US Dollar Index

The dollar fell against all major currencies. The JOLTS December job openings indicated a further cooling of job openings. The dollar index fell below 108.00. Market participants assessed the US tariffs imposed on Canada, Mexico and China over the weekend, while investors should continue to focus on US labor market data this week and comments from Federal Reserve rate setters. The dollar index rose to the 110.00 mark before US President Trump announced a one-month delay in new tariffs on goods imported from Canada and Mexico. This eased investors' short-term concerns and the dollar index retreated to around 108.00. On the data front, US consumer spending surged 4.2%, showing that the economy remains resilient. Chicago Fed President Goolsbee expects the Fed's policy rate to be significantly lower, but Governor Bowman said further rate cuts need to be gradual and cautious. In the short term, the dollar is expected to continue to be supported.

The dollar index fell below 108.00, failing to show resilience despite the recent rebound. Momentum indicators such as the relative strength index (RSI) and moving average convergence divergence (MACD) have not recovered, indicating that the bearish momentum may continue. If the selling pressure persists, the downside is that the US dollar index may try to retest around 107.80 (January 31 low) in the short term, and a break below this level may shift the market sentiment to a more corrective phase to 107.00 (round mark). The key resistance level is located at 108.50, and additional upward resistance is located at 109.00.

Today, consider shorting the US dollar index around 108.05, stop loss: 108.15, target: 107.70, 107.60

WTI spot crude oil

WTI crude oil US crude oil prices continued the previous day's retracement from a one-week high and attracted sellers for the second consecutive day on Tuesday. The commodity is currently trading near a low of $70.40, close to the one-month low hit last week, before rebounding above $72.00 and slightly above the 100-day simple moving average support. U.S. President Trump announced a one-month delay in new tariffs on goods imported from Canada and Mexico. This eased concerns about potential supply disruptions from the two major oil suppliers to the United States and put pressure on crude oil prices. In addition, the prospect of falling fuel demand due to the expected domino effect of Trump's policies on global economic growth has become another factor exerting downward pressure on the black liquid. At the same time, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) rejected Trump's call to increase production to reduce prices and maintained the current oil production plan. This could serve as a tailwind for crude oil prices and help limit deeper losses.

From a technical perspective, WTI crude oil prices rose to $74.52, a high at the beginning of the week, and then continued to fall to a low of $70.40. The market risk appetite fell, forming a resonance decline, and the 14-day relative strength index of the technical indicator is still fluctuating in the negative zone (the latest report is around 44). It has now fallen below the $73.00 round-number support. Observe whether it is effective. If it continues to break, the oil price is likely to return to the bearish range. The initial support is $71.11 (100-day moving average), and if it breaks, it will test $70.00 (market psychological barrier). As for the current resistance area, you can first consider $73.10 (9-day moving average), and then $74.52 (the high point at the beginning of the week).

Consider going long on crude oil near 72.20 today, stop loss: 72.00; target: 73.80; 74.00

Spot gold

Gold's upward momentum continued unabated on Tuesday, with gold hitting a record high near $2,845 an ounce. U.S. President Trump announced tariffs, exacerbating market concerns that inflation will affect economic growth. Gold prices hit a record high on Tuesday, with U.S. President Trump announcing tariffs, exacerbating market concerns that inflation will affect economic growth. It hit a record high of $2,845 in early trading. Although a stronger dollar usually has a dampening effect on the gold market, gold prices have been rising as uncertainty about Trump's tariffs has driven safe-haven demand. Canada and Mexico announced retaliatory measures against the U.S. tariff policy, however, Trump announced that tariffs on Mexico will be suspended for one month. Meanwhile, bearish contagion in the stock market may drag gold in the short term, but damaging tariffs continue to fuel gold's medium-term bull market.

