Dollar Index

Early this week, the dollar index decisively fell below 105, reaching a low of 104.25, as European currencies rebounded on the prospect of major fiscal stimulus. European leaders only react in crises - and the prospect of the United States withdrawing its security umbrella over Europe is undoubtedly a crisis. Market sentiment was affected by the US tariff policy on Canada and Mexico. Previously, the market had suspected that US President Trump might grant an extension before the deadline, but the United States finally implemented the established tariff policy as scheduled, triggering a chain reaction in international markets. Recent US economic data suggests that the US economy may be entering a phase of slow or even negative growth while US yields and the dollar are weakening, while inflation caused by tariffs remains high. Although the United States has now expanded its tariff policy to Canada and Mexico, weak domestic economic activity in the United States has led the market to expect the Federal Reserve to cut interest rates by 75 basis points this year instead of 50 basis points. This has prevented the dollar from strengthening on the tariff news.

As the yield gap between the United States and other countries continues to narrow, the strength of the US dollar will be further weakened. If market sentiment continues to develop in this direction, the US dollar index may even fall below 105.04 (200-day simple moving average) and 105.00. On the upside, the 105.00 round mark is the primary resistance level for the rebound. If the US dollar index can break through 105.00, 105.77 (Wednesday's high) will be re-included in the bulls' field of vision. On the downside, the US dollar index may face further adjustment pressure. The 14-day simple moving average of the technical indicators of the daily chart shows a downward bias in the short term, and the trend is weak, so the round mark of 104.00 and 104.25 (Wednesday's low) remain solid as support. If this important level is continuously broken, 103.34 (last November 6 low) may become the next downside target.

Today, consider shorting the US dollar index around 104.45, stop loss: 104.60, target: 104.00, 103.90

WTI spot crude oil

WTI crude oil fell for the third time this week during the European session on Wednesday (March 5), with major producers planning to increase production in April, coupled with concerns that US tariffs on Canada, Mexico and China will slow economic growth and hit fuel demand. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including OPEC+, decided on Monday to increase production for the first time since 2022. The organization will start a small increase of 138,000 barrels per day from April, the first step in a planned monthly increase in production to lift its nearly 6 million barrels per day production cuts, equivalent to nearly 6% of global demand. Unfavorable supply and demand dynamics have created a double blow, with tariff uncertainty posing a downside risk to global growth and, in turn, to oil demand.

WTI crude oil prices failed to break out of the resistance levels at $70.00 (psychological mark) and $70.45 {20-day EMA) levels. The price started a fresh decline and entered a bearish range. The bears seem to be gaining momentum below the key $68.80 level. On the upside, the price is facing resistance near $69.10 (9-day EMA). The main resistance is currently near the psychological $70.00 mark and if the price breaks above this area, it is likely to accelerate further upwards. In the mentioned case, the price might even test and further re-challenge the $70.45 {20-day EMA) level upwards. If there are more gains, the $72.00 resistance area is likely to be tested in the near term. On the downside, the first major support is near the $66.00 (psychological mark) area. A daily close below $66.00 might open the doors for a deeper decline. The next major support is $65.80. If it falls further, the oil price may fall to the level of $64.75 {last year's low on September 10} in the next few days.

Today, consider going long on crude oil around 65.80, stop loss: 65.60; target: 67.50; 68.00

Spot gold

On Wednesday, gold shook off its initial decline and rose slightly, returning to the range of $2,920 per ounce after the US ISM Services Purchasing Managers Index showed a rebound in service inflation and employment in February. Against the backdrop of escalating trade conflicts after US President Trump imposed new tariffs, the dollar weakened to a near three-month low, and increased safe-haven demand pushed gold prices up, reaching an intraday high of $2,930/ounce, marking two consecutive trading days of gains. As gold prices approach historical highs, the risk of a sharp correction is increasing. Technically, the gold price trend looks similar to the peak in 2011, when the gold price hit a historical high above $1,900 per ounce, and then fell sharply, remaining in a slump until 2018. She said that when gold peaked in 2011, it corrected 45%. Although gold has attracted safe-haven buying as stocks fall, investors should proceed with caution. The risk is that investors may sell gold to raise cash to cover stock losses and generate capital. In an environment of heightened economic uncertainty, it is expected that US Treasuries and cash will be safe haven assets that investors turn to.

