USD

On Monday, after a relatively weak start in Asia, the U.S. dollar made no progress. All eyes were on geopolitics following the Biden administration's approval for Ukraine to use U.S. long-range missiles to strike Russian targets. The dollar index is currently below 106.20. The dollar has continued its strong upward trend for another week, maintaining a notable continuous rise, having achieved seven consecutive weeks of gains. Measured by the dollar index, the dollar even broke through the critical 107.00 threshold, setting a new high for the year to date. The dollar's strength began in early October when U.S. economic data was solid, and the recent so-called "Trump trade" further boosted the dollar's rise. Meanwhile, the Federal Reserve has taken a more cautious stance in assessing the next steps for interest rates. Fed Chairman Jerome Powell, in his latest remarks at an event in Dallas, noted that strong economic growth, sustained job market performance, and inflation rates consistently above the 2% target mean that the Fed can afford to be patient on the issue of rate cuts.

Observing recent trends, the dollar index is steadily climbing, with the 10-week and 20-week moving averages forming a "golden cross" bullish pattern. Therefore, the next key upward target is the recent high of 107.07, reached on November 14, followed by 107.18 (the 50.0% Fibonacci retracement level from 114.78 to 99.57), and the 2023 high of 107.34 (October 3), potentially reaching the highest round number level of 108.00 in two years. Conversely, if the dollar index begins to pull back, the first support level is at the psychological threshold of 106.00 and 105.95 (the upward trending line from this year's low of 100.16). If it falls further, the dollar index may drop further to the key support area of 105.38 (the 38.2% Fibonacci retracement level), and the round number level of 105.00.

Today, consider shorting the dollar index around 106.30, with a stop loss at 106.45 and targets at 106.00, 105.90.

WTI Spot Crude Oil

Crude oil prices have risen over 2% following escalating tensions between Russia and Ukraine over the weekend. The G20 meeting will prioritize the Ukraine peace agreement on its agenda. During Monday's Asian trading session, WTI crude oil prices stabilized above $67.00, reversing recent declines due to escalating tensions between Russia and Ukraine, which intensified market concerns about possible disruptions to crude oil supply. Additionally, oil prices are under pressure as Fed Chairman Powell tempered expectations for an imminent rate cut, emphasizing the economy's resilience, a strong labor market, and persistent inflationary pressures. Powell stated, "The economic situation does not signal the need for urgent rate cuts by the Fed." Rising long-term borrowing costs could negatively impact economic activity in the U.S., the world's largest oil consumer. Meanwhile, concerns over weakening demand in China, the world's largest oil importer, also fuel bearish sentiment in the oil market. China's recent 10 trillion yuan debt scheme lacks direct economic stimulus measures, further exacerbating market concerns about the outlook for China's oil demand.

Crude oil prices are beginning to show a pre-breakout pattern with lower highs and higher lows. From a purely technical perspective, a breakout seems imminent. Considering all these bearish factors, a decline seems more likely than an increase. On the upside, $69.50 is the first hurdle to consider before the psychological market barrier of $70.00, followed by $71.34 (the 50.0% Fibonacci retracement from $64.75 to $77.93). A break above could point to a $72.22 level. On the other hand, traders need to look towards the $66.18 level (the low on October 1st) to find the first support. If this level is breached, the low for 2024 to date will reach $64.75, followed by the 2023 low of $64.38.

Today, consider going long on crude oil around $69.00, with a stop loss at $68.80, and targets at $70.50 and $70.70.

XAUUSD

After last week's sharp decline, gold regained momentum, trading above $2600 on Monday. In the absence of major data releases, escalating geopolitical tensions helped stabilize gold prices. Gold prices rebounded strongly during Monday's Asian session, testing the $2600 threshold, as risk appetite returned due to geopolitical escalations between Russia and Ukraine. The latest development over the weekend was U.S. President Joe Biden authorizing Ukraine to use the U.S. Army Tactical Missile System (ATACMS) to strike inside Russia. As the conflict between Israel and Iran continues, the market remains cautious about further escalations in the Russia-Ukraine situation, which has stimulated safe-haven flows into the precious metal. Gold prices also benefited from China's efforts to boost activity in its stock market. The China Securities Regulatory Commission (CSRC) announced the expansion of the range of stocks that can be traded through the Shanghai-Hong Kong Stock Connect. As the world's largest consumer of gold, any supportive measures taken by local governments to boost economic performance seem to be positive for precious metals. Meanwhile, the broadly consolidating phase of the U.S. dollar also helped lift gold prices as buyers took a breather in the new week.

