US Dollar Index

The US dollar index fell again on Tuesday, exacerbating Monday's losses, losing the key support of 106.00, and the lowest was 105.53. Investors sold the dollar after the United States confirmed new tariffs on Canada, Mexico and China, but did not approve an extension at the last minute. As Canada and China announced countermeasures, market volatility was further exacerbated. Market sentiment improved after European leaders, including Ukrainian President Zelensky, expressed their willingness to guarantee the Ukrainian peace agreement on Sunday. The plan now needs the support of the United States. The Canadian dollar and the Mexican peso were close to a one-month low on Tuesday, affected by US President Trump's announcement of a 25% tariff on Canadian and Mexican goods. The market's concerns about global trade have increased, and the US dollar index has retreated. However, the market still expects the US dollar to remain strong as increased global trade uncertainty may trigger more safe-haven demand. In addition, the policy direction of the Federal Reserve and the European Central Bank is still full of uncertainty, and the market needs to pay close attention to the policy responses of various countries in the coming weeks and their impact on the foreign exchange market.

The start of this week is full of uncertainty, and many factors are still loose since the outbreak in the White House office last Friday. Traders need to adjust to the new situation, as a headline can easily interrupt a good streak or trend in any asset, including the US dollar index. On the upside, the 106.00 round number is the first resistance to watch. This is followed by the 14-day simple moving average of 106.73, and the 107.00 round number. If the US dollar index can break through the 107.00 round number, 107.43 will come back into view. On the downside, 105.04 (200-day simple moving average), and the 105.00 round number need to hold as support. The nearby 104.32 (last November 8 low) is a key level that should act as support to avoid a fall back to the psychological low area of ​​104.00.

Consider shorting the US dollar index around 105.70 today, stop loss: 105.82, target: 105.20, 105.10

WTI spot crude oil

WTI crude oil was trading around $67.70 in early European trading on Tuesday. WTI prices fell slightly to a near 12-week low amid reports that OPEC+ will continue to increase oil production as planned in April. International oil prices continued to fall on Tuesday as US President Trump suspended military aid to Ukraine and prepared to impose new tariffs on Canada and Mexico. Market concerns about global economic growth have intensified, while OPEC+'s decision to increase production has also put pressure on oil prices. Despite the uncertainty of the global political situation, the latest Reuters survey showed that analysts generally believe that sufficient supply will curb oil price increases. Despite the new US sanctions on Iran and Russia and the possible short-term volatility of the Russia-Ukraine peace talks, the market as a whole expects oversupply and limited room for oil prices to rise. Despite the new US sanctions on Iran and Russia, these measures may not be enough to support oil prices. The market expects oversupply and prices may fall further. In addition, the Russian-Ukrainian peace talks may depress oil prices in the short term, but the long-term impact is limited. The news of the peace agreement may push WTI oil prices below $70, but the market will soon realize that the impact on oil production is limited and prices will rebound. The future trend of oil prices will depend on the policy adjustments of OPEC+ and the changes in the global political and economic situation.

As seen on the daily chart of WTI crude oil, the next major support level is at $67.50 (low of December 10 last year) and $66.80 (low of December 2024). If there is a sustained downward breakthrough, any further losses may open the door for it to move towards the support area of ​​$64.75 {low of September 10 last year}. The 14-day relative strength index (RSI) of the technical indicator is still in the negative zone near below 36, so WTI prices may correct gains and test the resistance level of $68.30-68.50. Once it re-crosses $69.90 (10-day moving average), and $70.00 (market psychological level), a bullish trend may be formed.

