USD

On Tuesday, the US Dollar Index is capitalizing on its recent gains around the 103.00 level as market sentiment improves. Additionally, cautious sentiment due to the lack of news on the Iran-Israel conflict is also supporting the dollar's current stance. However, the dollar's movement throughout the day might be limited by strong dovish bets on the Federal Reserve. The Dollar Index initially faced selling pressure at the opening on Monday but rebounded after the release of July ISM Services data. The index initially dropped to a low of 102.12, the lowest since January this year, but later recovered to around 102.70. Despite the positive data, market concerns about the weakening US economic outlook persist, with investors worried about a potential recession in the US. The weak US payroll report last Friday, which signaled a likely upcoming rate cut by the Federal Reserve, further pressured the dollar downward. The US non-farm payrolls missed expectations, and the recurring theme of growth concerns has led to increased volatility, arbitrage unwinding, and continued stock sell-offs.

The daily chart shows technical indicators turning mildly bearish, with the 14-day Relative Strength Index (RSI) and Stochastic Index both declining. The risk remains skewed to the downside. Initial resistance is at 103.00 (psychological level) and 103.05 (a trend line extending from the January 12 low of 102.08). The next target is 103.56 (50.0% Fibonacci retracement from 100.61 to 106.51). On the downside, support is at 102.35 (March 8 low) and 102.16 (Monday's low). Breaking these levels would point to 102.00 (76.4% Fibonacci retracement and psychological level).

Consider shorting the Dollar Index around 103.05 today, with a stop loss at 103.15 and targets at 102.70 and 102.60.

AUD/USD

AUD/USD quickly rebounded from Monday's annual low, successfully reclaiming the 0.6500 level and above as investors assess the RBA's hawkish stance in Tuesday's session. During the Asian session on Tuesday, AUD/USD extended its recovery after hitting a new 2024 low in the 0.6350-0.6345 range earlier this week, resuming its uptrend above 0.6500. Meanwhile, AUD/USD remains below the critical 200-day moving average (0.6592), indicating a potential further decline in the short term. The pair's decline was driven by rising speculation of a US economic slowdown and heightened expectations of a Fed emergency rate cut, along with renewed risk aversion. Recent Australian inflation data have reduced the likelihood of further RBA rate hikes, aligning with prior market expectations. Overall, while the Fed is expected to ease policy in the medium term, the RBA is likely to maintain a restrictive stance for longer, potentially supporting AUD/USD in the coming months. However, China's economic slowdown could hinder a sustained AUD recovery.

The daily chart shows AUD trading around 0.6520 on Tuesday. AUD/USD has re-entered a downward channel, suggesting weakening bearish bias. The 14-day RSI slightly above the oversold 30 level indicates potential for further upward correction. The pair might find immediate support around 0.6470, followed by the lower bound of the downward channel around 0.6420. On the upside, initial resistance is at 0.6568 (14-day moving average), with the next significant resistance at 0.6580 (50.0% Fibonacci retracement from 0.6362 to 0.6798).

Consider going long on AUD around 0.6500 today, with a stop loss at 0.6485 and targets at 0.6550 and 0.6560.

EUR/USD

New buying pressure on the dollar has weighed on risk-related assets, prompting EUR/USD to relinquish part of its recent two-day strong rebound, shifting focus back to the 1.0900 region. On Monday, EUR/USD surged to slightly above 1.1000 before returning to the familiar range around 1.0950, failing to set a new high for 2024. Market expectations for a Fed rate cut are robust, with investors hoping for an initial cut in September. During the Asian session on Tuesday, EUR/USD held steady around 1.0950. While European retail sales will be the last hurdle for the market before fully adjusting to the September rate cut outlook, the economic calendar for the trading week remains generally light. Euro area retail sales are expected to slow to just 0.1% year-over-year for June, down from the 0.3% increase in May. The rate markets currently show an 85% probability of the Fed cutting rates by 50 basis points at the September 18 meeting.

From a daily chart perspective, EUR/USD has again broken above the upper boundary of the overall downward channel, but due to the lack of firm bullish momentum, buying pressure is likely to encounter resistance at the 200-day moving average of 1.0825. Despite the pair's weak and overstretched uptrend, EUR/USD has formed a higher-low ascending pattern, staying near the midline for most of 2024. Bulls are seeking to push EUR/USD into a new bullish cycle. On the upside, attention can be focused on the psychological level of 1.1000, as well as 1.1012 (76.4% Fibonacci retracement). Conversely, EUR/USD is expected to experience a technical pullback starting from the 200-day moving average of 1.0825, with sellers aiming to push buyers back to the previous low below 1.0700.

Today's recommendation is to go long on USD around 1.0915, with a stop loss at 1.0900 and targets at 1.0975 and 1.0980.

GBP/USD

GBP/USD rebounded after hitting a new low around 1.2670 early July, trading slightly below 1.2700. Improved risk sentiment made it difficult for the dollar to strengthen further, helping the pair erase some of its daily losses. GBP/USD started the week with a fresh drop, falling just above 1.2700 before recovering. During the Asian session on Tuesday, GBP/USD traded around 1.2770. After more disappointing US data, market expectations for an accelerated Fed rate cut this year strengthened, with FedWatch Tool showing an 85% probability of a 50 basis points cut in the September 18 meeting. With fewer economic data releases for the rest of the week, markets have some breathing room to reassess positions.

