US Dollar Index

The US dollar index depreciated sharply to 106.55 last week, and has fallen more than 1.20% this week since Monday. President Trump may be facing his first domestic challenge after the egg crisis, and now even US retail sales have begun to improve significantly. With overall sales falling sharply by 0.9% in January and sales excluding automobiles and transportation unexpectedly falling by 0.4%, it is clear that US consumers are tightening their spending. Last week, the US dollar has been weak recently, especially after the US announced its tariff policy, and the market reaction was relatively cold. The main reason is that the market believes that the actual impact of these policies may be difficult to reflect in the short term and that there is more time for countries to negotiate. At the same time, hopes for peace in Ukraine have boosted the sentiment of European assets, which has suppressed safe-haven currencies such as the US dollar. It shows that the market's expectations for the US dollar have been adjusted. Expectations for interest rate hikes by the Federal Reserve have also cooled, especially after the release of the January CPI/PPI data. Although the data was stronger than expected, the market's expectations for the Fed's interest rate hikes have not strengthened. Instead, it is believed that the Fed may only cut interest rates once in 2024. Although the market is pessimistic about the short-term outlook for the US dollar, the foreign exchange market may see new fluctuations as further US economic data is released and tariff policies are implemented.

From a technical perspective, the US dollar index has repeatedly fallen since it hit a nearly two-year high of 110.18 at the beginning of this year. At this stage, its value is still overvalued, coupled with weak fundamentals and entering a stage full of policy uncertainty, indicating that the market's expectations for the US dollar have been adjusted. Although the 14-day relative strength index (RSI) on the daily chart remains above 50, the bearish momentum has increased. The risk is still biased to the downside. Once the US dollar index fails to regain the support levels of 107.00 (integer mark) and 106.97 (last Thursday's low), it can initially consider 106.36 (low on December 12 last year), and 106.34 (100-day moving average). If it breaks, it will move down to the level of 106.00 (market psychological mark). As for the resistance level, the first one is at 107.75 (9-day moving average), and if it breaks, it will further test the 108.00 (market psychological level), and 108.52 (February 12 high) area levels.

Today, you can consider shorting the US dollar index around 106.95, stop loss: 107.10, target: 106.50, 106.40

WTI spot crude oil

International oil prices closed slightly lower last week as market expectations for a possible peace agreement between Russia and Ukraine increased. If sanctions are lifted, global energy supply may improve. However, the delay in the implementation of the "reciprocal tariffs" by the United States has limited the decline in oil prices. The global crude oil market is digesting the impact of the "reciprocal tariffs" policy proposed by US President Trump. The Trump administration plans to impose new tariffs on some trading partners, including taxes on crude oil exports from Canada and Mexico. This move may exacerbate trade concerns and create uncertainty in the energy market. Despite the volatility caused by trade policy, WTI crude oil has remained above $70 per barrel and Brent crude oil is close to $75. The US oil industry is optimistic about obtaining exemptions, believing that the Trump administration may make adjustments before the tariffs are officially implemented. At the same time, the constraints on Russian crude oil supply due to US sanctions continue, pushing oil prices to record their first weekly increase since mid-January. Recently, Trump and Russian President Putin agreed to negotiate on the conflict in Ukraine. The news has led to market speculation that if the negotiations make progress, the constraints on Russian crude oil supply may ease, thus exerting some downward pressure on oil prices.

WTI crude oil rebounded to a high of $73.37 per barrel at the beginning of last week, and then turned around to retest the psychological support level before $70.00. The current rebound was triggered by the support levels of $70.00 (market psychological level), and $69.76 (76.4% Fibonacci retracement level of $66.80 to $79.37). The initial rebound strength is expected to rise to $73.00 (21-day moving average), and $73.08 (50.0% Fibonacci retracement level) highs. If the above resistance areas are broken, it may push the price up to $73.69 (200-day moving average). Further breakthrough of $73.69 will confirm that the short-term crude oil price will turn from falling to rising, and the bullish target will be set at the $74.56 (38.2% Fibonacci retracement level) level. On the contrary, if it falls below $70.16 (last week's low), and $70.00 (market psychological level), it will confirm the continuation of the downward trend, and the target may first look at $69.76 (76.4% Fibonacci retracement level). If it breaks, it will turn to the level of $68.50 (low of December 23 last year).