Today, consider going long on crude oil around 67.50, stop loss: 67.30; target: 68.80; 69.00

Spot gold

Further tariffs from the United States and retaliatory measures from various countries kept the trade war narrative alive well, with gold prices breaking through $2,920 per ounce on Tuesday, rising to a four-day high. Gold prices rose to around $2,921 during the European session on Tuesday, after rising more than 1% the previous day and expected to rise another 1% on Tuesday. The recent rise came after U.S. President Trump confirmed on Monday that tariffs on Canada, Mexico and China were imminent. The market remained skeptical on Monday whether President Trump would allow a delay in the implementation of tariffs based on the efforts made by these countries to meet the requirements of the Trump administration. It seems too late, and President Trump decided to implement the promised tariffs starting on Tuesday. Meanwhile, Canada and China have already expressed opposition to the unilateral tariffs of the United States. Amid the tit-for-tat trade war, US yields have slipped again. The 10-year US Treasury benchmark yield hit 4.11% in early trading on Tuesday, a near five-month low, returning to a level not seen since mid-October. As a result, gold prices returned to the psychological $2,900 level.

From a technical perspective, a break above the $2,900 mark needs to remain optimistic for bullish traders. Although the oscillators on the daily chart have lost momentum, they remain in positive territory and support the prospect of some dip buying around $2,860. Next is the multi-week low hit last Friday, around the $2,833-2,832 area, a break below which could accelerate the decline in gold prices to the $2,800 round mark. On the other hand, bulls are making new bets after continued strength and confirmation above $2,900. The subsequent rise could push gold prices to the intermediate resistance of $2,934, and in turn approach the record high of $2,956 hit last Monday.

Consider going long on gold today before 2,612.00, stop loss: 2,608.00; target: 2,930.00; 2.935.00

AUD/USD

AUD/USD extended its gains beyond 0.6250 as the prospect of US tariffs and a broad trade war weighed on sentiment. Additional losses in the US dollar and the cautious tone of the Reserve Bank of Australia minutes pushed the spot price higher. AUD/USD traded close to 0.6250 during the European session on Tuesday. This was despite the US dollar extending its downward trend. The US Dollar Index, which tracks the value of the greenback against six major currencies, returned below an 11-week low of 106.00. On the other hand, the Australian dollar may face strong selling pressure as US President Donald Trump announced an additional 10% tariff on China. Trump also imposed a 10% tariff on China in early February. Higher tariffs on Chinese goods will weaken their competitiveness in the global market. It is worth noting that Trump has yet to finalize similar orders on Mexico and Canada. Given that China is Australia’s main trading partner, any economic changes could have a significant impact on the Australian dollar.

AUD/USD traded close to 0.6200 on Tuesday, under pressure from the psychological 0.6300 level. This positioning signals weakening short-term momentum. Moreover, the 14-day relative strength index (RSI) of the daily chart remains below 50, further reinforcing the bearish outlook. Despite the downward pressure, the pair remains above the psychological support of 0.6200. A break below this level could push the price towards the support areas of 0.6164 (Jan. 17 low), and 0.6163 (76.4% Fibonacci retracement of 0.6087 to 0.6409). Further towards the 0.6100 round number). On the upside, initial resistance is at the psychological 0.6300 level, followed by the 14-day simple moving average of 0.6316.

Consider going long on AUD today until 0.6255, Stop Loss: 0.6240; Target: 0.6300; 0.6310.

GBP/USD

After initially climbing to a three-month high just below 1.2800, GBP/USD is now losing some upside momentum as the US dollar rebounded modestly, while market participants are preparing for President Trump's upcoming speech to Congress. GBP/USD retreated slightly after the gains recorded in the previous session, and held firm above 1.2700 in the European session on Tuesday. The pair held on to Monday's gains as the US dollar fell further amid escalating dovish bets from the Federal Reserve. The US dollar index slipped to near lows below 106.00. Traders raised bets that the Federal Reserve will resume its easing policy cycle at its June meeting, having paused rate cuts in January. According to the CME FedWatch tool, the probability of a rate cut by the central bank in June has risen to 86.9% from 69% a week ago. Looking ahead to this week, investors will be watching the US ADP employment change, US ISM services PMI and February non-farm payrolls data. These data will be released this week and may affect market expectations of the Fed's monetary policy outlook.

