US Dollar Index

Before the weekend, the US Dollar Index, which measures the value of the US dollar against a basket of six major currencies, stabilized above 107.00 after January personal consumption expenditures (PCE) inflation data met forecasts, easing market concerns about an unexpected inflation spike. The dollar held onto its recent gains as President Trump reiterated that tariffs on Canada, Mexico and China will be implemented on March 4. Meanwhile, risk sentiment improved as US stocks erased earlier losses and moved higher. President Trump's comments on additional tariffs on Chinese goods have boosted the market's safe-haven demand for the US dollar. Financial markets have reacted. The dollar strengthened against most currencies, with the US dollar index rebounding to a three-week high near 107.66, and some bull flattening in the bond market, in line with the backdrop of low growth expectations. Markets are watching the sharp drop in cryptocurrencies last week. The MVDA index, a basket of the 100 largest digital assets, fell 20% last week. Given the prevalence of cryptocurrencies among American households, any further sharp declines and the threat of deleveraging in broader asset markets strongly support defensive positioning in the foreign exchange market (US dollar).

From the technical trend of the daily chart, the US dollar index strongly broke through the 106.99 (14-day simple moving average) and 107.00 (integer mark) area in late last week, and regained the 100-day simple moving average at 106.80. The 14-day relative strength index (RSI) and moving average convergence/divergence (MACD) indicators of technical indicators show improved momentum, but the bullish momentum still needs to be confirmed. At this stage, the initial resistance is at 107.71 (34-day simple moving average), and the next level of resistance will look at the 108.00 (market psychological mark) level. As for the downside, the 30-day (107.5) crossed below the 65-day (107.73) simple moving average last week, forming a "death cross" bearish pattern. Therefore, once the US dollar index returns to below 107.00-106.99, the first support level is 106.61 (105-day simple moving average). A break will further point to 106.00 (integer mark) and 106.13 (last week's low). If these levels are decisively broken, short-term price momentum may be weakened, pushing the index closer to a lower level.

Today, consider shorting the US dollar index around 107.70, stop loss: 107.82, target: 107.30, 107.20

WTI spot crude oil

Tariff risks hit market sentiment. Crude oil prices fell for the first time in four months, with WTI spot crude oil closing at $69.87 per barrel and recording its first monthly decline since November 2024. WTI crude oil prices finally broke below this year's key support level of $70.00 last week, having previously recorded a low of $68.30. Crude oil prices recorded their first monthly decline since November as concerns about global economic growth and fuel demand—under the influence of Washington's tariff threats and signs of a slowdown in the U.S. economy—outweighed supply concerns. Last week, US President Donald Trump announced that he was proposing 25% tariffs on Mexican and Canadian goods, including a 10% tax on Canadian energy imports, which would take effect on March 4, along with an additional 10% tariff on Chinese imports. However, oil prices rose more than 2% mid-week after Trump revoked the license granted to US oil giant Chevron to operate in Venezuela. Meanwhile, OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) is weighing whether to continue with its planned increase in oil production in April, or maintain current levels. But no consensus has been reached on confirming its April production strategy between March 5 and 7.

US WTI crude oil finally fell below this year's key support level of $70.00 to a low of $68.29 last week. Although there was a technical rebound before the weekend, it failed to break through the resistance of $70.00 (market psychological level) and $69.76 (76.4% Fibonacci retracement level of $66.80 to $79.37), and may retreat to the range of $68.50 per barrel (low of December 23 last year) and $68.30 (low of last Wednesday). If it fails this time, it may confirm that the rebound from $68.30-68.50 has been completed, or the first round of this rebound. It is expected that this trend will pull back to $67.50 (low of December 10 last year) and $66.80 (low of December 2024). It is not clear whether the rebound will continue. The first sign of continuation may be that the price stabilizes above $69.76-70.00. The market may push prices up to the 25-day moving average of $71.43 and $71.47 (Friday's high), and point to the 200-day moving average at $73.31.

