USD

The U.S. dollar has surged significantly, driven by hawkish statements from the Federal Reserve. Dallas Fed President Logan expressed caution regarding the uncertainty of a rate cut in December. The U.S. Dollar Index broke above 106.00, reaching a six-month high. The index, which measures the dollar’s value against a basket of six major currencies, held its latest gains mid-week, rising above 106.00. Expectations for further rate cuts by the Fed have waned, and the release of important U.S. data in the coming weeks will impact the outlook for monetary policy. Supported by strong U.S. economic fundamentals, the dollar index is expected to continue its upward trend. Upcoming inflation and retail sales data are anticipated to further boost the dollar. Despite profit-taking and easing labor conditions, the Fed remains optimistic about the economy, and the overall trend for the dollar remains positive. Before key U.S. data is released in the latter part of this week, investors remain optimistic about the "Trump trade," with the dollar showing renewed strength.

On the daily chart, technical indicators such as the 14-day Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) show an upward trend, but the 14-day RSI is near 70. Approaching overbought levels suggests that a short-term pullback or consolidation may occur. However, the overall technical outlook remains bullish, with indicators suggesting potential for further gains. The market is closely watching this index to see if it can sustain its momentum or if it will pull back in the coming days. Should a pullback occur, the 105.00–105.50 level could serve as support for consolidating gains. On the upside, the first level to watch is 106.52, the April high and double top, which represents a strong resistance level. Once this level is breached, the next target is the 107.00 psychological level.

Today, consider shorting the Dollar Index around 106.65, with a stop loss at 106.80 and targets of 106.10 and 106.05.

WTI Spot Crude Oil

Crude oil prices have dropped to $68 and are unable to stage a significant rebound. OPEC’s monthly report failed to positively impact oil. The U.S. Dollar Index rally has stalled, with some profit-taking. U.S. WTI crude traded near $68.00 on Wednesday. After the Organization of the Petroleum Exporting Countries (OPEC) lowered its global oil demand growth forecast for 2024, WTI prices experienced a downward fluctuation. OPEC’s latest downward revision in demand growth has exerted some selling pressure on crude. This marks the fourth consecutive time that the organization has lowered its demand expectations. The market considers China’s latest stimulus measures to be underwhelming, which has pressured WTI prices, as China is the world’s second-largest oil consumer. A stronger dollar has also contributed to WTI’s decline, as a stronger dollar makes dollar-denominated oil more expensive. Meanwhile, the U.S. Dollar Index, which measures the dollar’s value against a basket of foreign currencies, has climbed to a six-month high, breaking the 106.00 level. Although crude oil prices have found some breathing space, the outlook remains bleak. Even if OPEC may further limit its production, the United States under President Donald Trump is expected to reduce more output in the coming years. As the U.S. potentially becomes more oil-independent, crude prices may undergo further adjustments.

On the daily chart, oil prices are still running below $70.00 this week, and the technical indicator 14-day Relative Strength Index (RSI) is trending downward below the 42 level, remaining negatively pressured and far from oversold territory, indicating that the path of least resistance for crude oil prices is downward. Traders should look toward $67.12, a level that maintained prices in May and June 2023, as the first support. If this level is breached, the year-to-date low for 2024 at $64.75 will be reached, followed by 2023’s low of $64.38. On the upside, initial resistance is at the psychological level of $70.00 and the 14-day simple moving average at $69.70. The next target is at $72.25 (the 50.0% Fibonacci retracement of the $77.93 to $66.57 range) and the 89-day moving average at the $72.87 area.

Today, consider going long on crude oil around $67.75, with a stop loss at $67.50 and targets of $68.95 and $69.20.

XAUUSD

After a decline in the first half of the day, the dollar regained popularity. Gold prices are at a two-month low around the $2,575 area, technically poised to continue their downtrend. Spot gold consolidated near the $2,600 level on Wednesday after extending its recent decline to $2,575 per ounce, marking the lowest level since September. In a week with sparse data, the strength of the dollar has dominated financial markets, with focus remaining on the U.S. political landscape and its potential impact on the global economy. Concerns related to tariffs have spread to Europe amid ongoing setbacks in the Eurozone economy, with Germany’s political crisis adding to worries. Meanwhile, poor stock performance has further boosted demand for the dollar. Most Asian and European indices were down, while U.S. stocks pared recent gains. The three major U.S. stock indices posted losses, though limited in scope. Additionally, market participants continue to speculate on what Donald Trump’s potential return to the White House might mean for the U.S. and the rest of the world.