Technical analysis of the daily chart suggests a continued bullish bias, with GBP/USD's technical guide 14-day relative strength index (RSI) still above 65, indicating a strengthening of bullish momentum. In addition, GBP/USD continues to trade above the 9-day and 14-day moving averages, reinforcing the strength of short-term price dynamics and confirming the ongoing upward trend. GBP/USD may challenge the near-term resistance of 1.2834, the high of November 6 last year, followed by the approach of 1.2880. A break above this level may strengthen the bullish outlook and push the currency pair towards the psychological resistance of 1.2900. On the downside, GBP/USD may find initial support at 1.2725 {Monday's high) followed by 1.2700 {market psychological barrier}.

Today, we suggest going long on GBP before 1.2780, stop loss: 1.2765, target: 1.2830, 1.2840

USD/JPY

After USD/JPY plunged to around 148.10 yesterday, it rebounded in a "V" shape and consolidated slightly below 150. USD/JPY once fell below 149 yesterday, reaching a recent low of 148.10, as US Treasury yields fell sharply. Trump's tariffs on Canada, Mexico and China took effect today, weakening risk sentiment, while weak US data reinforced the view that the Fed's rate cut cycle is still sustainable. On the yen side, the Bank of Japan has room to further normalize its policy given the prospects for wage growth and the expansion of service sector inflation. Overall, the divergence between the Fed and the Bank of Japan's policies will continue to push USD/JPY lower. Despite weak domestic data, the Japanese yen maintained a positive bias in Tuesday's Asian trading session, with the unemployment rate unexpectedly rising and corporate capital expenditure falling for the first time in three years. Hawkish sentiment around the Bank of Japan's policy outlook, as well as risk aversion, have become key factors that continue to support the safe haven yen.

From a technical perspective, daily momentum is flat, while the 14-day relative strength index (RSI) of technical indicators has fallen. The preference is to sell on rebounds. If there is further weakness below 148.50, a move towards the next relevant support near the 148.00 round mark seems to be a distinct possibility. The downward trajectory may extend further to the 147.35-147.30 area, close to the 147.00 mark. However, a sustained strong break above the 150.00 level may trigger a short-term covering rebound and push USD/JPY to the intermediate resistance of 151.70-151.75, further towards the 200-day simple moving average located in the 152.39 area.

Today, we recommend shorting the US dollar before 150.00, stop loss: 150.20; target: 148.80, 148.60

EUR/USD

Amid a broad decline in the US dollar ahead of President Trump's first speech to Congress, EUR/USD further extended Monday's gains and reached a new yearly peak around 1.0620. EUR/USD rose during Tuesday's European session, above the key level of 1.0500. The pair remained strong as European leaders, including Ukrainian President Zelensky, reached a peace plan to end the three-year war in Ukraine. Europe's preparations to stop the carnage in Ukraine have improved the euro's appeal, assuming that a ceasefire between Russia and Kiev will restore broken supply chains in the eurozone. This week, the main trigger for the euro is the ECB's monetary policy decision scheduled for Thursday. Investors will closely watch the monetary policy statement and the press conference of ECB President Christine Lagarde after the policy decision. Market participants want to understand when the ECB will return to a neutral stance and how Trump's tariff agenda will affect the inflation outlook.

EUR/USD started the week with a strong rebound, breaking above 1.0450 and climbing above the key technical level of 1.0500 to show strength. The major currency pair is trading above the 100-day moving average, around 1.0508, indicating a bullish short-term trend. Reinforcing the shift in sentiment. The move comes after last week's struggle around these levels, when sellers temporarily suppressed the pair's gains. Technical indicators reflect this recovery. The 14-day relative strength index (RSI) has risen sharply in the positive territory, confirming the increase in buying pressure. Meanwhile, the moving average convergence/divergence (MACD) histogram shows a decrease in red bars, suggesting that although bullish momentum is strengthening, some consolidation may occur before another upward push. The immediate resistance is currently located at the 1.0700 round number mark), which, if broken, may accelerate gains to 1.0715 (180-day simple moving average). On the downside, support is located at the 110-day simple moving average of 1.0543. A break below this level would weaken the bullish outlook and bring the psychological level of 1.0600 into focus.

Today, it is recommended to go long on the euro before 1.0610, stop loss: 1.0600, target: 1.0660, 1.0670.

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