Today, consider going long on crude oil around 69.68, stop loss: 69.50; target: 71.20; 71.30

Spot gold

Gold remains under bearish pressure, trading at its lowest level in three weeks. Uncertainties surrounding the Trump administration's trade policy and month-end flows appear to be weighing on gold prices. So far, gold prices have fallen 2.72% to $2,855.00 last week, the biggest weekly drop since November. U.S. gold futures fell 1.3% to $2,858.90. The U.S. dollar index rose, which makes dollar-priced gold more expensive for overseas buyers. The 30-year U.S. Treasury yield fell below 4.5%, the lowest since December 12. This also prevents gold from falling to the bottom as a safe-haven tool. Gold prices recorded their first weekly decline this year last week, as bulls took profits after hitting a record high. At the same time, President Trump's remarks on tariff policy and the strengthening of the US dollar also put pressure on gold. Gold prices fell to $2,833/ounce late last week. Trump announced that the tariff plan for Canada and Mexico will take effect on March 4 as scheduled, and additional tariffs on China will also increase. This makes gold less attractive to foreign investors and international demand for gold has declined. Although gold has recently pulled back, it hit a record high of $2,956.30/ounce this week, reflecting the market's uneasiness about Trump's tariff policy. Trump's tariff plan has triggered market concerns about US inflation, global trade and geopolitical risks, and the role of gold as a safe-haven asset has been fully reflected.

The daily chart shows that gold prices broke below the key psychological 2,900 level and the short-term support of the 20-day simple moving average of $2,895.50 late last week, exerting further downward pressure to the previous level of $2.833, a near one-month low. However, the 14-day relative strength index (RSI), a technical indicator, has not given up yet, although it has fallen below 50.00 to around 49.10. If gold bulls seek to close above the 20-day simple moving average support of $2,895.50 and $2,900 (market psychological level), it may push gold prices towards the 10-day simple moving average of $2,914.80 and further revisit the February 26 high of $2,930. The next upside target that buyers will focus on will be the record high of $2,956. If sellers exert pressure, the near-term support is at last week's low of $2,850, and a break below it will challenge the February 6 low of $2,834. The ultimate target will be the psychological barrier of $2,800.

Consider going long on gold before 2,850.00 today, stop loss: 2,845.00; target: 2,878.00; 2.885.00

AUD/USD

AUD/USD fell through 0.6200 to a three-week low of 0.6192 before the end of last week, after extending its decline for the sixth consecutive day. The Australian dollar has been under downward pressure, but it faced an additional blow after US President Trump proposed a 10% tariff on China last Thursday. The AUD/USD exchange rate continued its recent decline from just above the 0.6400 mark, the year-to-date high reached last week, and has been under pressure for the sixth consecutive trading day. The downward trend dragged the spot price to the 0.6200 round number and was supported by broad US dollar strength. The dollar index, which tracks the performance of the greenback against a basket of currencies, is expected to extend its nice rebound from its lowest level since December 10 this week as markets expect the Federal Reserve to maintain its hawkish stance. The second revised U.S. gross domestic product (GDP) data released on Thursday boosted market bets, showing continued rising inflationary pressures. This heightened market concerns that U.S. President Donald Trump's policies could reignite inflation and put additional pressure on the Federal Reserve to keep interest rates stable. In addition, Fed officials remain cautious about future rate cuts as inflation remains stubborn, which continues to support the dollar and exert downward pressure on the AUD/USD exchange rate. Apart from this, the possible economic consequences of Trump's tariff plan and risk aversion have also overshadowed the Reserve Bank of Australia's relatively hawkish outlook and driven funds out of the Australian dollar.