From a technical perspective, gold prices are likely to continue their downtrend. The daily chart shows that gold has broken further below the 9-day moving average at $2,677.90, slowly gaining downward momentum. The 89-day ($2,564.00) and 100-day ($2,541.30) moving averages are currently below the gold price, providing short-term support. Meanwhile, the 14-day Relative Strength Index (RSI) is below 35, entering negative territory but not yet indicating a potential reversal or medium-term bottom. This suggests that the path of least resistance for gold prices is downward. The downside targets are the 89-day moving average at $2,564.00 and the $2,550 level. On the other hand, if there is a short-term technical rebound in gold prices above $2,628.00 (Tuesday's high), the next target would be $2,644.70 (5-day moving average) and $2,647.50 (the 76.4% Fibonacci retracement level between the October 10 low of $2,603.50 and the all-time high of $2,790).

Today, consider going long on gold around $2,570.00, with a stop loss at $2,565.00 and targets of $2,595.00 and $2,598.00.

AUDUSD

In the early part of this week, the U.S. dollar continued to rise, weighing on risk assets and pushing the Dollar Index to a four-month high, just breaking above the 106.00 level. In contrast, the Australian dollar has struggled, falling below the 0.6600 level and breaching the critical 200-day simple moving average at 0.6629. This reversal increases the likelihood of further declines in the near term. Amid widespread declines in commodity prices, the Australian dollar is also facing headwinds from falling copper and iron ore prices. The latest inflation data in Australia shows a cooling trend, with the Consumer Price Index (CPI) for September slowing to 2.1%, and the annual rate for the third quarter at 2.8%. Looking ahead, while potential rate cuts from the Federal Reserve could provide support for AUD/USD, expected inflationary pressures under the Trump administration could strengthen the dollar, limiting AUD/USD's upside potential. Additionally, ongoing concerns about China’s economic outlook could continue to keep the Australian dollar under pressure. Finally, according to the latest data from the U.S. Commodity Futures Trading Commission, speculators were net buyers of the Australian dollar in the week leading up to November 5. However, this occurred amid a fourth consecutive drop in open interest, indicating some caution in the market.

On the upside, AUD/USD is expected to encounter initial resistance around 0.6583 (9-day moving average) and 0.6600 (psychological level). Further gains would test the 200-day moving average at 0.6630 before reaching 0.6687 (November 7 high). The daily chart shows the 14-day Relative Strength Index (RSI) near 35 in negative territory, with bears in control. Yesterday, AUD/USD broke below 0.6511 (November 6 low) and 0.6500 (psychological level). The next support levels are 0.6441 (April 23 low) and the 2024 low of 0.6347 (August 5).

Today, consider going long on the Australian dollar around 0.6470, with a stop loss at 0.6460 and targets of 0.6520 and 0.6530.

GBPUSD

GBP/USD has broken below the 1.2700 support level as dollar buying interest suddenly revived following U.S. CPI data and some hawkish comments from Fed's Logan. Mid-week, after mixed UK labor data, GBP/USD weakened, dropping nearly one percent below 1.28, with GBP traders mainly focused on the sharp rise in the UK unemployment rate, which exceeded expectations. Outside the UK, the dollar was widely sought after, and its strength further intensified the pound's intraday decline. Most UK labor data exceeded expectations, but wage growth continued to fuel inflation concerns. Although the number of jobless claims was lower than expected, it still surpassed last month's revised figure.

The daily chart shows a clear bearish trend for GBP/USD, which has broken below key support at 1.2819 (200-day moving average) and 1.2800 (psychological level), intensifying selling pressure. These levels, previously strong support, have now reversed into resistance. The break below 1.2819 - 1.2800 is a bearish signal, indicating a shift toward a long-term downtrend with bears taking control. Furthermore, the Moving Average Convergence Divergence (MACD) indicator remains bearish, with the MACD line below the signal line and both lines trending downward. The histogram is also negative, suggesting accelerating bearish momentum. Downside targets to watch include 1.2600 (a round number level) and 1.2665 (August 8 low). Unless the MACD shows a significant recovery, GBP/USD is likely to remain under pressure in the near term. On the upside, bulls would need a close above the 200-day moving average (1.2819) to alleviate some bearish pressure and potentially challenge the 1.2873 level (Tuesday’s high).