The daily chart shows that the 14-day relative strength index (RSI) of the technical indicator has entered the overbought zone and is currently trading around 74. Therefore, further gains may be difficult to achieve and a pullback may occur before resuming the upward trend. If a pullback occurs, gold prices may challenge the market psychological level of $2,800. A break below this level will test the previous day's low of $2,772 area, which should now act as a key support level. Further declines will put the January 30 low of $2,754 at risk. The last line of defense for buyers is at the 21-day moving average of $2,731. However, the golden cross of the 50-day and 100-day simple moving averages still keeps buyers hopeful. On the upside, gold prices need to continue to break through the historical high of $2,845 to target $2,850, and the psychological level of $2,900.

Consider going long on gold today before 2,838.00, stop loss: 2,835.00; target: 2,865.00; 2,868.00

AUD/USD

AUD/USD extended Monday's notable rally, hovering around multi-day highs around 0.6265 after a notable improvement in sentiment around risk-related areas. The Australian dollar rebounded on Tuesday, snapping a six-day losing streak as AUD/USD gained on the back of a weaker U.S. dollar. The dollar pulled back after U.S. President Donald Trump announced a suspension of tariffs on Mexico and Canada late Monday. However, market volatility remains an issue as investors closely monitor progress in tariff talks with China, Australia's main trading partner. President Trump said his tariffs on Mexico and Canada have been postponed for at least 30 days after their leaders agreed to send 10,000 troops to the U.S. border to combat drug smuggling. The Australian dollar could lose its support as the Reserve Bank of Australia may consider a rate cut in February. The RBA has kept the official cash rate (OCR) at 4.35% since November 2023, stressing that inflation must "sustainably" return to the target range of 2%-3% before considering easing policy.

On Tuesday, AUD/USD hovered around 0.6250, after the daily chart showed that AUD/USD fell below the previous low of 0.6131 at the beginning of the week, and once fell below the low of 0.6100. The currency pair made a "V"-shaped rebound and returned above 0.6200. But it is still trading within the descending channel, showing a bearish tendency. However, the 14-day relative strength index (RSI) has rebounded above the 50 level, indicating a weakening of the downward momentum. Breaking through the channel and sustaining above the 50 level of the RSI may indicate a shift in the bullish tendency. On the downside, AUD/USD may test 0.6164 (January 17 low), and the lower line of the descending channel at 0.6150. A break below the channel will lead the pair to the area around 0.6131 (Jan. 13 low). Upside resistance can be seen at 0.6287 (50-day moving average), and 0.6300 (market psychological level) levels.

Today, consider going long on AUD before 0.6245, stop loss: 0.6230; target: 0.6290; 0.6300.

GBP/USD

On Tuesday, the GBP/USD pair’s bullish bias remained intact, having risen to a two-day high near 1.2493 in response to the stable quotes of the US dollar. GBP/USD rose for the second consecutive trading day, trading around 1.2400 in the Asian session on Tuesday. The pair rose as risk sentiment improved after US President Donald Trump announced a suspension of tariffs on Mexico and Canada late on Monday. However, market volatility remains an issue as investors closely monitor the progress of the ongoing tariff negotiations. President Trump said he would suspend high tariffs on Mexico and Canada after their leaders agreed to deploy 10,000 troops to the US border to combat drug smuggling. Tariffs on Mexico and Canada have been postponed for at least 30 days. GBP/USD upside may be limited as the currency may face the risk of the Bank of England restarting its policy easing cycle, with a 25bp rate cut expected to hit 4.5% on Thursday.

From the daily chart, GBP/USD is still caught in the wrong momentum despite the bullish recovery. The price action at the beginning of this week created a deep barrier for the pair, dragging bids below the two-week low of 1.2250. The price action managed to recover all the intraday losses and closed the day above 1.24. Currently, GBP is above the 40-day simple moving average of 1.2450, and 1.2455 (Tuesday's high) levels. If it holds above the above areas for a sustained period, there is a chance to test the 1.2550 (65-day moving average), and 1.2600 (market psychological level). On the downside, the first support is at 1.2436 (9-day moving average), followed by 1.2400 (round mark).