From a technical perspective, the AUD/USD exchange rate is currently trading around the 61.8% Fibonacci retracement level of 0.6210 from the lowest since April 2020 at 0.6087 hit earlier this month to the February high of 0.6409. Considering that the 14-day relative strength index (RSI) on the daily chart is still in negative territory (latest around 37) and has not yet entered the oversold zone, if the currency pair falls below the psychological level of 0.6200 again, it will be seen as a new trigger for bearish traders. The subsequent decline may drag the spot price to the support area of ​​0.6164 (January 17 low), and 0.6163 (76.4% Fibonacci retracement level), which will point to the 0.6100 round number and the four-year low of 0.6087. On the other hand, any attempt to rebound may face immediate resistance at the 0.6248 area (i.e. 50% Fibonacci retracement level). A sustained strong break above this level may trigger a short-term covering rebound, allowing the AUD/USD exchange rate to recapture the 0.6286 (38.2% Fibonacci retracement level), and 0.6290 (25-day moving average) levels. A decisive breakout would suggest that the AUD/USD pair has formed a short-term bottom and pave the way for further gains.

Consider going long AUD before 0.6195 today, stop loss: 0.6180; target: 0.6250; 0.6260.

GBP/USD

Weakened demand for GBP against the US dollar has led to a pullback in GBP/USD from a ten-week high of 1.2716. Despite showing resilience in the first half of last week, the British pound succumbed to continued safe-haven demand for the US dollar in the latter part of the week. As a result, GBP/USD ended a three-week rally, retreating from levels last seen in December 2024. The pair’s early gains were supported by expectations of a divergence in the outlook for rate cuts between the US Federal Reserve and the Bank of England. Despite strong UK inflation data and a bleak economic outlook, the Bank of England is expected to implement fewer rate cuts this year. This narrative has put pressure on the US dollar while supporting the British pound. Subsequently, the pair turned lower and abandoned the 1.2600 level. The US dollar has been indifferent to the release of weak US economic data and the continued decline in US Treasury yields as Trump's tariff threats have resurfaced, leading to a flight to safety. US tariffs and non-farm payrolls are in the spotlight this week. The start of the US non-farm payrolls release has been relatively calm, except for the volatility that may be caused by President Trump's tariff negotiations over the weekend.

The daily chart shows that GBP/USD has failed to maintain above the key 100-day simple moving average of 1.2626, despite a brief recovery to this year's high of 1.2715 in the first half of last week. The pair's pullback is reflected in the technical indicator 14-day relative strength index (RSI) retreating towards the 50 level (latest at 53.50). Although the indicator is still above the midline, its latest downward trend brings a bearish signal for the pair. If sellers apply additional pressure, the immediate downside target is the 25-day simple moving average of 1.2525. Further downside, the 50-day SMA near 1.2459 will provide some support for buyers. The last line of defense for bulls is set at the round number level of 1.2400. On the other hand, being recognized above the 1.22626 (100-day SMA) level is the key to unleashing a sustained upward trend, with targets pointing to the 1.2700 (psychological barrier), and 1.2715 (this year's high) area.

Today, it is recommended to go long on GBP before 1.2568, stop loss: 1.2550, target: 1.2620, 1.2630

USD/JPY

USD/JPY rose for the third straight day after bottoming out near 148.57 on Tuesday. Trading back above 150.00. The pair is trading near 150.50. USD/JPY has broadly stabilized after hitting a low of 148.57 last October and is now range-bound between 148.57 and 152.42. The yen continued to lose ground to a generally stronger dollar heading into the weekend, pushing the USD/JPY pair above the psychological 150.00 mark at the close of last week. Japanese government bond yields slipped after Prime Minister Shigeru Ishiba's government cut its budget plan for fiscal 2025/26 to 115.2 trillion yen and new bond issuance to 28.6 trillion yen. This is seen as a key factor weakening the yen. However, any meaningful yen depreciation seems elusive given the growing acceptance in the market that the Bank of Japan will continue to raise interest rates this year. The bet was reaffirmed by comments from Bank of Japan Deputy Governor Shinichi Uchida, who said underlying inflation is gradually rising toward its 2% target. This offset the impact of weak Tokyo consumer price index and, coupled with risk aversion, should limit losses in the safe-haven yen. Moreover, the pair has been trading in a range since the beginning of the week and remains close to multi-month lows hit earlier this week.

