US Dollar Index

The US dollar consolidated before the close of last week. It is expected to be an eventful week with the US set to impose tariffs on China; Mexico; and Canada on Saturday. The US Dollar Index, which measures the value of the US dollar against a basket of currencies, moved further away from 108.00 ahead of the highly anticipated weekend for global trade policy, approaching a weekly high of 108.40. On the other hand, the US dollar fell after disappointing GDP in the fourth quarter, but erased all losses after Trump touted the tariff threat. And with the tariffs on Canada and Mexico set to take effect last Saturday, the market is expected to be volatile. Moreover, it was reiterated in last Friday's meeting that February 1 will be the deadline for the tariffs on Canada and Mexico. In addition, the US government confirmed that the tariffs on Canada and Mexico will be 25% and on China will be 10%. Meanwhile, President Trump reiterated his opposition to the BRICS' attempt to introduce a new currency for international trade and vowed to impose severe tariffs in response. The release of December personal consumption expenditures (PCE) inflation data confirmed stable pricing pressures, reinforcing expectations that the Federal Reserve will maintain cautious policy adjustments.

The daily chart shows that the US dollar index closed higher for four consecutive trading days last week starting from Tuesday, and remained above 108.00 and close to the weekly high of 108.50. Technical indicators show a mixed outlook, with the 14-day relative strength index (RSI) slightly above 50 and continuing to rise. The rebound momentum may still be intact. The red bar of the moving average convergence divergence (MACD) appeared, reflecting cautious sentiment. If the US dollar index continues to recover, the first resistance levels to be crossed will be around 108.50 (Friday's high), and 105.55 (21-day moving average) respectively. Further tests of 109.00 (round mark), and 109.05 (23.6% Fibonacci retracement level from 105.41 to 110.18) area levels. Downward support will be around 108.00 (market psychological barrier) and 107.80 (50.0% Fibonacci retracement level). If it breaks, it will test 107.50 (lower track of the large horizontal channel on the daily chart) and 107.09 (70-day moving average). Any unexpected tariff developments over the weekend may trigger new fluctuations, thus affecting the recent trend of the US dollar.

Today, you can consider going long on the US dollar index around 108.30, stop loss: 108.20, target: 108.70, 108.80

WTI spot crude oil

International oil prices narrowed their losses last week, but eventually closed lower for the week as the market assessed the impact of the US tariff threat on Canadian and Mexican crude oil imports that may take effect on Saturday. US WTI crude oil fell about 2.14% to close at $72.80 per barrel, and once fell to a near one-month low of $71.72 during the session. Mainly due to investors' concerns about the Trump administration's possible tariffs. Traders assess the impact of the U.S. tariff threat on Canadian and Mexican crude oil imports that took effect on Saturday. Oil traders will closely monitor the outcome of a meeting of the Organization of the Petroleum Exporting Countries and its allies, including Russia, (OPEC+), scheduled for next Monday. Trump reiterated his call for OPEC and Saudi Arabia to lower oil prices, saying that lower crude oil prices will end the conflict in Ukraine. On the other hand, the Russian oil industry facing tougher U.S. sanctions could boost crude oil prices.

From a fundamental perspective, the surge in crude oil inventories, coupled with the impact of U.S. policy uncertainty, has driven up risk aversion and put pressure on commodities to rebound. Under the premise of further slowdown in demand expectations, the rebound in oil prices is slightly insufficient, so be careful of further declines after the rebound. On the technical level of the daily chart, the MACD indicator has been declining continuously and accelerating again. Before it stabilizes in the short term, it may adjust further. Although the 14-day relative strength index (RSI) is still low (49.90), the downward momentum has slowed down after the continuous decline. The correction seems to be coming to an end, waiting for a rebound correction. The daily line is waiting for the 55-day (71.54) and 100-day (71.07) moving average support confirmation. This is the next major target of the correction bearish wave. A break will extend the decline to $70.00 (market psychological level), and the expected decline will continue to be valid. Unless oil prices can stabilize upward again in the short term and close above the $73.00 integer level, and $73.29 (38.2% Fibonacci rebound level from 87.12 to 64.75). The next upward target is $73.82, the 200-day moving average, followed by the resistance area of ​​$75.93 (50.0% Fibonacci rebound level) and $76.00 (round mark).

