US Dollar Index

The US dollar saw an earlier recovery attempt erased ahead of the US cash. Traders are considering President Trump's upcoming comments and announcements. The US dollar index is trading just above 108.00 and could fall into the red if more selling pressure emerges. The US dollar exchange rate has been volatile following the inauguration of President-elect Donald Trump. The decline of the US dollar index accelerated as the market awaits further details of Trump's economic plan and the outlook is full of uncertainty. According to multiple sources, the new administration will set up a task force to investigate the impact of potential tariffs on Canada, Mexico and China before implementing any broad measures. Traders are closely watching for new signals on inflation concerns and interest rate changes. With no relevant data releases on Tuesday, investors are expected to continue to focus on announcements from the Trump administration.

The US dollar index lost key traction below 109.00 due to profit-taking and falling bond yields. The breakout of the 20-day simple moving average near 108.73, and 108.60 (recent lows) to a near two-week low of 107.87, highlights the growing vulnerability of the US dollar. If buying interest fails to emerge, the broader uptrend of the US dollar index may face more significant setbacks to 107.58 (low of December 20 last year), and 107.57 (38.2% Fibonacci retracement of 103.84 to 110.18). A break below will test 107.00 (round mark). Nevertheless, once the US dollar index is back on track, the first upside target is 108.57 (23.6% Fibonacci retracement). The next level points to the 109.00 (round mark) level.

Today, consider shorting the US dollar index around 108.15, stop loss: 108.30, target: 107.70, 107.60

WTI spot crude oil

WTI oil prices have experienced significant volatility as traders assess a series of executive orders issued by President Trump. Trump plans to impose a 25% tariff on Canadian imports, which increases the cost risk of most Canadian oil exports. U.S. President Donald Trump has rescinded former President Joe Biden's actions to restrict oil drilling. U.S. WTI crude oil prices traded around $76.00 on Tuesday. WTI prices attracted some sellers as traders awaited a series of executive orders from U.S. President Trump after he took office. Trump announced on Monday that he would immediately declare a national energy emergency, promising to fill strategic reserves and use his power to quickly approve new oil, gas and power projects that usually take years to obtain permits. The Trump administration will push for more oil and gas production as well as consumption in the United States, which could drag WTI prices lower. As tensions in the Middle East ease, the upside for crude oil prices may be limited. On the other hand, encouraging Chinese economic data may support black gold as China is the world's largest crude oil importer.

WTI prices struggled in a technical range of $69.00-70.00 for most of the fourth quarter of last year before surging to a peak of $79.37 per barrel at the start of 2025. As the price retreated to the 14-day exponential moving average near $76.00-75.50, gains were limited and three consecutive days of decline occurred. Despite the recent entry into a higher low pattern, the lack of a sustained pullback and sustained bullish momentum means that the early bull market in 2025 may end and return to the lows. The 50-day moving average is still below the 200-day moving average, and the lack of a meaningful crossover between the two key moving averages may give bears the opportunity to fall again. Therefore, on the downside, $75.48 (14-day moving average), and $74.01 (20-day moving average) can be watched. As for the upside resistance, the $78.57 level (61.8% Fibonacci rebound level from 87.12 to 64.75) can be watched. If it breaks, $79.37 (Friday's high) and then $80.00 (psychological level) will be seen.

Consider going long on crude oil near 75.70 today, stop loss: 75.50; target: 77.00; 77.20

Spot gold

Gold's upward momentum has increased, with prices trading at their highest level since early November at over $2,740 on Tuesday. Benchmark 10-year Treasury yields fell more than 1% to below 4.6% after U.S. President Trump issued tariff threats, helping gold move higher. In early trading on Tuesday, gold prices extended their rebound, retesting the monthly high of $2,725. Gold buyers have regained activity as U.S. President Trump's tariff threats have boosted risk aversion in financial markets. Investors have flocked to gold, a traditional safe-haven asset, pushing gold prices close to the monthly high of $2,746. Trump's tariff threats could reignite global inflation concerns, providing additional support for gold prices. Gold is considered a hedge against inflation. In the coming week, gold price trading will be influenced by broader market sentiment and Trump's tariff negotiations, as there are no top-level U.S. economic data releases.

The short-term technical outlook for gold remains constructive. This month's symmetrical triangle breakout is still in progress, while gold is firmly above all major daily simple moving averages, supporting the bullish scenario. The 14-day relative strength index (RSI), a technical indicator on the daily chart, is pointing upwards above the midline (latest at 66), suggesting that the short-term uptrend will continue. Gold will continue its upward trend to the psychological barrier of $2,750. A breakout points to the all-time high of $2,790. On the downside, gold may test the round-number mark of $2,700, a break below which will threaten the low of $2,670 on January 15. The 20-day moving average at $2,660.80 may become the next target for sellers.

Consider going long on gold today before 2,738.00, stop loss: 2,733.00; target: 2,760.00; 2,765.00

AUD/USD

AUD/USD failed to extend Monday's strong rebound, falling below the 0.6300 mark again, despite the continued bearish tone of the US dollar and a mild recovery in the risk complex. The Australian dollar gave up the previous session's strong gains on Tuesday. Nevertheless, AUD/USD rose as the US dollar weakened, and traders closely watched US President Donald Trump's economic policy updates, especially on tariffs. The market reacted positively to his decision not to announce any new tariffs. Traders are increasingly expecting that the Reserve Bank of Australia (RBA) may start cutting interest rates as early as next month. The People's Bank of China announced on Monday that it would keep the loan prime rate (LPR) unchanged. As China and Australia are close trading partners, any changes in the Chinese economy may have an impact on the Australian market.

