US Dollar Index

The US Dollar Index hovered just below 97.00 on Monday, continuing to hover at its lowest level since February 2022, having earlier hit a low of 96.79, as markets are facing a more dovish Federal Reserve outlook, growing fiscal concerns, and ongoing trade uncertainty. Investors are awaiting key US employment data this week, which could show signs of labor market weakness and further support the stance of an early rate cut in July. Although the Fed has previously cited the resilience of the labor market as a reason to remain patient, a weak June employment report could prompt policymakers to act sooner. Meanwhile, the focus remains on the broad tax and spending bill currently being considered in the Senate, which is expected to increase the national debt by $3.3 trillion and further weigh on sentiment. On the geopolitical front, the ceasefire between Israel and Iran appears to be holding, easing global tensions and weakening safe-haven demand for the dollar.

The monthly chart shows a significant (downward) trend in the US Dollar Index, showing a decline of more than 12% since the year-to-date high above the 110.00 mark in mid-January this year. The 14-day relative strength index (RSI) of the daily chart's technical indicators has dropped to the 32 area and is close to the overbought zone, while the average directional index (ADX) shows a lack of trend strength around 15. The bias is still in favor of a bearish one. That said, once the multi-year low of 97.00 (June 27) is broken, the index could head towards the low of 95.13 on February 4, 2022, slightly above the 94.62 benchmark on January 14, 2022. On the upside, initial resistance appears in the 98.00 {round number}, and 98.03 {9-day simple moving average} areas. Follow-up buying above this level could pave the way to the 98.41 level of the June 24 high. A decisive break above the above levels could see a rally to the psychological level of 100.00.

Today, consider shorting the US dollar index around 96.95, stop loss: 97.10, target: 96.50, 96.40

WTI spot crude oil

WTI crude oil is flat, trading around $64.50/barrel. Four representatives from OPEC+ said the organization plans to increase daily production by 411,000 barrels in August, having previously planned to implement a similar increase in July. OPEC+ includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies. As soon as the report of OPEC's production increase came out, prices collapsed. Crude oil prices fell more than 12% last week after the ceasefire between Israel and Iran. This week, oil prices are focusing on geopolitical and trade news while focusing on non-agricultural data, but due to the US Independence Day holiday on Thursday and Friday, trading is light, and the impact of non-agricultural data on oil prices may be delayed, but in the first three trading days of this week, the long and short positions of US oil may be repeatedly seen at the $64/barrel mark, and it is the key to whether the short market can continue.

From a technical perspective, the daily chart of US crude oil shows signs of stabilization. Last week, oil prices rebounded quickly after falling below the key support level of $64.00 to a near-week low of $63.72. They are currently trying to regain the $65.00 round mark and the 30-day moving average of $65.16. At this stage, the market may enter a technical repair phase in the short term. The 14-day relative strength index (RSI) of the daily chart continues to fluctuate in a narrow range of 45-47, indicating that the selling pressure has eased. If WTI can effectively break through the $65.00 round mark and the short-term resistance level near the 30-day moving average of $65.16, it is expected to further rise to the $67.53 level {June 24 high}; on the contrary, if it falls below $64.00 again, it will open up the downward space to $63.72. And further downward test $63.00 {round mark}, and $62.20 {June 6 low} level.

Today, you can consider going long on WTI crude oil around 64.30, stop loss: 64.10, target: 66.00, 66.30

Spot gold

On Monday, spot gold rose, once reaching a low of around $3,245/ounce, a new low in a month, and then rebounded to around $3,300. Optimistic trade news boosted risk appetite and weakened the attractiveness of gold as a safe-haven asset; the ceasefire agreement between Iran and Israel was maintained, although there were some frictions at the beginning. This week, the market will welcome the group talks of the world's major central bank governors (Fed Chairman Powell, European Central Bank President Lagarde, Bank of England Governor Bailey, Bank of Japan Governor Kazuo Ueda, and Bank of Korea Governor Lee Chang-yong). The market will also welcome non-farm data. In addition, Powell's remarks on whether to resign may ignite the market this week. Gold prices may fluctuate more around the range of $3,250-3,350/ounce this week.