Today, you can consider going long on crude oil around 70.50, stop loss: 70.30; target: 72.00; 72.20

Spot gold

Before the weekend, gold prices fell sharply due to profit-taking, but still achieved a seventh consecutive week of gains as US President Donald Trump's plan to promote reciprocal tariffs triggered market concerns about a global trade war. Spot gold fell 1.53% on Friday to $2,885..50/ounce, but the cumulative increase for the week was still nearly 0.8%. Last Tuesday, gold prices hit a record high of $2,942.80 per ounce. In addition, data-wise, the Producer Price Index (PPI) also unexpectedly rose following the hot January U.S. Consumer Price Index (CPI) data. However, the components of the index cooled, reinforcing the market's dovish expectations for the Fed's rate cut prospects. In addition, it was supported by U.S. President Trump's reciprocal tariff updates and increased market expectations that the Fed may stick to its easing trajectory this year. The claim that Trump's reciprocal tariff plan is in the works and will not be implemented immediately has eased global stock markets and dealt a heavy blow to the safe-haven demand for the U.S. dollar, driving gold prices higher. Gold traders ignored the prospects of Russia-Ukraine peace talks and the focus remained on Trump's tariffs and U.S. inflation data. Looking ahead, gold prices fell on profit-taking as traders took profits after this week's record rally and headed for a long weekend. The latest developments around Trump's tariffs and broader market sentiment will continue to play a key role in the direction of gold prices.

Technically, gold prices are maintaining a strong uptrend on the daily chart, with prices holding above the key 10-day moving averages of $2,876 and $2,877 (Friday's low). However, the 14-day relative strength index (RSI) remains in overbought territory, having retreated sharply to 66.50 after reaching a high of 80.00, so caution is warranted before further gains. The first upside hurdle for gold appears in the $2,942-2,943 range, representing the all-time highs reached last Tuesday. Further gains could see a move to $2,980. A decisive break above this level could pave the way for a move to the psychological $3,000 mark. On the other hand, the formation of a bearish "piercing" pattern in gold prices last week, coupled with the fact that gold prices are severely overbought on the RSI index, suggests a possible technical correction and decline. If selling pressure intensifies below the aforementioned support levels, gold prices could accelerate downwards to $2,876 and $2,877. The next highest level is $2,864, the low of February 12. Further downside support is at $2,848.30, the 14-day moving average.

Today, consider going long on gold before 2,880.00, stop loss: 2,875.00; target: 2,900.00; 2.910.00

AUD/USD

Before the weekend, the Australian dollar strengthened to a new high this year at 0.6367, helped by the decision of US President Donald Trump to postpone the implementation of reciprocal tariffs. Meanwhile, concerns about a potential global trade war linger, especially if further tariff measures are announced later. Market participants also sold the dollar after weak US retail sales data. AUD/USD closed higher on four of the five trading days and broke through the recent key resistance level of 0.6300. Driven by the decision of US President Trump to postpone the implementation of reciprocal tariffs. In addition, AUD/USD appreciated as US yields fell across the board and the US dollar weakened despite ongoing concerns about the global trade war. The Australian dollar may face resistance as market expectations for a rate cut by the Reserve Bank of Australia remain unchanged due to the latest inflation outlook data. Consumer inflation expectations rose to 4.6% in February from 4.0% in January, reaching the highest level since April 2024. On the other hand, the upside for AUD/USD may be limited as strong US inflation data reinforces expectations that the Federal Reserve will maintain interest rates for a long time.