The AUD/USD pair traded around 0.6260 on Tuesday, attempting to fall back to the descending channel on the daily chart. A successful fall back would indicate that the bearish bias is still in effect. The 14-day relative strength index (RSI) technical indicator, although it has returned to the 50 level (latest at 52.60), shows that the bearish bias is still in place. AUD/USD is testing the 20-day moving average at 0.6212, and 0.6200 (psychological level). Stronger support is located at the recent low of 0.6164 (Monday's low). If it falls below this level, AUD/USD may fall to 0.6100 (round mark) and fluctuate. On the upside, AUD/USD will test 0.6289 (Tuesday's high), and the psychological level of 0.6300. A breakout points to 0.6335 (50-day moving average).

Consider going long on AUD before 0.6260 today, stop loss: 0.6245; target: 0.6300; 0.6310.

GBP/USD

GBP/USD continued its upward trend on Tuesday, trading around 1.2340 after recording a gain of more than 1% in the previous session. On the other hand, GBP/USD faced challenges as the US dollar regained support after the previous session's decline as US President Donald Trump plans to instruct federal agencies to review tariff policies and assess the US's trade relations with Canada, Mexico and China. The US dollar was under downward pressure as US 2-year and 10-year Treasury yields remained low at 4.23% and 4.54%, respectively. Investors speculated that the Trump administration's policies could trigger inflationary pressures, which could limit the Federal Reserve to only one more rate cut. The pound strengthened as demand for UK gilts rose due to weaker-than-expected UK retail sales data for December.

GBP/USD briefly rose more than 1.3% to a near two-week high of 1.2350 as the pound was bought at the start of the week, although the short-term bullish momentum is entirely dependent on the weakness of the broader US dollar. GBP/USD remains well below its 200-day and 50-day moving averages, near 1.2791 and 1.2541 respectively. Last week, the pair fell to a 15-month low of 1.2099, ending a four-month decline. In the past 15 consecutive trading weeks, the pair has closed either flat or down except for two trading weeks. On the downside, 1.2250 (10-day moving average) and 1.2200 (round mark) can be watched respectively. On the other hand, if it can hold above 1.2350, it is expected to start a meaningful recovery with a target of 1.2385 (21-day moving average), and a break below it will target 1.2400 (market psychological mark).

Today, we recommend going long on GBP before 1.2330, stop loss: 1.2320, target: 1.2380, 1.2390

USD/JPY

Despite volatility following Trump's announcement that he may impose 25% tariffs on neighboring countries, USD/JPY remained stable. Market sentiment is optimistic. Focus on the upcoming Bank of Japan meeting; the possibility of a 25 basis point rate hike is expected. During the Asian session on Tuesday, the yen retreated sharply after hitting a five-week high, with USD/JPY falling 100 pips from the 156 psychological mark to a low of 154.90. U.S. President Trump's tariff remarks triggered a sharp rebound in the dollar from a two-week low hit on Monday, which once became a key factor in the yen's decline during the day. That said, the shift in global risk sentiment provided some support for the safe-haven yen. In addition, the market expects the Bank of Japan to raise interest rates at its monetary policy meeting later this week, which also helped limit the yen's significant depreciation. At the same time, the market is betting that the Federal Reserve will cut borrowing costs twice this year, leading to a recent decline in U.S. Treasury yields. The narrowing of the US-Japan interest rate differential has made traders reluctant to make aggressive bearish bets around the yen and limited the positive movement of USD/JPY on the intraday basis.

From a technical perspective, USD/JPY continues to show some resilience around the 155.00 mark and has so far managed to hold the support level representing the lower line of the multi-month ascending channel. Therefore, it would be wise to wait for a convincing breakout and acceptance of the above support level before positioning for the continuation of the recent decline from the multi-month high. On the other hand, the 14-day relative strength index (RSI) of the technical indicator on the daily chart is still in the negative zone (45.60), indicating that the short-term trend is still to the downside and the spot price may accelerate its decline to the intermediate support level of 154.50-154.45 and then fall to the 154.00 round mark. On the other hand, the Asian session high, around the 156.25 area, now seems to be an immediate obstacle. A sustained buy and break above the overnight high, around 156.58-156.60 area, could bring USD/JPY back towards the 157.00 mark. The rally could extend further to the 157.25-157.30 area, and then to the 157.60 area and the 158.00 round mark.

Today, it is recommended to short the US dollar before 155.80, stop loss: 156.10; target: 154.80, 154.60

EUR/USD

The EUR/USD has maintained a good bullish momentum and is looking to consolidate above the key 1.0400 mark as the US dollar performance is not convincing. EUR/USD remains in negative territory after paring recent losses, trading around 1.0400 in the Asian session on Tuesday. The euro remains under pressure as dovish expectations for the European Central Bank continue to dominate. The market expects a 25 basis point rate cut at each of the next four ECB policy meetings. The dollar regained its position after recent losses in the previous session, supported by news that President Trump intends to instruct federal agencies to review tariff policies and assess the US trade relationship with Canada, Mexico and China. However, the dollar faced resistance after Bloomberg reported that President Trump will not announce new tariffs immediately after taking office on Monday.

From the daily chart, the momentum indicators of EUR/USD's technical indicators are mixed. The 14-day relative strength index RSI rebounded to nearly 55, indicating that momentum has picked up, while the ADX fell to around 31 points, showing a contraction trend under the current trend. From the upside, the resistance level first looks at 1.0434-36 (4-day high in January), and the break points to 1.0494 (60-day moving average) and 1.0500 (round mark). On the other hand, as long as the pair remains below 1.0434-1.0436, the broader bearish trend may continue. In the shorter time frame, the temporary support level is at 1.0335 (20-day moving average), and the next level is at 1.0300 (round mark).

Today, it is recommended to go long on the euro before 1.0410, stop loss: 1.0400, target: 1.0460, 1.0470.

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