From a technical perspective, gold prices maintain a bullish trend on the daily chart, and prices remain above the key 8-day simple moving average of $3,199 and $3,200 {integer mark}. However, in the short term, the 14-day relative strength index (RSI) of the technical indicator of the daily chart is below the midline near 46.15, suggesting that there is a high possibility of further decline. The first upward obstacle for gold appears near $3,300 {market psychological mark}. Sustained trading above this level could push the pair back to the 34-day simple moving average level of $3,324.50 and, in turn, to $3,350.50 {June 26 high}. In the bearish scenario, initial support for gold is at $3,245, Monday's low. A break below this level could see gold prices slide further towards the $3,200 round number.

Consider going long on gold near $3,298 today, stop loss: 3,293, target: 3,325, 3,330

AUD/USD

AUD/USD gained momentum near 0.6560 on Monday. The dollar was weighed down by the resurfacing of trade concerns from the White House, which appeared to have failed to deliver on its promised broad global trade reforms. A senior adviser to U.S. President Donald Trump said on Friday that an agreement with up to 12 of the United States' largest trading partners is expected to be completed by the July 9 deadline, however, uncertainty remains as it is unclear whether the government will stick to the deadline or extend it to allow more time for negotiations. This in turn has weighed on the U.S. dollar and provided a tailwind for the currency pair. The market generally raised bets that the Federal Reserve will cut interest rates more times this year, and possibly earlier than previously expected, as some U.S. economic data pointed to economic weakness, which further increased downward pressure on the dollar.

From a technical perspective, the AUD/USD rebounded from the low of 0.5914 in April this year and is currently approaching an 8-month high of 0.6585. From the perspective of exchange rate performance, the Australian dollar is stronger than the U.S. dollar, but weaker than other major currencies, indicating that the market is still cautious about the outlook for the Australian dollar itself while betting on non-U.S. currencies. The exchange rate continues to run above 0.6500 {market psychological level}, and 0.6501 {20-day simple moving average}, indicating that the current trend is still in a mild bullish state. The 14-day relative strength index (RSI) of the technical indicator of the daily chart has not yet entered the overbought area, and there is still room for upside in the short term, but the momentum is not enough to support a strong breakthrough. Therefore, the upper 0.6600 {integer mark} constitutes the first strong resistance level, and a break will point to 0.6681 {last November high}. The current direct support level is 0.6500 {market psychological mark}, and 0.6503 {20-day simple moving average}. Below this is the 50-day simple moving average near 0.6457.

Today, you can consider going long on the Australian dollar near 0.6560, stop loss: 0.6550, target: 0.6600, 0.6610

GBP/USD

GBP/USD rose slightly during the Monday session, trading around 1.3740. As traders expect the Federal Reserve to cut interest rates at the September meeting, the US dollar may depreciate further, so the currency pair may rise. The coming week will see a series of key US employment data, which may further provide new impetus to the Fed's policy outlook. GBP/USD also appreciated as the pound received support from the Bank of England's cautious attitude towards rate cuts as inflation in the UK remains stubborn. Core inflation has remained largely unchanged over the past year, which has caused concern among BoE officials and complicated the decision to cut interest rates. At the same time, political tensions in the UK have increased as Prime Minister Keir Starmer scaled back welfare reform plans to curb rebellion within his ruling Labour Party.

The upside bias of GBP/USD remains, but buyers seem to have lost some momentum after approaching multi-year highs of 1.3770. However, the momentum shown by the 14-day relative strength index (RSI) on the daily chart suggests that bulls may retest 1.3770 {last week's high}, and 1.3800 {market psychological level} in the short term, breaking through which will look towards 1.3875 {August 13, 2021 high} level. On the other hand, if GBP/USD falls below 1.3700, it is expected to fall to 1.3660 {6-day moving average} as the first support range. The next psychological level of 1.3600 becomes a key support level.

