US Dollar Index

The US dollar index continued its decline, hitting 97.00, the lowest level since February 2022. Global risk assets continued to be strong, with the MSCI global stock index rising nearly 8% this year, the euro rose to a three-year high of 1.173 against the US dollar, and the Swiss franc hit a ten-year high. Market sentiment is driven by three factors: rumors of an early change of leadership at the Federal Reserve reinforced expectations of easing, the situation in Russia and Ukraine and the ceasefire in the Middle East eased the demand for safe-haven, and the trade game under the countdown of Trump's tariff remarks. While the dollar is under pressure, Federal Reserve Chairman Powell showed a clear dovish attitude in his recent congressional testimony, suggesting that the Fed will continue its rate cut cycle in the absence of inflationary pressure from tariffs. Traders are now waiting for the latest PCE price index report, the Fed's preferred inflation measure, for further policy signals. At the same time, the White House reduced market tensions and reduced concerns about a long-term trade conflict by downplaying the importance of the upcoming tariff deadline.

According to the daily chart, bearish sentiment on the US dollar index remains dominant, as the index has been below all key moving averages for two consecutive weeks (50-day: 99.31/100-day: 101.79/200-day moving average: 103.89), showing a standard bearish arrangement, and the medium- and long-term trend has confirmed a weakening. In addition, the 14-day relative strength index (RSI) of the technical indicator also supports downward momentum, currently below the midline near 32.79, but no divergence has occurred; the MACD histogram has expanded to -0.1983, and the DIFF and DEA have opened downward after the death cross, indicating that the downward momentum has increased. Support sellers in the short term. The initial support level of the US dollar index appears at 97.00 {integer mark, and last Thursday's low}. The additional support level for further decline is 96.55, the low of February 25, 2022. A breakout points to the 96.00 {market psychological mark} level. On the positive side, the first upside resistance for the US Dollar Index is located in the 98.00 {round mark}, and 98.21 {9-day simple moving average} area. If it breaks through this level, follow-up buying may pave the way, that is, the 25-day simple moving average of 98.67. If it breaks through the above level decisively, it may see a rebound to the psychological level of 100.00.

Today, consider shorting the US Dollar Index around 97.40, stop loss: 97.55, target: 96.90, 96.80

WTI spot crude oil

The WTI crude oil market experienced violent fluctuations last week. Against the backdrop of the ceasefire agreement between Iran and Israel, the market's concerns about supply disruptions in the Middle East have obviously cooled down. Although oil prices rebounded slightly in the second half of the week, the two major benchmarks have fallen by about 12% this week, which is a rare sharp correction in recent times. The main trigger for the early decline in oil prices last week was that US President Trump announced that Iran and Israel had reached a comprehensive ceasefire agreement, easing the expectation of supply disruptions caused by the escalation of the conflict. The market reacted quickly, with oil prices hitting a new low in more than a week last Tuesday. However, data released by the U.S. Energy Information Administration (EIA) showed that U.S. crude oil and refined oil inventories fell last week, refining activities picked up, and demand grew significantly, bringing new support to the market. The market began to realize that crude oil inventories tightened suddenly, which provided strong support for prices. The weaker dollar reduces the cost of buyers holding currency and makes crude oil more attractive, which has played a role in pushing up prices in the current market sentiment.

The daily chart shows that WTI crude oil has stabilized from a technical perspective. Last week, oil prices rebounded quickly after breaking through the key support level of $64.00 to a two-week low of $63.72, and are currently trying to regain the 25-day simple moving average of $65.79 and $66.00 {integer mark} area. This shows that buying below is active and the market may enter a technical repair stage in the short term. The 14-day relative strength index (RSI) of the technical indicator rebounded to slightly below the 50.00 midline, indicating that selling pressure has eased. If WTI can effectively break through the short-term resistance around $65.79-66.00, it is expected to further rise to the 200-day simple moving average of $68.29; if it breaks through, it will point to $70.00 {market psychological barrier}. On the contrary, if it falls below $64.20 again {a trend line extending upward from the low of 55.14 on May 5}, it will open up the downward space to $63.72 {last week's low} and $63.00 {round mark}. And further test the level of 62.20 {June 6 low}.