Today, you can consider going long on crude oil around 72.65, stop loss: 72.50; target: 74.50; 74.80

Spot gold

Before the weekend, the international gold price broke through the record high of $2,817 and entered a bullish consolidation phase, mainly due to the weak US economic data and the market betting on the Fed to cut interest rates in March. At the same time, concerns about the possible economic impact of US President Trump's tariff plan and geopolitical tensions continue to drive demand for safe-haven gold. In addition, the market expects that Trump's protectionist policies will push up inflation, which is further conducive to the hedging effect of precious metals against rising price pressures. That is, the Fed paused for the first time since the easing cycle began in September, and the relatively hawkish outlook triggered a mild rebound in US Treasury yields. This helped the dollar to maintain its weekly gains and limited further gains in non-yielding gold prices. Currently, gold prices have entered a bullish consolidation phase after hitting a record high. At this stage, gold prices are trading around $2,800. Concerns about the possible economic impact of US President Trump's tariff plan, as well as geopolitical tensions, continue to drive demand for safe-haven gold. Moreover, the market expects that Trump's protectionist policies will push up inflation, further favoring the precious metal's role as a hedge against rising price pressures.

From a technical perspective, continued strength and acceptance above $2,800 will be seen as a new trigger for bulls. That said, the 14-day relative strength index (RSI), one of the technical indicators on the daily chart, is about to enter the overbought zone (latest at 68.75). This makes it prudent to establish new bullish bets and position to continue the strong gains of the past month or so before some short-term consolidation or mild pullback around gold prices. Meanwhile, any corrective decline is more likely to find decent support around the $2,772 (last Monday's high)-$2,771.50 (5-day moving average) area and remain limited. This is followed by the $2,754 area (an upward trendline extending from the January 6 low of $2,615), a break below which could prompt some long-term liquidation and drag gold prices further towards the $2,730 (last week's low) area. A decisive break below this could set the stage for some meaningful downside in the short term. On the upside, gold prices must effectively break through $2,800 (market psychological level), and $2,817 (all-time high) to continue bullish. Once broken, the next resistance levels will be the key psychological levels of $2,850 and $2,900.

Consider going long on gold before 2,796.00 today, stop loss: 2,790.00; target: 2,820.00; 2,825.00

AUD/USD

Before the weekend, the Australian dollar continued to rise slightly after briefly hitting a two-week low, trading around 0.6215. The currency pair came under pressure as US President Donald Trump reiterated his plan to impose tariffs on Chinese imports, which suppressed risk sentiment. Market sentiment has clearly deteriorated, dragging down the Australian dollar. In terms of data, Australia's NAB business climate index rose to 6 in December last year, while the previous value was revised up to 3; the manufacturing and service PMIs in January were reported at 49.8 and 50.4 respectively, with the former rising by 2.0, but the latter falling slightly by 0.4. In the short term, the market will focus on US trade policies, especially tariffs on China, as well as overall market sentiment. The risk of AUD/USD is still biased to the downside. Meanwhile, speculation about a possible rate cut by the Reserve Bank of Australia (RBA) in February and China's ongoing economic woes continue to weigh on the AUD.

After briefly breaking through the 0.6300 level last week, which has not been seen this year (this rebound seems to be more due to the weakness of the US dollar than the inherent strength of the Australian economy), the Australian dollar retreated significantly last week. From a technical perspective, the AUD/USD technical indicators show mixed signals. On the one hand, the 14-day relative strength index (RSI) has fallen below 45, indicating some bearish momentum, while on the other hand, the average directional index (ADX) is close to 20, indicating a weakening of the downtrend. Currently, the key support level is 0.6131, which is the lowest point in 2025. Before this level, the focus can be on 0.6164 (Jan. 17 low), and a break below 0.6131 may open the door to the psychological level of 0.6000. As for the upside, the first resistance is at 0.6275 (40-day moving average), and a break below that will see 0.6300 (market psychological level). The next obstacle is at 0.6330 high, which is the year-to-date high.

Consider shorting the AUD before 0.6225 today, stop loss: 0.6235; target: 0.6165; 0.6155.

GBP/USD

The British pound continued to fall for the fourth consecutive day as US President Donald Trump's tariff rhetoric sent ripples through the financial markets. Therefore, as economic data took a back seat, the US dollar remained bid. The British pound was at 1.2400 against the US dollar. Before the weekend, Trump's re-imposition of tariffs on China, Mexico and Canada provided a lifeline to the US dollar. Most G10 FX currencies depreciated, including the British pound. Concerns about a slowdown in the UK economy weighed on the British pound due to concerns about the budget presented by Chancellor of the Exchequer Rachel Reeves. Meanwhile, the US inflation rate (USD) rose in December. The core personal consumption expenditures (PCE) price index, the Fed's preferred inflation indicator, rose 0.2% month-on-month as expected, up from 0.1% in November. The Fed also provided some support to the dollar as Governor Michelle Bowman said that inflation risks are tilted to the upside.