Gold prices extended Monday's gains at the start of this week's trading session. The range of intraday pivot levels has become tighter, confirming the current hesitation of investors after last week's decline. Currently, the 25-day moving average of $2,889 and the intraday resistance of $2,900 (a psychological level in the market) have now changed to provide support for gold, trying to push gold prices higher. If gold has enough momentum to continue to rise, $2,930 (Wednesday's high), the subsequent rise may push gold prices to the intermediate resistance of $2,934 and approach the all-time high of $2,956 set on February 24. On the downside, in addition to the aforementioned 25-day moving average of $2,889, and the support area of ​​$2,882 (Tuesday's low). Further downside, the 34-day moving average support of $2,850 should withstand any additional downward pressure.

Consider going long on gold before 2,914.00 today, stop loss: 2,910.00; target: 2,935.00; 2.940.00

AUD/USD

AUD/USD rose for the third consecutive day, re-crossing the 0.6300 mark against the backdrop of a sharp decline in the US dollar, while a solid record of cases in Australia also added to the momentum. Australia's real GDP in the fourth quarter was in line with consensus expectations. The economy grew 0.6% quarter-on-quarter, compared with 0.3% in the third quarter. Both public and private spending contributed to the growth, supported by increased exports of goods and services. On an annual basis, real GDP grew 1.3% in the fourth quarter, slightly higher than the 1.1% forecast by the Reserve Bank of Australia. The Reserve Bank of Australia expects growth to return to its 2% trend by 2025. The Reserve Bank of Australia remains cautious in providing support for the Australian dollar. Deputy Governor Andrew Hauser reiterated overnight that the Fed does not currently share the market's confidence that further rate cuts are needed. Interest rate futures imply nearly 75 basis points of easing over the next 12 months, with a 25 basis point cut in May, as rising trade tensions weigh on the global economic outlook. On Wednesday, the Australian dollar rose to a near one-week high near 0.6290 against the US dollar during the day. AUD/USD remains higher as concerns over slowing growth and the impact of tariffs on the US economy grow.

AUD/USD traded above 0.6300 on Wednesday, seeing around 0.6340, with technical analysis of the daily chart showing the pair trading around its 89-day moving average of 0.6341, suggesting stronger short-term momentum. In addition, the 14-day relative strength index (RSI) rebounded above 55, further reinforcing the bullish outlook. On the downside, AUD/USD may target 0.6200 (round number), and the four-week low of 0.6187 recorded on March 5, as the 9-day (0.6282) moving average fell below the 30-day (0.6287) moving average to form a bearish “death cross” pattern. A break below this level may open up further declines to 0.6087, the lowest level since April 2020, recorded on February 3. Initial resistance is initially at 0.6373 (100-day moving average), and the next level is a stronger resistance level at the market psychological level of 0.6400.

Today, consider going long on AUD before 0.6322, stop loss: 0.6310; target: 0.6370; 0.6380.

GBP/USD

So far, the optimism surrounding the British pound has remained intact, with the pair hovering near multi-month highs around 1.290 just below 0 following a weaker dollar and cautious comments from BoE’s Bailey. GBP/USD remained elevated around 1.2890 during European trading hours on Wednesday. The dollar hovered near a three-month low amid concerns about slowing US growth and new stimulus measures in China. The focus shifted to US data and Bailey’s testimony. GBP/USD rose to near 1.2870 during early European trading hours on Wednesday. The dollar hovered near a three-month low amid concerns about slowing US growth and the impact of tariffs. Concerns about weak US and global economic activity played out in the market, with cyclical stocks driving the sell-off, in addition to Trump’s 25% tariffs on Mexican and Canadian imports taking effect on Tuesday, while tariffs on China were raised to 20%. Bank of England Governor Andrew Bailey believes that re-emerging inflation is not a cause for concern. Expectations for gradual monetary expansion were supported by rising wage growth in the UK, which could keep inflationary pressures on the rise.

From the daily chart, GBP/USD is currently trading in the upper half of its uptrend this year, just below 1.2900. In addition, the 14-day relative strength index (RSI) indicator of the technical indicator remains above 70, reflecting a bullish stance.