Today, you can consider going long on WTI crude oil around 64.34, stop loss: 64.15, target: 66.00, 66.30

Spot gold

Gold fell to around $3,255.80 per ounce last week, hitting its lowest level in four weeks, as concerns about weakening geopolitical risks and protracted trade conflicts weakened safe-haven demand. The United States and China finalized the details of the London trade agreement, which will implement the Geneva consensus. Under the agreement, China will approve export applications for controlled goods, while the United States will remove various trade restrictions. Earlier, the White House downplayed the urgency of the upcoming tariff deadline, hinting that it could be extended and further easing trade concerns. Meanwhile, investors continue to assess the Fed's rate cut prospects, with reports suggesting that President Trump may announce his Fed Chairman nominee as early as September or October, possibly leaning towards a candidate who supports looser financial conditions. This should limit any immediate positive reaction of the US dollar to key inflation data. This in turn suggests that the path of least resistance for gold is to the upside, and any further declines may still be seen as buying opportunities. On the other hand, gold prices are heading for a second consecutive weekly decline.

From a technical perspective, gold prices fell below the 60-day simple moving average of $3,297 on the daily chart, and $3,300 {market psychological level}, which may be seen as a new trigger for gold shorts against the backdrop of this week's breakout of the short-term ascending channel. Considering that the technical indicators on the daily chart have just started to fall into the negative zone of 41.70, the gold price may accelerate its decline towards the $3,248.20 {75-day simple moving average}, and $3,245.50 {May 29 low} areas, and finally fall to the horizontal support of the $3,200 round number and the $3,164.30 {100-day simple moving average} area. On the other hand, the $3,319 {55-day simple moving average}-$3,320 area now seems to be an immediate resistance. A sustained strong break above the latter may allow gold to recapture the $3,352.00 {21-day simple moving average} barrier. Some follow-up buying will negate the negative outlook and will favor the bulls to the $3,370 {June 24 high} level.

Consider going long on gold near 3,270 today, stop loss: 3,265, target: 3,290, 3,295

AUD/USD

The Australian dollar appreciated to a weekly high of $0.6564 on Friday, extending a four-session rally and reaching its highest level since November 2024, supported by broad dollar weakness. The dollar index continued to fall to a more than three-year low of 97.00, as speculation of a possible leadership change at the Federal Reserve strengthened bets on an early rate cut. The risk-sensitive Australian dollar also benefited from a combination of support from easing trade and geopolitical tensions. In the latest trade developments, White House officials last week downplayed the urgency of the expiring tariff deadline and confirmed a framework agreement with China to speed up rare earth exports, boosting demand prospects for Australia's key export commodities. Investors are now keeping a close eye on the upcoming US-Iran nuclear talks, while the fragile Israel-Iran ceasefire appears to be holding up. On the domestic front, focus turns to next week’s May retail sales data, which could heighten concerns about Australia’s growth outlook and support the case for a July rate cut.

AUD/USD is currently testing the upper line of a rising wedge pattern on the daily chart at 0.6570, with the price having breached the immediate support of 0.6549, the 61.8% Fibonacci (0.59.14 to 0.6942) retracement of the decline from September last year to the end of April this year. Last week’s high of 0.6564 marks the next resistance level, closely aligned with the wedge trendline resistance at 0.65670. A decisive break above this area could pave the way for a retest of the key psychological level of 0.6600. Following this, bulls could target last November’s swing high of 0.6688, followed by the 76.4% Fibonacci retracement of 0.6699. Despite the clear bullish sentiment, price action remains within the wedge structure, with initial support at 0.6500 {market psychological barrier}, Secondly, it is reinforced by the 50-day and 200-day simple moving averages at 0.6454 and 0.6417 respectively.

Today, consider going long on the Australian dollar around 0.6520, stop loss: 0.6506, target: 0.6560, 0.6570

GBP/USD

GBP/USD rose to around $1.3770 last week, the highest since October 2021, driven by the weak US dollar. The dollar slipped, and the Trump-Powell conflict revived concerns about the credibility and reliability of US institutions, and concerns about the independence of the Federal Reserve and the possibility that President Trump may soon appoint a successor to Chairman Powell, raising the possibility of an earlier rate cut. This is usually something people don't like. At the same time, traders also raised bets on a dovish Fed, assuming that the decisions made by Trump's opponents will be biased towards the president's economic policies. In the UK, Bank of England officials reiterated the path of rate cuts. Governor Bailey mentioned signs of slack in the labor market, including slowing wage growth and rising unemployment, while Deputy Governor Ramsden He said these factors led him to vote recently for a rate cut, warning that inflation could fall below target. Meanwhile, the ongoing ceasefire between Israel and Iran has reduced concerns about a wider conflict, calming inflation fears and boosting investor sentiment.