Consider going long GBP around 1.3716 today, stop loss: 1.3702, target: 1.3770, 1.3780

USD/JPY

The USD/JPY exchange rate weakened to around 144 yen per dollar on Monday as the US dollar continued to fall. This was due to a more dovish outlook from the Federal Reserve, rising fiscal concerns and continued trade uncertainty. The market is preparing for key US employment data this week, which may reveal signs of labor market weakness and support expectations of a July Fed rate cut. Domestically, Japan's industrial output grew less than expected in May as US tariffs continued to weigh on the outlook. The 25% tariff on Japanese auto imports remains a major point of contention in trade talks between Washington and Tokyo, with reports showing little progress. Investors will be watching the Bank of Japan's quarterly tankan survey, which is due to be released on Tuesday, for fresh insights into corporate sentiment and the broader economic landscape.

The moving average convergence/divergence (MACD) on the daily chart is flattening, the strength of the histogram bars is fading, and the signal line is trending sideways. This suggests a lack of bullish follow-through after failing to break above the 148.00 area last week. Last week, a weaker yen fueled a rebound that briefly lifted the pair to retest the psychological 148.00 level. However, profit-taking and a lack of bullish follow-through triggered a reversal, indicating a weakening buying interest around the 148.00 level. The pair then fell below the 20-day moving average again, which now turns into resistance at 145.63. Reflecting sellers' hesitation, if the price falls back below the 144.00 round-figure mark, it faces the risk of a further slide to last week's low in the 143.75 area. It could eventually drag towards a test of the 143.00 psychological barrier level. A breakout would target 142.38 {June 3 low}. On the other hand, a sustained strong break above the 20-day moving average followed by a move above the 145.00{round mark}, and 145.78 mark area could negate the bearish outlook. USD/JPY could once again pave the way for further short-term gains towards the 146.00 round mark.

Consider shorting the dollar around 144.30 today, stop loss: 144.50, target: 143.20, 143.00

EUR/USD

EUR/USD climbed to a new yearly high of 1.1790 on Monday as the dollar continued to be hit by the prospects of the approval of the US fiscal budget and the expected impact of the Trump administration's continued progress on trade agreements with major trading partners. The dollar weakened against the euro as traders believed that the Federal Reserve would cut interest rates at its September meeting. Data released last Friday showed that US personal spending unexpectedly fell in May, the second decline this year. Meanwhile, US personal income fell by 0.4% in May, the largest drop since September 2021. Traders are betting that the U.S. central bank will cut rates more often, and possibly sooner than previously expected, weighing on the dollar and creating a tailwind for major currency pairs. Across the Atlantic, ECB Governing Council member Claes Knott said on Friday that current interest rates are “a good level,” adding that at least one more 25 basis point (bps) cut is expected by the end of 2025.

The daily chart for EUR/USD shows that the pair is now above the bullish 9-day {1.1638}, and 20-day simple moving averages {1.1550} before accelerating upwards. The pair has risen for eight consecutive days, which suggests the possibility of an upcoming corrective pullback, or at least some consolidation before the next directional move. The same chart shows that the technical indicator 14-day relative strength index (RSI) is also in overbought territory (73.90), moving in overbought territory but maintaining a mild upward slope above the midline, limiting the possibility of a sharp corrective decline. The previous 2025 highs at 1.1700{round mark}, and 1.1650{9-day simple moving average} serve as key support, breaking below this level will open the door to test the 1.1600 mark, and buyers should defend the downside. Resistance is at 1.1795{upper rail of the upward channel on the daily chart}, and 1.1800{market psychological mark} area. Once broken, the next demand area will be 1.1886{September 2021 high} level.

Today, you can consider going long on the euro near 1.1770, stop loss: 1.1760 target: 1.1830, 1.1850

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