US Dollar Index

The US Dollar Index fell on Tuesday, closing at 102.20; while supported by safe-haven demand following the escalation of attacks in the Middle East over the weekend, investors are awaiting key US inflation data due later this week. The three main drivers of current US dollar strength are: the Eurozone debt crisis (undoubtedly a disaster, further exacerbated by rising oil and energy prices, which would prompt global markets to buy back previously sold euros, causing the dollar to fall); a hawkish Federal Reserve (the war makes it difficult for the Fed to adopt a dovish stance—while Warsh appeared composed at the July 29 press conference, the market remains unconvinced, as recent dollar gains are driven almost entirely by interest rate differentials between the US and its G10 peers, a gap that will narrow once the war ends and calls for rate hikes subside); and high oil prices (the surge in oil prices since the war began signals a broader issue—a sharp rise in geopolitical risk—acting as the primary driver of dollar strength now, but likely to become the biggest drag on the currency once the conflict concludes).

The dollar's strength is driven by the convergence of three factors: Fed interest rate expectations, safe-haven sentiment regarding the Middle East, and endogenous risks within the Eurozone. This rally is not solely dependent on US rate hike expectations; fiscal risks in France provide crucial support for the dollar's elevated level. If French debt issues continue to escalate, the dollar's downside remains limited even if US inflation cools; conversely, if the CPI cools significantly and European risks stabilize, the probability of a dollar pullback increases. US inflation data and Warsh's remarks will test the sustainability of the current bullish trend for the dollar. From a technical perspective, the US Dollar Index has recently approached the measured upside targets of two trading ranges, increasing the likelihood of a short-term pullback. If the CPI/PPI reports exceed expectations, it could reinforce expectations for another rate hike in December, potentially driving the US Dollar Index (DXY) above the 102.61 level (the week's early high) and toward the 103.00 mark. Conversely, if inflation data comes in soft, the dollar might experience profit-taking after its recent rally, pulling back to the 102.00 round number and the 101.85 level (14-day moving average).

Consider shorting the US Dollar Index today at 102.32; stop-loss: 102.42; targets: 102.00, 101.85.

AUD/USD

The AUD/USD pair attracted follow-through selling during Tuesday's Asian session, edging lower following the release of the Reserve Bank of Australia (RBA) meeting minutes. At the time of writing, the pair was trading at 0.6980. The pair is expected to extend the pullback from the 0.7000 level—a two-week high—seen overnight. The US dollar maintains a bullish tone, hovering near levels not seen since April 2025, as energy-driven inflation risks keep market bets for a December Federal Reserve rate hike firmly in place. Additionally, geopolitical risks are providing further support to the safe-haven dollar. Markets are now turning their attention to the September employment report (due Thursday) and the third-quarter CPI data (expected later this month) for clues regarding the Fed's next move. Meanwhile, elevated oil prices are stoking inflation concerns and reinforcing expectations for further Fed rate hikes, pushing the dollar to an 18-month high.

On the daily chart, AUD/USD is trading at 0.6980, maintaining a short-term bearish bias as the spot price remains below the 0.7000 psychological level. The price is currently hovering just above the 78.6% Fibonacci retracement level of 0.6945, indicating that attempts to stabilize near this support are quite fragile; meanwhile, the 14-day Relative Strength Index (RSI) at 36.50 is approaching oversold territory. On the upside, initial resistance appears at the 0.7000 psychological level and the 61.8% Fibonacci retracement level of 0.7008, followed by the 200-day Simple Moving Average (SMA) at 0.7039, the 50% Fibonacci retracement level at 0.7052, and the 100-day SMA at 0.7045. On the downside, immediate support lies at the 78.6% retracement level of 0.6945, followed by the 0.6900 round-number level and the 0.6865 zone—an area supported by both a Fibonacci cycle anchor and a significant historical low—with deeper support found at 0.6833.

Consider going long on the AUD at 0.6970 today; Stop-loss: 0.6960; Targets: 0.7020, 0.7030.

GBP/USD

GBP/USD rebounded after posting a slight decline the previous day, holding above 1.3250 during the European session on Tuesday. The pound strengthened—helping the pair stabilize—boosted by positive like-for-like retail sales data from the British Retail Consortium (BRC). Meanwhile, a broad-based pullback in the US dollar also aided the pair's rebound. During Tuesday's European session, GBP/USD attracted buying interest near the 1.3200 mark, halting the previous session's slide. However, the spot price remains confined within the familiar range seen over the past three weeks or so; therefore, caution is advised before establishing positions for any significant appreciation. The pound edged higher following the better-than-expected BRC like-for-like retail sales figures. Additionally, Bank of England policymaker Megan Greene expressed concern that second-round inflation effects could emerge if the central bank fails to act promptly; this sentiment has provided support for the pound. Furthermore, profit-taking on the US dollar—following its touch of an 18-month high on Monday—has served as another factor supporting the GBP/USD pair.