Last week, GBP/USD rose to around $1.3770 last week, its highest since October 2021. The pair is on track to close in positive territory for the fifth consecutive month as the dollar generally weakens. GBP/USD strengthened after breaking through horizontal resistance near the June 13 high of 1.3632 in the middle of the week. The rising 20-day simple moving average is around 1.3556, indicating a bullish short-term trend. The 14-day relative strength index (RSI), a technical indicator on the daily chart, jumped to close to 65.00, indicating upward momentum. If GBP/USD continues to stabilize above the 1.3700 round mark, The first upward target is 1.3770 {last week's high}, and 1.3800 {market psychological barrier}, and a break will look to 1.3875 {August 13, 2021 high}. Looking down, 1.3648 {5-day barrel moving average} will serve as a key support range. The next psychological barrier of 1.3600 will serve as a key support level.

Today, you can consider going long on the pound around 1.3700, stop loss: 1.3690, target: 1.3750, 1.3770

USD/JPY

The yen is trading with a negative bias against the recovering greenback, although it remains above the Asian session low hit by Tokyo's consumer price index (CPI) released before the end of last week. In addition, Japanese retail sales grew for the 38th consecutive month, but the pace of growth was the slowest since February, reaffirming bets that the Bank of Japan may delay a rate hike until the first quarter of 2026. This, combined with generally positive risk sentiment, is seen as a factor weakening the safe-haven yen. However, investors seem confident that the Bank of Japan will continue on its path of monetary policy normalization as Japan's inflation rate continues to exceed its 2% annual target. This marks a notable divergence from the approach of other major central banks pushing for looser policies and may limit losses for the low-yielding yen. U.S. President Trump is likely to announce his new monetary policy in September or early October. The selection of the next Fed chair could steer monetary policy in a more dovish direction.

From a technical perspective, USD/JPY retreated sharply to just above 144.00 before the weekend after rising to a near six-week high of 148.03 last week. Considering that the 14-day relative strength index (RSI) indicator, a technical indicator on the daily chart, is slightly around 49.35. It has just begun to gain negative momentum, reflecting the hesitation of sellers. If the price falls back below the 144.00 round mark, it may put the spot price at risk of further decline to last week's low in the 143.75 area. The downward trajectory may eventually drag the spot price to test levels below the 143.00 psychological barrier. A breakout will point to 142.38 {June 3 low}. On the other hand, a sustained strong break above the 9-day simple moving average of 145.25 and then at 145.84 {89-day simple moving average}, and the 146.00 psychological barrier area, which may negate the bearish outlook. USD/JPY may once again pave the way for further short-term gains in the 146.70-146.75 area and the 147.00 round number.

Today, consider shorting the US dollar around 144.85, stop loss: 145.10, target: 144.70, 144.50

EUR/USD

The euro continued to appreciate, breaking above $1.1700 to reach a fresh 2021 high of 1.1745, supported by general weakness in the U.S. dollar. The ceasefire between Iran and Israel remains in place, boosting risk sentiment, while reports that President Trump is considering an early appointment of the next Fed chair have raised concerns about the dollar's independence, weighing on the greenback. Meanwhile, NATO's decision to increase defense spending from 2% to 5% of GDP by 2035 has raised expectations that countries, especially Germany, will step up borrowing to meet these targets. On the fiscal front, Germany has approved its 2025 budget and 2026 fiscal framework, which include record investment plans aimed at spurring growth. The plans involve increased spending and faster implementation than initially expected. Meanwhile, markets continue to forecast a 25 basis point rate cut by the European Central Bank before the end of the year. On the other hand, European Central Bank Vice President Luis de Guindos said last Thursday that the role of the euro could be expanded if the European Union moves forward with reforms.

EUR/USD maintained its bullish trend last Friday, supported by a weaker U.S. dollar. However, the pair has reached the target of the bullish flag pattern of the previous two weeks, just above 1.1700. After breaking through the key resistance of 1.1700 to a four-year high of 1.1745. The 14-day relative strength index (RSI) of the daily chart is also in the overbought area (71.00), but due to the strength of the trend, the current extreme reading is 80. Therefore, the daily closing must be above the 1.1745 level, and the first resistance level will be 1.1795 {upper line of the upward channel on the daily chart}, and 1.1800 {market psychological barrier} area. Once broken, the next demand area will be 1.1886 {September 2021 high} level. On the downside, the pair finds support at the 5-day moving average of 1.1650, and the 1.1655 {upper channel axis} area. The next level will point to the round number barrier level of 1.1600.

Today, you can consider going long on Euro around 1.1708, stop loss: 1.1695, target: 1.1760, 1.1770

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