Trump's tax cut and spending bill, which faces internal partisan divisions and is expected to increase the national debt by $3.3 trillion. Fiscal concerns dampen optimism and lead to a weaker dollar. This, in turn, provides support for major currency pairs.

The trend for EUR/USD remains upward, and buyers are gathering more momentum, as shown by the 14-day relative strength index (RSI), a technical indicator on the daily chart. Although regular readings on the RSI suggest that it is in overbought territory, when the trend is strong, readings between 70-80 suggest that acceleration is possible before reaching extreme readings. Therefore, the possibility of further gains is favored. The first supply zone for EUR/USD is at 1.1800, followed by 1.1850, 1.1886 {September 2021 high}, and 1.1900 {round number. On the other hand, if EUR/USD falls back below 1.1750, a test of the 1.1700 mark is likely. If this level is broken, the possibility of further downside will increase, and the next demand zone is at 1.1653, the daily low on June 26, and then 1.1600.

Today, you can consider going long on the euro around 1.1785, stop loss: 1.1776 target: 1.1850, 1.1860

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