Late last week, AUD/USD finally broke above the 9-day (0.6293) and 14-day (0.6267) moving averages on the daily chart, and further successfully broke through the recent key resistance level of 0.6300. This shows that the momentum of the currency pair is increasing in the short term. In addition, the 14-day relative strength index (RSI) of the technical indicator remained above 63 and was far away from the overbought area, which strengthened the bullish bias of AUD/USD. On the upside, AUD/USD could test the 89-day moving average of 0.6389, and the psychological level of 0.6400. It could further challenge the 100-day moving average of 0.6434. On the other hand, if the RBA cuts interest rates this year at its monetary policy meeting this week, it is not ruled out that the pair could fall below the main support levels of the 9-day moving average of 0.6293, and 0.6300 (key market level), and then the 14-day moving average of 0.6267. A decisive break below these levels could weaken short-term price momentum, potentially pushing the pair towards the psychological level of 0.6200.

Today, consider going long on AUD before 0.6340, stop loss: 0.6330; target: 0.6380; 0.6390.

GBP/USD

GBP/USD re-enters the 1.2600 mark as it continues to rebound from a 14-month low against the US dollar. The main catalyst for GBP/USD's continued rise is the dollar's continued pullback against its major currency rivals. Despite Fed Chairman Jerome Powell's hawkish remarks during his testimony to Congress, US President Trump's reciprocal tariff plan and the Fed's dovish expectations put downward pressure on the dollar. Market sentiment has been mostly positive last week due to the prospects of a Russia-Ukraine peace agreement and Trump's delay in implementing reciprocal tariffs. In addition, increased market bets that the Fed will maintain its accommodative trajectory this year also provided some relief to the market. After strong US Consumer Price Index (CPI) data in January, the Producer Price Index (PPI) also unexpectedly rose. However, the monthly component of the index cooled, reinforcing the market's dovish expectations for the Fed's rate cut prospects, making it difficult for the dollar to find demand. In turn, GBP/USD climbed above 1.2600. The pound was also supported by cautious comments from Bank of England policymakers.

The daily chart shows that GBP/USD broke out of the consolidation phase to the upside after closing above the 50-day simple moving average of 1.2465 late last week. The high of 1.2630 this year was seen before the weekend. The 14-day relative strength index (RSI) of the technical indicator is firmly above the mid-line and is currently close to 62, indicating that there is still room for upside. Last week, the 9-day and 50-day moving averages formed a "golden cross" bullish pattern. Therefore, the immediate resistance levels are 1.2600 (market psychological level), and 1.2630 (this year's high). A sustained break above this level will expose the psychological level of 1.2650. Further upside, buyers will target the 100-day simple moving average of 1.2678, and if it breaks, the 1.2700 round number level and the 200-day simple moving average of 1.2787 will be targeted. If GBP sellers intervene at higher levels, the first challenge will be 1.2500 (round mark), and further is the 50-day simple moving average resistance turned support 1.2465. Breaking below this level will reopen the door to test 1.2332 (upward trend line support; and last week's low.

Today, it is recommended to go long GBP before 1.2570, stop loss: 1.2560, target: 1.2630, 1.2640

USD/JPY

Last week, USD/JPY experienced a series of sharp fluctuations. Market sentiment was affected by multiple factors, including fluctuations in US Treasury yields, Trump's tariff remarks, and potential trade pressure from Japan. There is great uncertainty about the short-term trend of USD/JPY. In recent days, the trend of USD/JPY has experienced relatively sharp fluctuations. In the middle of last week (February 12), the price of USD/JPY once rose to 154.80, but then due to multiple factors, it quickly fell back to 152.00 before the weekend, almost swallowing up the previous gains. This sharp correction was mainly affected by the fluctuations in US Treasury yields. The recent strong performance of the US dollar, especially with the rise in US Treasury yields, has lost some of its upward momentum. The volatility of the US debt market and the re-emergence of Trump's tariff remarks have brought more uncertainty to the future trend of USD/JPY. Although USD/JPY may continue to fluctuate in the short term, the trend of the yen still needs to be closely monitored due to Trump's tariff remarks and the uncertainty of the global trade environment. USD/JPY is likely to fluctuate in the range of 151.00 to 155.00 in the coming weeks. If the US dollar continues to face the expectation of rate hikes, the US-Japan exchange rate may try to break through the upper resistance. However, under the pressure of tariffs that Japan may face, the rebound of the yen cannot be ignored, especially in the context of rising global risk sentiment.