The short-term technical outlook for gold prices remains roughly unchanged, with any rebound attempts likely to be brief as long as the 14-day Relative Strength Index (RSI) on the daily chart continues to be bearish. However, the latest uptick in this leading indicator validates the rationale for the gold price rebound from the key support level at $2548, where the 100-day moving average (2548) and the September 18th low (2547) converge. In the process, gold prices will challenge the $2600 mark. Recapturing this level in the daily closing price is crucial for a further rise towards the November 13th high of $2619. Above that, the psychological barrier at $2650 and the 50-day moving average at 2653 could serve as strong resistance, capping any upward move. On the other hand, short-term support is at the aforementioned converging support levels of $2547-$2548. If the current intraday support level continues to break, a new round of declines will be initiated, targeting the $2500 threshold.

Today, consider going long on gold around $2608.00, with a stop loss at $2604.00, and targets at $2625.00 and $2630.00.

AUDUSD

The ongoing selling pressure around the U.S. dollar has provided additional support for the AUD/USD, pushing it back above the 0.6500 threshold before the release of the minutes from the Reserve Bank of Australia's meeting. Early in Monday's Asian session, AUD/USD strengthened to around 0.6470. However, cautious remarks from Federal Reserve officials and strong U.S. economic data across the board may limit the upside for AUD/USD. Data released over the weekend by the U.S. Census Bureau showed that U.S. retail sales in October were slightly higher than expected. Traders have lowered their expectations for a Fed rate cut in December. Last week, Fed Chairman Jerome Powell said, "The economic data does not show a signal that the Fed needs to rush to cut rates." On the Australian side, hawkish comments by RBA Governor Lowe might provide some support for the Australian dollar. The RBA reiterated that "the Board does not rule out any measures and must remain vigilant about the risk of rising inflation."

From the daily chart, the 14-day Relative Strength Index (RSI) has rebounded to around 40 from 31, although it is temporarily away from oversold conditions. However, if the RSI falls below 31-30 again, it could indicate oversold conditions, suggesting a potential upward adjustment. In the short term, the bears still dominate, with the next support level at 0.6500 (a round number), followed by the November low of 0.6440 (November 14), and then the 2024 low of 0.6348 (August 5). On the upside, initial resistance levels to watch are at 0.6600 (a psychological market barrier), and the 200-day simple moving average at 0.6629, followed by the November high of 0.6687 (November 7), and the resistance level at 0.6700 (a round number).

Today, consider going long on AUD/USD around 0.6500, with a stop loss at 0.6485, and targets at 0.6570 and 0.6600.

GBPUSD

The GBP/USD had a positive start to the week, regaining further traction against the backdrop of increased selling pressure on the U.S. dollar at the beginning of the week. Conversely, the pound remains optimistic and refocuses on the 1.2700 area. At Monday's Asian opening, GBP/USD was sluggish, consolidating in the range just above the 1.2600 level, which was the lowest level reached since mid-May last Friday. GBP/USD currently seems to have ended a six-day losing streak amid a slight pullback in the dollar, though the fundamental backdrop supports the continuation of the recent established downtrend. The dollar remains just below its year-to-date high set last Thursday, as bulls paused after a surge following the U.S. election. However, under expectations that policies of the newly elected U.S. President Donald Trump could reignite inflationary pressures and limit further rate cuts by the Fed, the dollar seems unlikely to rebound significantly. This is a key factor in the recent surge in U.S. Treasury yields, which suggests minimal upward resistance for the dollar. On the other hand, the uncertain future direction of interest rates by the Bank of England may make it difficult for the pound to attract buyers. Therefore, it is prudent to wait for strong follow-up buying to confirm that GBP/USD has formed a recent bottom.

GBP/USD continues its painful losses for the sixth consecutive day. Strong U.S. retail sales data boosted the dollar, dragging down GBP/USD. As GBP/USD broke below the 200-day simple moving average (1.2819) last week, it turned bearish. The 9-day (1.2780) crossing below the 200-day (1.2819) simple moving average forms a "death cross" bearish pattern. If the daily closing price remains below the psychological threshold of 1.2600 and the monthly low of 1.2597 (November 15th), this will pave the way for further declines. The following key support levels will be 1.2509 (the low of May 9th), and 1.2500 (a psychological level), followed by the low of May 8th at 1.2467. Conversely, if GBP/USD rebounds and rises above 1.2700 (a round number), and 1.2720 (the high of November 14th), the next resistance level will be 1.2800 (a round number), and the 200-day simple moving average level at 1.2819.