From a technical perspective, USD/JPY remains confined to a familiar range since the beginning of the week. The range-bound price action can still be classified as a bearish consolidation phase on the backdrop of a decline from around 158.88, or the year-to-date high hit in January. The negative outlook is reinforced by the fact that oscillators on the daily chart are deeply trapped in negative territory and remain far from oversold territory. This, in turn, suggests that the path of least resistance for USD/JPY is to the downside and supports the prospect of deeper losses. Meanwhile, the 149.00 round number mark appears to protect the near-term downside ahead of the 148.60-148.55 area. Some follow-up selling will be seen as a new trigger for bearish traders and drag USD/JPY to 148.00, heading towards the next relevant support in the 147.35-147.30 area and the 147.00 round number mark. On the other hand, a breakout and effective sustain above the psychological 150.00, and 150.01 (9-day EMA) area, the subsequent 150.70 (previous high from the weekend) may continue to act as an immediate barrier. However, a sustained strong break above the latter may trigger a short-term covering rally and push the USD/JPY pair further to the 150.90-151.00 horizontal support, which has now turned into a strong resistance. The momentum may further extend to the 20-day EMA at 151.50 and head towards the psychological 152.00 mark, although it is more likely to be limited around 152.42. The latter represents the very important 200-day simple moving average and should act as a key turning point.

Today, it is recommended to short the US dollar before 150.70, stop loss: 150.90; target: 149.80, 149.60

EUR/USD

Before the weekend, EUR/USD rebounded slightly to just below 1.0400. The major currency pairs moved higher, while the US dollar traded flat after the release of the US Personal Consumption Expenditures Price Index (PCE) data for January, which slowed in line with expectations. The US dollar index, which tracks the value of the US dollar against six major currencies, persisted with strong gains to a high of around 107.66. After trading in volatility for most of the week, EUR/USD plunged late last week, hitting 1.0360 before the weekend, a two-week low. The pair rebounded slightly from this level before the close, and finally closed around 1.0380. The pair tried to recover the 1.0500 threshold several times during the week, but quickly fell back from this level. The dollar was supported by the prevailing cautious mood, while weak US data raised concerns about the economic progress of the world's largest economy. Speculative interest increased bets on more rate cuts by the Federal Reserve this year. As a result, government bond yields retreated and Treasury bonds regained demand. Meanwhile, the back-and-forth of the US government's tariff plan shook the financial markets. US President Trump held a press conference on Wednesday, and financial markets concluded that new tariffs against Canada and Mexico will take effect in April.

From the daily chart, EUR/USD recovered slightly from the low of 1.0360 late last week to close the week slightly below 1.0400. The pair retreated sharply from the solid bearish 30-day simple moving average of 1.0422 and fell well below the slightly bearish 100 and 200-day simple moving averages. Technical indicators still signal cautiously, with the 14-day relative strength index (RSI) in negative territory (latest at 45.23), indicating a temporary pause in the bearish momentum. Meanwhile, the moving average convergence divergence (MACD) histogram showed a new red bar, indicating selling pressure. Therefore, the first downward support is at 1.0313 (61.8% Fibonacci retracement level from 1.0177 to 1.0533), and 1.0300 (market psychological barrier). After breaking through, the next level will be 1.0260 (January 16 low), and 1.0261 (76.4% Fibonacci retracement level). It will eventually point to the 1.0200 integer level. At the same time, if EUR/USD can stop falling and rebound, the 1.04 level is the first position that must be repelled. Secondly, it can further challenge the 1.0449 (23.6% Fibonacci retracement level), and 1.0448 (14-day simple moving average) area, and then the 1.0476 (89-day simple moving average) and 1.0500 (integer level).

Today it is recommended to go long on Euro before 1.0365, stop loss: 1.0350, target: 1.0420, 1.0430.

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