The daily chart shows GBP/USD consolidating near the 50-day moving average at 1.2786, with intraday resistance at 1.2800 (psychological level) and 1.2828 (50.0% Fibonacci retracement from 1.2612 to 1.3045). Breaking these levels would challenge 1.2880 (38.2% Fibonacci retracement) and 1.2888 (last week's high). If buying momentum increases, GBP buyers could reclaim levels around 1.2900 (psychological barrier). The 14-day RSI remains below 45, currently around 44.70, indicating short-term weakness. Further support is at 1.2683 (100-day moving average) and 1.2612 (June 24 low).

Consider going long on GBP around 1.2675 today, with a stop loss at 1.2660 and targets at 1.2730 and 1.2740.

USD/JPY

Due to the robust safe-haven appeal of the yen, USD/JPY faced selling pressure after recovering to around 146.40. Concerns over global economic slowdown and the Bank of Japan's higher-than-expected rate hike pushed the yen higher. The Federal Reserve is expected to lower key interest rates by 50 basis points in September. On Tuesday, with a slowdown in the unwinding of carry trades, the yen retreated from a six-month high. However, the yen strengthened against the dollar amid heightened market expectations that the Bank of Japan may further tighten its monetary policy. The Bank of Japan has raised its short-term interest rate target by 15 basis points, setting the range at 0.15%-0.25%. Additionally, the bank announced a plan to reduce its monthly purchase of Japanese Government Bonds (JGBs) to 3 trillion yen starting from the first quarter of 2026. The increasing expectations of a 50 basis point rate cut by the Federal Reserve in September may limit the upside potential for USD/JPY. The CME FedWatch Tool shows a 74.5% probability of a rate cut at the September meeting, up sharply from 11.4% a week earlier.

Daily chart analysis shows USD/JPY trading around 144.50 on Tuesday. The pair interrupted its downtrend that began on July 30. The 14-day Relative Strength Index (RSI) is below 20, indicating that USD/JPY is in oversold territory and may see a short-term rebound. USD/JPY might test strong support around 143.42 (early January low) and 144.51 (100-week moving average). The next level of support is seen at 141.68 (Monday's low), ultimately aiming for 140.25 (key level from December) and 140.00 (psychological level). On the upside, USD/JPY may encounter resistance around 146.56 (Monday's high). A break above this level could weaken the bearish bias and allow the pair to test the 50-day moving average at 147.53.

Today's recommendation is to short USD around 144.50, with a stop loss at 144.80 and targets at 143.50 and 143.20.

XAU/USD

After trading in a narrow range around $2,410, gold prices reversed direction, trading below $2,400. US Treasury yields rebounded after a sharp drop on Monday, but this did not provide traction for gold in the latter part of the day. Early in the week, risk-averse sentiment heavily impacted financial markets, causing volatility across all sectors. Before Wall Street opened, gold prices plummeted to a low of $2,364 before rebounding above $2,400, still significantly down for the day. Concerns about the US economic performance and escalating Middle East tensions put the market in panic mode, causing a sharp rise in gold prices. On one hand, recent US economic growth and employment data have raised fears of a potential recession in the world's largest economy, prompting speculators to consider aggressive rate cuts in the coming days. On the other hand, mutual airstrikes between Israel and Hamas over the weekend, which resulted in multiple casualties, have raised concerns about a potential full-scale war, boosting gold prices.

Technically, the overnight rebound reaffirmed strong support near the 50-day moving average at $2,367. This should now become a key point for short-term traders. A decisive break below this point would pave the way for an extended pullback from recent highs. Further selling below last week's lows ($2,353-$2,352) would confirm the negative bias and drag gold prices to the $2,342.20 area or the 100-day moving average. Convincingly breaking the latter could change the recent bias in favor of bearish traders and trigger aggressive technical selling. On the other hand, the $2,415 level (20-day moving average) might provide some immediate resistance before the $2,448-$2,450 area. The next major obstacle is around $2,468-$2,469, above which gold prices might challenge the July high of $2,483-$2,484. A break above this could target the psychological $2,500 level, setting the stage for further appreciation.

Consider going long on gold around $2,387.00 today, with a stop loss at $2,384.00 and targets at $2,405.00 and $2,410.00.

XTI/USD

On Tuesday, WTI fell into negative territory for the fourth consecutive day. Significant demand for the dollar and concerns over demand have pressured commodities. The worsening Middle East crisis may help limit losses for crude oil. Oil prices are recovering from a 3% drop earlier on Monday, with the U.S. market also rebounding from intraday lows. A series of disappointing U.S. data last week raised concerns about a potential recession. Crude oil prices peaked in early July after an upward trend in June, then declined for the remainder of the month. Reflecting the global economic downturn, the International Energy Agency noted that oil consumption growth in Q2 2024 was relatively modest, with Chinese consumption down year-on-year during this period. Supply growth outpaced consumption, driven by increased U.S. production despite ongoing supply restrictions by OPEC+. Recent volatility in crude oil prices largely reflects concerns on the supply side, such as fears that escalating Middle East conflicts might negatively impact output in the region.

Oil prices have been trending downward since last week, and Monday seemed to continue this sentiment. On the positive side, there could be a substantial recovery, although it may be short-lived. With the 14-day Relative Strength Index (RSI) indicating oversold conditions, the first rebound target is $75.90 (the median line of the daily downtrend channel). Once above this level, the next key level is the 200-day Simple Moving Average (SMA) at $78.31, followed by the 300-day SMA at $79.10. On the downside, this week's trend is expected to enter its final stage, as the RSI is nearing the end of the line. It might be worth attempting the June low of $72.48, down to the $71.32 level (the February 5 low). A break below this level could further challenge the significant psychological level around $70.00. Many buyers will wait for prices to drop below this level to obtain some discounted prices.

Today's recommendation is to go long on crude oil around $73.20, with a stop loss at $73.00 and targets at $74.80 and $75.00.

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