Today, it is recommended to go long on GBP at 1.2660, with a stop loss at 1.2650, and targets at 1.2720 and 1.2730.

USDJPY

The USD/JPY rebounded from 155.00 as the Bank of Japan did not provide a specific timeline for further rate hikes. Kato of Japan warned of possible interventions to support the yen from excessive volatility. Trump's protectionist policies are expected to accelerate inflation and economic growth in the U.S. Following a speech by Bank of Japan Governor Kazuo Ueda, the yen weakened against the dollar, losing some of the gains recovered since the lowest level on July 23 last Friday. Governor Ueda did not provide clues about a rate hike in December, which seemed to disappoint investors and pressurize the yen. In addition, generally positive market risk appetite is seen as another factor suppressing the demand for yen as a safe haven. Nonetheless, speculation about possible interventions by Japanese authorities to support their currency in the forex market curtailed aggressive short bets on the yen. Coupled with a sluggish dollar, this could pose resistance to the USD/JPY pair and limit its gains. Traders might also tend to wait and see, as Governor Ueda stated on Monday that the central bank would continue to raise policy rates if economic and price trends align with forecasts. This should introduce some volatility and stimulate demand for the yen.

From a technical perspective, USD/JPY demonstrated some resilience after re-crossing the 154.00 mark at Monday's open. Subsequent upward movement and the daily chart's 14-day Relative Strength Index (RSI) being favorable for bulls support the prospect of further appreciation during the session. If it can break through the 155.00 psychological barrier, this would reconfirm a bullish inclination and pave the way to recover the 156.00 level (mid-line of the daily chart's upward channel), with resistance near 155.70. On the other hand, the 153.85 area now appears to be an immediate support. A break below this area could see USD/JPY fall to the 153.65 area (14-day moving average), and then to the major 153.00 level and the nearby 152.70-152.65 area. If it clearly breaks through this support level, it might face a crucial level at the 200-day moving average, which has now turned into a support point, currently near 151.86.

Today, it is recommended to go short on the USD at 154.85, with a stop loss at 155.00, and targets at 154.00 and 153.80.

EURUSD

The EUR/USD further regained balance, breaking through the key 1.0600 threshold and reaching a three-day high, as the dollar softened further and Trump's rebound momentum weakened. During Monday's Asian session, the EUR/USD pair traded around 1.0560. After cautious remarks by Federal Reserve officials and stronger-than-expected U.S. retail sales data, the dollar strengthened across the board, increasing the downside risk for EUR/USD. Last week, Federal Reserve Chairman Jerome Powell moderated expectations for an imminent rate cut, emphasizing the economy's resilience, a strong labor market, and sustained inflationary pressures. Powell stated, "The economic situation has not sent any signals that we need to rush to cut rates." The European Central Bank remains dovish, putting continued downward pressure on the euro, with an expectation to lower policy rates at the upcoming December policy meeting. The overall inflation rate in the Eurozone is expected to sharply decrease from 5.4% in 2023 to 2.4% in 2024, then gradually decline to 2.1% in 2025 and 1.9% in 2026.

From a technical perspective, the bearish strength of the EUR/USD seems firmly established on the weekly chart. The pair's decline is well below all moving averages, only the 200-week simple moving average (1.0991) is providing downward traction, although it is higher than the directionless 20 (1.0921) and 100-week (1.0832) simple moving averages. Meanwhile, the 14-week Relative Strength Index (RSI) firmly heads south within the negative region, consistent with 2024’s lower lows. On the daily chart, the 20-day moving average (1.0745) is nearly vertically downward, over 200 points above the current level, and below the directionless 200-day moving average (1.0863), typically a sign of bearish dominance. Thus, breaking through 1.0500, and 1.0496 (November 14th threshold), the next level is the 2023 low of 1.0448 (October 3rd). This will eventually challenge the 1.0400 round number level. Resistance lies near the 1.0600 threshold, also a previous yearly low. A clear break above this level could see the pair continue its corrective rise to 1.0650, but selling interest may re-emerge near the 1.0700 threshold.

Today, it is recommended to go long on the EUR at 1.0585, with a stop loss at 1.0570, and targets at 1.0650 and 1.0670.

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