On the daily chart, the price is trading below the Bollinger Bands' middle line at 1.3267, with the upper band at 1.3391 and the lower band at 1.3142. Recently, the price rebounded after repeatedly testing the area near 1.3180, reaching a high around 1.3285. The MACD indicator shows a DIFF value of -0.0062 and a DEA value of -0.0065, with the histogram hovering near the zero line at 0.0007. Over the past month, GBP/USD has gradually drifted lower from above 1.33 in late September and is currently trading in the lower end of its yearly range; the 52-week high and low stand at approximately 1.3868 and 1.3010, respectively. Trading activity is currently characterized by a "wait-and-see" approach ahead of data releases, with volatility remaining neutral. To the upside, initial resistance lies at the Bollinger Bands' middle line of 1.3267. A decisive break above this level could pave the way for a test of the 1.3300 psychological mark, a zone that would likely act as a significant resistance barrier should buying pressure mount. To the downside, a key support level to watch is the October 1 low of 1.3180. Further down, the next critical level is 1.3142—near the Bollinger Bands' lower line; a clear break below this point would open the door for a deeper decline within the broader corrective phase. Consider going long on GBP at 1.3240 today; stop-loss: 1.3230; targets: 1.3280, 1.3290.

USD/JPY

USD/JPY fell below 158.30 during Tuesday's Asian session, snapping a two-day winning streak and retreating from the more-than-two-week high reached the previous day, despite weak Japanese PPI inflation data. Speculation that authorities might intervene to support the yen has made bulls cautious, weighing on the pair. Currently, USD/JPY is trading near 158.25. The yen has strengthened against the dollar despite the weak Japanese Producer Price Index (PPI) data. Traders remain highly alert to potential currency market intervention by Japanese authorities to prop up the yen. Data released by the Statistics Bureau of Japan on Tuesday showed that wholesale prices rose 6.8% year-on-year in September. While this figure represents a slowdown from the previous month, it indicates mounting inflationary pressure, keeping market expectations for a near-term rate hike alive. Traders are bracing for key US inflation reports later this week, looking for fresh market drivers. The US Consumer Price Index (CPI) report is due on Wednesday, followed by Producer Price Index (PPI) and retail sales data on Thursday. These reports could provide further guidance on the Federal Reserve's policy path.

The daily chart shows USD/JPY trading just above the 158.00 level; as long as the closing price holds above 158.00, the bias remains bullish, targeting 159.00 followed by 160.00. The daily Stochastic RSI has retreated from near 85 to around 72 as the price hit new highs, meaning the move lacks confirmation from momentum indicators. A daily close below 157.50 would invalidate the bullish outlook. The key resistance level above at 159.50 marks a previous swing high and a zone of concentrated selling pressure; furthermore, it sits near the sensitive range where potential Japanese intervention might occur, making a clean breakout difficult. A dense resistance band is formed by the 100-day moving average (approx. 159.51) and the upper Bollinger Band (approx. 159.30); the price has repeatedly faced resistance here during rebounds. Regarding support levels: Monday's low near 157.67 held above the 20-day simple moving average. The next levels to watch are 157.00 (a round-number mark) and 156.25 (the lower Bollinger Band).

Consider shorting the USD at 158.50 today; stop-loss: 158.65; targets: 157.70 and 157.80.

EUR/USD

EUR/USD maintained its gains above 1.1180 during the European session on Tuesday, benefiting from a broad pullback in the US dollar. However, the pair's upside potential may be limited by escalating fiscal and political instability in France. Market attention remains focused on key US inflation reports due later this week. During early European trading on Tuesday, EUR/USD held in positive territory near 1.1190. Nevertheless, expectations of a hawkish Federal Reserve and rising US Treasury yields could support the dollar and act as a headwind for the pair. Key US inflation data later this week will be the focal point, as the figures may offer further guidance on the Fed's policy path. The US Consumer Price Index (CPI) report is due Wednesday, followed by Producer Price Index (PPI) and retail sales data on Thursday. Signs of hotter-than-expected US inflation could reinforce the central bank's resolve to maintain a restrictive monetary policy stance to curb persistent price pressures. On the daily chart, EUR/USD maintains a bearish short-term tone, as the spot price remains below the 14-day Simple Moving Average (SMA) at 1.1267 and the Bollinger Bands midline at 1.1323. The price sits just above the lower Bollinger Band at 1.1107, while the 14-day Relative Strength Index (RSI) is at 26—in oversold territory—suggesting that while downward pressure dominates, the sell-off is beginning to look overextended. To the upside, initial resistance lies near the 14-day SMA at 1.1267, followed by the Bollinger midline at 1.1323 and the September 30 high around 1.1380; unless buying interest regains broader control, any rebound is likely to face resistance at these levels. To the downside, the lower Bollinger Band at 1.1107 offers the next key support level; a decisive break below this floor would pave the way for a decline toward the 1.1100 mark.