Today, it is recommended to go long on GBP before 1.2465, stop loss: 1.2450, target: 1.2520, 1.2530

USD/JPY

USD/JPY fell sharply below 154.50, and investors supported the yen amid market risk sentiment. US President Trump postponed the order to impose 25% tariffs on Canada and Mexico by 30 days. Investors are waiting for Japanese Prime Minister Shigeru Ishiba's meeting with US Trump this week. The yen fell during the Asian session on Tuesday as US President Donald Trump's decision to postpone trade tariffs on Canada and Mexico weakened demand for traditional safe-haven assets. This, coupled with concerns that Japan will also be a target of Trump's tariffs, seems to have further weakened the yen and pushed USD/JPY back to around the upper range of 155.00. However, any significant depreciation of the yen seems to be limited as the market bets on further rate hikes by the Bank of Japan. This is a sharp divergence from market expectations that the Fed will cut borrowing costs twice before the end of this year. The narrowing interest rate differential between Japan and the United States should help limit losses in the low-yielding yen.

From a technical perspective, USD/JPY may continue to face strong resistance around the 156.00 mark. This is followed by last week's swing high, around the 156.25 area, and a break above this area could allow spot prices to climb to the 156.75 supply zone. Follow-up buying that leads to a further break above the 157.00 round number mark will favor bullish traders and pave the way for a recovery towards the 158.00 mark, with some obstacles around the 157.50 area in the middle. On the other hand, weakness below the 155.00 psychological mark now seems to find support around the 154.00 round number mark area, followed by 153.70, a more than one-month low hit in January. A valid break below the above support levels could accelerate the decline of USD/JPY towards the 153.00 mark.

Today, it is recommended to short the US dollar before 154.55, stop loss: 154.75; target: 153.80, 153.70

EUR/USD

The EUR/USD pair has taken a breather, with the pair reversing its multi-day negative trend and refocusing its rebound just below the key 1.0400 mark, always against the backdrop of an ongoing correction in the US dollar. The EUR/USD pair extended its decline after giving up its intraday gains and traded around 1.0300 in the Asian session on Tuesday. The EUR/USD pair fell as the US dollar strengthened due to the 10% tariff on China. However, Trump said on Monday afternoon that negotiations with China could take place "in the next 24 hours." He also said that "if we can't make a deal with China, then the tariffs will be very, very high." The EUR/USD pair also fell as the US tariffs on the EU are still under discussion. The EUR/USD pair may also face challenges due to the continued dovish sentiment on the ECB's policy outlook. Last week, the ECB cut its deposit facility rate by 25 basis points to 2.75%, while the main refinancing operation rate fell to 2.9%, in line with expectations.

From a daily chart technical point of view, EUR/USD is sailing in uncertain waters. After a sharp drop to the weekly low of 1.0210 (February 3), the pair once rebounded in a "V" shape to above 1.0300 after finding initial support at the weekly low of 1.0210 (February 3). Momentum indicators have added caution: the 14-day relative strength index (RSI) has rebounded to around 49, suggesting that momentum is gradually increasing, while the average directional index (ADX) is close to 21, indicating that the current trend may lose momentum again. If it fails to re-reach the resistance area of ​​1.0400 (round mark), it will re-test 1.0300 (round mark), and then the lowest point of this year, 1.0272 (low on Tuesday). On the contrary, if it breaks through 1.0400 (round mark), the further obstacle is at 1.0453 (65-day moving average).

Today, it is recommended to go long on the euro before 1.0365, stop loss: 1.0350, target: 1.0410, 1.0420.

Disclaimer: The information contained herein (1) is proprietary to BCR and/or its content providers; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely; and, (4) does not constitute advice or a recommendation by BCR or its content providers in respect of the investment in financial instruments. Neither BCR or its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.