Today, consider going long on GBP around 1.2690, with a stop loss at 1.2680 and targets of 1.2750 and 1.2760.

USDJPY

The U.S. dollar remains supported by persistently high U.S. inflation data and expectations regarding U.S. fiscal and trade policy. It rose to a nearly four-month high of 155.60 on Tuesday, with the yen hitting a new low against the dollar since July 30 in Wednesday's Asian session, though it ultimately fell back below the 155.00 psychological level. Japan’s Producer Price Index rose in October, but investors seem to believe that Japan's weakened minority government may make it difficult for the Bank of Japan to raise rates again. Additionally, tariffs promised by U.S. President-elect Trump could significantly impact Japanese exports, adding to concerns that have been a key factor in weakening the yen. Furthermore, Trump's inflationary import tariffs may limit the Federal Reserve's scope for rate cuts, which continues to support rising U.S. bond yields. This has further dragged down the low-yield yen, with yen weakness and dollar strength together boosting USD/JPY. Meanwhile, the yen's recent decline has raised the prospect of intervention by Japanese authorities.

From a technical perspective, the USD/JPY currency pair continues to struggle and has finally broken through the 155.00 level. This level should now act as a key pivot point, and if it remains clearly above this level, it could pave the way for further gains. Given that the 14-day Relative Strength Index (RSI) on the daily chart remains steady in the upward region and has not entered overbought territory, USD/JPY could potentially break past the choppy high of 155.20 in July, aiming to reclaim the 156.00 level. It may continue to strengthen toward the intermediate resistance at 156.60 and then the 156.90-157.00 area. On the downside, if USD/JPY undergoes a clear correction, it should find suitable support around the round number level of 154.00, near the overnight swing low of 153.40. Any further decline may be seen as a buying opportunity near 153.00, which should help limit the downside around the 152.65-152.60 support level.

Today, consider going short on the dollar around 155.70, with a stop loss at 155.90 and targets of 154.80 and 154.60.

EURUSD

The U.S. dollar has resumed its upward trend, reaching new highs and forcing EUR/USD to abandon its initially constructive stance, hitting a new annual low around 1.0555 on Wednesday. After October’s U.S. CPI inflation data came close to the median market forecast, EUR/USD only slightly rebounded from a 54-week low. The euro is under pressure due to broad-based dollar flows. On Tuesday, EUR/USD continued to slide, down another 0.33%. The pair briefly tested below 1.0600, and after a rapid seven-week decline from the multi-month high slightly above 1.1200 reached in September, it is poised for further downside. Due to a lack of significant EU-focused economic data, the euro’s outlook remains primarily influenced by dollar volatility, though eurozone traders are awaiting Thursday’s pan-EU GDP update. EU Q3 GDP is expected at 0.4% quarter-over-quarter and 0.9% year-over-year.

The EUR/USD daily chart shows a clear bearish trend, remaining well below the 50-day (1.0948) and 200-day (1.0754) moving averages. After breaking below these averages, EUR/USD’s downward momentum has accelerated, with both moving averages now acting as resistance. The short-term exponential moving average lies below the long-term EMA, further signaling that bears are in firm control and confirming a short-term downtrend. The MACD indicator reflects strong downward momentum, intensifying the bearish inclination. Sellers currently dominate, and the bearish trend is likely to persist. Regarding support levels, EUR/USD is approaching the psychological level of 1.0500, which may temporarily ease downside pressure. A break below this level could target 1.0450 (October 4, 2023 low) and 1.0400. For bulls to regain dominance, EUR/USD would need to break above 1.0700 (a round number) and continue towards the 200-day moving average at 1.0754, though a significant rebound seems unlikely in the near term given the current technical setup. Overall, the bearish outlook remains intact, with downside risk prevailing in the short term.

Today’s recommendation: Consider going long on the euro around 1.0550, with a stop loss at 1.0535 and targets at 1.0600 and 1.0610.

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.