From a technical perspective, the short-term trend of USD/JPY is quite volatile. In the early part of last week, USD/JPY was considered to be facing an overbought situation, which made it impossible for the market to continue to rise sharply. After breaking through the 154.60 mark, the currency pair quickly fell back to the 200-day simple moving average of 152.72 and hit a three-day low of 152.02, close to the previous support level. Currently, the sellers have regained control of the situation, and the earlier gains have been erased, and the downward trend has resumed. The 14-day relative strength index (RSI) of the daily chart technical indicator is still bearish (latest report is around 41), indicating that there may be further downside in the future. Therefore, the first support for USD/JPY will be 151.75 (300-day moving average), followed by the swing low of February 7 at 150.93, and 150.84 (78.6% Fibonacci retracement level from 158.88 to 150.96). If the pair falls further, it may test the psychological key support of 150.00. On the other hand, if USD/JPY rebounds, it will encounter two resistance areas: 153.16 (Friday's high) and 153.76 (50.0% Fibonacci retracement level). Once it breaks out, the pair may target the 154.25 (upper line of the daily chart downward channel) level.

Today, it is recommended to short the US dollar before 152.55, stop loss: 152.80; target: 151.50, 151.40

EUR/USD

The EUR/USD gapped down for the second consecutive week, falling to 1.0285 on Monday, but changed direction in the middle of the week and finally closed slightly below 1.0500, close to a two-week high. In contrast to the weakness of the US dollar, the euro has recently rebounded. The EUR/USD rose after Trump announced the tariff policy, and once rose above the key resistance level of 1.0500, reflecting the market's increased demand for the euro. Although economic growth in the eurozone is relatively weak, the market generally expects that the European Central Bank may adopt an accommodative monetary policy, which provides support for the euro. In addition, the low inflation and relatively healthy fiscal situation in the eurozone have kept the market confident in the long-term prospects of the euro. Overall, against the backdrop of tariff policies and global trade frictions, the volatility of the foreign exchange market is still relatively large. The weakness of the US dollar index reflects the market's reassessment of the Fed's policy outlook, while the euro is strong supported by expectations of an accommodative policy by the European Central Bank. Although the market is pessimistic about the short-term outlook for the US dollar, the foreign exchange market may see new fluctuations as further US economic data is released and tariff policies are implemented.

From a technical perspective, EUR/USD is currently close to the recent high of 1.0500, and if it breaks through this level, it may usher in more upward momentum. However, given the potential risk of a rebound in the US dollar, the market is also paying attention to whether the US dollar index will fall below the important support level of 107, which may determine the short-term trend of the euro. The recent upward momentum of EUR/USD appears to be very strong. The current technical indicator, the 14-day relative strength index (RSI) indicator, maintains its bullish slope and suggests that the exchange rate may rebound to a certain extent after correcting the oversold conditions. The 9-day and 45-day moving averages formed a bullish "golden cross" last week, so on the upside, the resistance area of ​​EUR/USD is mainly concentrated in the 1.0550-1.0557 range. This price is not only a psychological barrier, but also happens to be the latest downward trend (Fibonacci rebound level from 1.0937 to 1.1077). If this area is broken, the exchange rate may further test the two pressure zones of 1.0600 (round mark) and 1.0646 (61.8%). On the downside, the short-term support level of EUR/USD is mainly concentrated around 1.0400 (round mark), and the 20-day moving average of 1.0404 coincides. If this support level is lost, the exchange rate may further pull back to 1.0356 (23.6% Fibonacci rebound level). Breaking the support level may trigger a larger downward adjustment.

Today, it is recommended to go long on the euro before 1.0478, stop loss: 1.0465, target: 1.0530, 1.0540.

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