Consider going long on EUR at 1.1185 today; Stop Loss: 1.1175; Targets: 1.1230, 1.1240.

WTI Spot Crude Oil

US WTI crude oil rose on Tuesday, trading near $93.80 at the time of writing. Despite hopes for an energy-related ceasefire between Russia and Ukraine—which could alleviate supply concerns—escalating geopolitical tensions continue to support oil prices. Fears of supply disruptions resurfaced after Iran-backed Houthi militants attacked Saudi Arabia over the weekend, driving a rebound in prices. Oil prices remain elevated, underpinned by three key factors: significant downside risks to crude supply, low global oil inventories, and the commodity's high sensitivity to the interest rate environment. Demand for physical inventory replenishment and institutional financial hedging continues to strengthen, jointly supporting crude oil prices. Against a backdrop of low inventories, the market's tolerance for any supply disruption is significantly reduced; even minor geopolitical news can easily trigger a synchronized rise in both spot and futures markets, while capital actively allocates to crude oil assets to hedge against macroeconomic uncertainty stemming from regional conflicts.

From a technical perspective, the overall landscape favors the bulls. The $93.80 (early October high) to $95.00 (September 28 high) zone represents a previous breakout area, while the blue rising trend line connecting the July and August lows is now acting as solid technical support. The 20-day simple moving average (SMA) at $91.57—flanked by bands set at one standard deviation—has not been decisively breached to the downside. Furthermore, the most recent breakout was to the upside, implying that the uptrend remains intact technically. The price is currently testing the overhead resistance band between $93.80 and $95.00. A breakout here could signal confirmation of a broader uptrend on the daily timeframe. However, should the $90–$92 support zone and the rising trend line fail to hold, I would look to the next significant support level near $88.38; such a move would place the bullish daily outlook under serious pressure. The market might then test the support area near $88.03 (the 50-day moving average), followed by the $87 round-number mark, with stronger support located around the $85.50 level.

Consider going long on crude oil at 93.65 today; stop-loss: 93.50; targets: 95.30, 96.00.

Spot Gold

In the European market on Tuesday (October 13, Beijing time), spot gold was trading around US$4,160 per ounce. The price of gold fell back after hitting a one-week high of US$4,217.30 per ounce on Monday due to the impact of a stronger US dollar and higher oil prices, but it may be expected to test the US$4,200 per ounce mark again during the day. The price of gold mainly revolves around three main lines: the emergence of fund-buying behavior in the long-term U.S. bond market, the market's re-evaluation of the effect of AI on U.S. GDP, and the combined game of changes in the strength of the U.S. dollar index. The U.S. government and bond markets were closed Monday for Columbus Day. Gold is under selling pressure as the dollar nears a 1-1/2-year high and an escalating conflict in the Middle East keeps investors wary. Investors will focus on Federal Reserve Chairman Warsh's speech and key inflation data later this week to assess the path of future monetary policy, with the CPI report on Wednesday and PPI and retail sales data on Thursday. Wyckoff added that the reports would not show any signs of easing inflation and could be negative for precious metals markets.

Short-term gold prices are still in a volatile game stage, with high U.S. bond yields, a strong U.S. dollar, and potential liquidity risks jointly limiting the height of the rebound. The core observation anchor point for the follow-up is the US CPI data and the strength of the CPI. If inflation falls steadily, the market will price interest rates downward in advance, opening up room for gold prices to rebound. Technical aspect: Spot gold rebounded from the bottom of the box and then touched the head and shoulders top and neckline and pulled back. It is currently competing for long and short positions around the box. Gold prices are running below the downward trend line and long-term moving average, and the short-term outlook is bearish. The initial support is US$4,100 {integer mark}, and the next support is US$4,048 {strong plus lower trajectory}. If it falls below these levels, gold prices may further drop to 4,000 {market psychological mark}. On the upside, initial resistance is at $4,217 {early week high}; and the 20-day simple moving average at $4,219 form the first key pressure level, followed by the 100-day simple moving average at about $4,253. Only by regaining these two areas can the weak pattern at the daily level be significantly alleviated;

Consider going long gold at 4,155 today, stop loss: 4,150; target: 4,200; 4,210.