On the upside, 1.2924 (61.8% Fibonacci rebound from 1.3434 to 1.2099) serves as the first resistance level, followed by 1.3000 (round mark). If GBP/USD turns from rising to falling, the immediate support level may be 1.2844 (78.6% Fibonacci rebound from 1.3044 to 1.2099), and the 1.2850 mark as the first support level, followed by the 1.2800 (market psychological mark) level.

Today, we recommend going long GBP before 1.2880, stop loss: 1.2865, target: 1.2930, 1.2940

USD/JPY

The yen gave up most of its intraday gains against the dollar, pushing USD/JPY back close to the 149.00 mid-level during Tuesday's European trading session. Data released by Japan earlier on Tuesday showed an unexpected rise in unemployment and a first decline in corporate capital expenditure in three years, which in turn drove some yen selling. However, any meaningful depreciation of the yen still seems elusive following the hawkish sentiment surrounding the Bank of Japan's policy outlook. Beyond that, risk aversion and US President Trump's threats to devalue the Japanese currency should favor the yen. It would be prudent to wait for some follow-through buying before confirming that USD/JPY has formed a near-term bottom. USD/JPY is likely to trade between 148.80 and 150.70. In the long term, the failure to hold below 148.50 suggests that the US dollar may enter a period of indecision. Currently trading in the 148.00/151.50 range, USD/JPY rebounded after recording losses in the previous two days and traded around 149.00 during the European trading session on Wednesday.

Daily chart analysis shows that USD/JPY is moving downwards within a descending channel, indicating a confirmed bearish bias. USD/JPY remains below the 20-day moving average (150.79), indicating weak short-term price momentum. Moreover, the 14-day relative strength index (RSI), a momentum indicator, is around the 35 level, further reinforcing the ongoing bearish bias. On the support side, USD/JPY may target the five-month low of 148.10 recorded on March 4, and 148.00 (psychological level). A successful breakout of this key support range may strengthen the bearish bias and put pressure on the pair to test the lower line of the descending channel at 146.70. On the upside, USD/JPY may first encounter the psychological market resistance of 150.00. A break above this level may improve short-term price momentum and support the pair near the 150.82 (20-day moving average) level.

Today, it is recommended to short the US dollar before 149.00, stop loss: 149.30; target: 148.00, 147.90

EUR/USD

EUR/USD has extended its impressive weekly rebound, hovering slightly below 1.0800 or multi-month highs on the backdrop of general optimism in the risk complex and a clear pullback in the US dollar. On Wednesday, EUR/USD extended the previous day's strong upward trend during European trading hours, reaching around 1.0750-60, the highest level so far this year. Major currency pairs strengthened as investors sold the US dollar amid growing concerns about the US economic outlook. The US dollar index fell to a more than three-month low below 105. A series of events changed market participants' views on US President Donald Trump's tariff agenda. Investors expect Trump's tariffs to slow US economic growth, rather than benefiting growth and inflation as they had earlier predicted. In the short term, policy divergences with the Federal Reserve and geopolitical risks may keep the euro under continued downward pressure. Investors need to pay close attention to the ECB's policy moves, economic data, and changes in risk sentiment in global markets.

In the middle of the week, the euro recorded its best single-day performance in more than two years, reaching a high of 1.0796, bringing its bull market gains this week to an impressive more than 3%. EUR/USD broke through the 1.0700 mark for the first time since December last year and is expected to reach a new five-month high amid continued buying by bulls. However, significant technical resistance is beginning to emerge. The 1.0800 round mark, as well as 1.0817 (61.8% Fibonacci rebound from 1.1214 to 1.0177) are on standby, and the next level is the 1.0900 round mark. Technical oscillators are also in overbought territory, suggesting that buyers may soon run out of momentum, inspiring a new round of bearish bidding. Therefore, the first support level can be considered 1.0751 {300-day moving average}, and if it breaks, it will turn to 1.0700 {market psychological barrier), and 1.0695 (50.0% Fibonacci rebound level) area.

Today, it is recommended to go long on the euro before 1.0775, stop loss: 1.0765, target: 1.0830, 1.0840.

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