Since last Monday, the GBP/USD price has continued to hold the key psychological support level of 1.2400 at the close. The short-term outlook for GBP/USD remains neutral as it holds the 30-day moving average, which is trading around 1.2401. The 14-day relative strength index (RSI), a technical indicator on the daily chart, fluctuates slightly below the mid-50 level, indicating a short-term sideways trend. Looking down, the 30-day moving average of 1.2401, and 1.2400 (market psychological level) will become key support areas for the currency pair. Once the above area is broken, it will test the 1.2361 (38.2% Fibonacci retracement level of 1.2099 to 1.2523), and 1.2348 (14-day moving average) area. The next level will point to 1.2311 (50.0% Fibonacci retracement level), and 1.2300 (round mark) level. Looking up, the first resistance position is located at 1.2466 (40-day moving average), and then 1.2500 (market psychological level) becomes a direct obstacle area before 1.2573 (50.0% Fibonacci rebound level of 1.3048 to 1.2099).

Today, it is recommended to short the pound before 1.2410, stop loss: 1.2425, target: 1.2350, 1.2340

USD/JPY

USD/JPY has been on a roller coaster since the beginning of last week. The yen attracted some buyers and continued to rise against the dollar after Bank of Japan Governor Kazuo Ueda said on Friday that potential inflation is still slightly below 2%. In addition to this, a small rebound in US Treasury yields and a generally positive risk tone weakened the safe-haven yen. However, the break below 154.0 did not last long, and the broader rebound in the US dollar accelerated as widespread tariffs came back into focus, and USD/JPY returned to the vicinity of 155. This once again demonstrated the correlation between US protectionism and a more hawkish Fed, which has a big impact on the interest rate sensitive yen. Nevertheless, there are some positive gains for the yen from yesterday's price action. The possibility of further deterioration in US sentiment due to the combined impact of AI stock re-rating, higher and longer Fed rates, and risks related to US protectionism should provide more performance opportunities for the yen, especially in the crosses. On the other hand, there is an upside risk to the yen rate as the market underestimates the Bank of Japan's rate hike cycle by about 25-30 basis points.

On the back of the recent break below the short-term ascending trend channel, some follow-through selling below the monthly swing low around 153.70 hit early last week will be seen as a key trigger for bearish traders. Moreover, the 14-day relative strength index (RSI) on the daily chart has been gaining negative traction and remains far from the oversold zone (latest at 43.20). Therefore, a subsequent break below 153.70 (Jan. 27 low), and 153.76 (50.0% Fibonacci retracement of 148.65 to 158.88) could pull USD/JPY lower towards the psychological 153.00 level, which in turn could reach the 152.56 (61.8% Fibonacci retracement) area and the 152.00 round number level would provide decent support for the pair. On the other hand, any attempt to recover above 154.97 (50-day moving average), and 154.97 (38.2% Fibonacci retracement) now seems to face a hard barrier near 155.99 (40-day moving average), and 156.00 psychological level. However, continued strength may trigger intraday short covering, reaching the 156.47 (23.6% Fibonacci retracement)-156.43 (21-day moving average) area.

Today's recommendation is to go long USD before 154.95, stop loss: 154.75; target: 155.60, 155.80

EUR/USD

The EUR/USD pair lost momentum in the last few days of January, falling about 170 pips from last week’s high of 1.0533 to an all-week low of 1.0360. It is currently stabilizing around the 1.0370 level. It was a fairly intense week, with both the US Federal Reserve and the European Central Bank announcing their monetary policy decisions. The Fed’s decision to keep its benchmark interest rate at 4.25%-4.50% at its January meeting was widely expected by financial markets. US policymakers made it clear that they are in no rush to adjust monetary policy due to new trade policy uncertainties, alluding to President Donald Trump’s tariffs. The US dollar’s ​​immediate reaction to the news was a fall, but it soon returned to pre-announcement levels. Ultimately, the Fed did not change its views or provide new clues on the next steps. The ECB met on Thursday, and as expected, officials cut each of the three key interest rates by 25 basis points. President Christine Lagarde clarified in a press conference after the meeting that weak growth in Europe is a greater concern than inflation. The euro met short-term demand at the event, causing the EUR/USD pair to retreat.

From the technical indicators on the daily chart, the 14-day relative strength index (RSI) indicator remains below 50 (latest at 47.40). Last week, EUR/USD closed down for the fifth consecutive day, and in the second half of the week, it continued to close below the 50-day simple moving average (latest 1.0420), reflecting a bearish shift in the short-term outlook of the currency pair. If EUR/USD closes this week below the 21-day simple moving average of 1.0360, and 1.0355 (50.0% Fibonacci retracement level of 1.0177 to 1.0533), and starts to use this area level as resistance, it may fall further to 1.0313 (61.8% Fibonacci retracement level) and 1.0300 (round mark). If selling pressure reappears, the above-mentioned regional levels may serve as a safety net. Traders will keep a close eye on these levels, and a breakout points to the previous low of 1.0177. On the upside, resistance may initially be at 1.0420, the 50-day simple moving average, followed by 1.0449 (23.6% Fibonacci rebound level). A decisive break above this level will open the door to the next target of 1.0500 (round mark).

Today, it is recommended to short the euro before 1.0385, stop loss: 1.0400, target: 1.0330, 1.0320.

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