USD

On Thursday, the U.S. dollar steadied after Federal Reserve official Williams indicated a cooling inflation trend and potential rate cuts. Investors observed a decline in jobless claims data and anticipated further comments from Fed officials. The dollar index broke a three-day losing streak, climbing back above the critical 107.00 level amid rising U.S. Treasury yields. As optimism surrounding the U.S. election fades, some key market indicators suggest that the dollar rally spurred by Trump's election may have peaked. Midweek momentum indicators imply limited room for further short-term gains in the dollar. Investor capital flows have shifted away from one-sided bets, and the market outlook for the dollar has become more cautious. The strong dollar trend following the U.S. election is evidently entering a more volatile phase. Since late September, the dollar, a major global reserve currency, has strengthened consistently, partly due to Trump’s proposed tariff hikes and concerns that his policies could fuel inflation, hindering further Fed rate cuts. Bloomberg's Dollar Spot Index has risen nearly 6% this year.

From a technical perspective, the daily chart shows the dollar index's slow stochastic indicator, a momentum measure, has entered the "overbought" zone. According to JPMorgan's Emerging Market FX Risk Appetite Index, a sell signal for the dollar was triggered at last week’s close. Historically, the dollar index has softened every December since 2017, with an average decline of 1.5%. In the medium term, the dollar's trajectory will depend largely on policies from the new U.S. administration. In the short term, a technical correction cannot be ruled out, indicating a modest increase in bearish sentiment for the dollar. The 14-day Relative Strength Index (RSI) shows signs of retracement.

Key support levels are at 106.00 (psychological threshold) and 105.44 (23.6% Fibonacci retracement level of the 100.16–107.07 range). Resistance levels are at 107.00 (round number), 107.07 (last week's high), and the next significant level at 107.34 (2023 high from October 3).

Trading suggestion for today: Consider shorting the dollar index near 107.10 with a stop-loss at 107.20 and targets at 106.70 and 106.60.

WTI Spot Crude Oil

Russia launched intercontinental ballistic missiles for the first time in the ongoing war, responding to Ukraine's missile strikes, leading to a surge in crude oil prices. On Thursday, WTI crude oil prices climbed above the $70.00 mark, trading actively as the ongoing conflict between major oil producers Russia and Ukraine offset a slight increase in U.S. crude inventories from the previous week. The Energy Information Administration’s (EIA) weekly report indicated a rise in U.S. crude inventories, exerting downward pressure on oil prices. Additionally, China, the world’s largest crude importer, showed weak demand, contributing to the bearish sentiment for WTI crude.

On the other hand, the escalating war between Russia and Ukraine heightened concerns about potential disruptions to oil supplies, which could bolster WTI prices. On Tuesday, Russia's Ministry of Defense reported that Ukraine had struck a facility in the Bryansk region with six ATACMS missiles. In response, Russian President Putin lowered the threshold for potential nuclear strikes. Such supply risks are likely to support oil prices and partly offset concerns about the global demand outlook for crude.

Amid geopolitical tensions between Russia and Ukraine, crude oil prices appear to be on an upward trajectory. However, the market remains cautious, as the physical oil market is still grappling with oversupply. Consequently, the broader long-term outlook remains unchanged.

At present, the 55-day simple moving average at 70.06 and the psychological threshold at 70.00 are critical resistance levels for WTI prices. A breakout above these levels could target 71.34 (50.0% Fibonacci retracement of the 64.75–77.93 range), followed by 72.55 (November 7 high). On the downside, support levels are at 67.77 (November 14 low) and 67.12 (lows from May and June 2023).

Trading suggestion for today: Consider shorting the dollar index near 107.10 with a stop-loss at 107.20 and targets at 106.70 and 106.60.

XAUUSD

On Thursday, gold prices further broke above $2,660, marking a fourth consecutive day of gains driven by heightened geopolitical risks stemming from the escalating Russia-Ukraine conflict. The market is also awaiting comments from Federal Reserve policymakers. Despite a slight easing in geopolitical tensions later this week, demand for safe-haven assets has continued to push gold prices higher. Rising anxiety over the Russia-Ukraine conflict, coupled with broader global market uncertainties, has temporarily supported a robust weekly rebound in precious metals.

However, recent U.S. economic data, along with market expectations that Republican policies may exacerbate inflation, have increased the likelihood of interest rates remaining elevated for an extended period. This may keep gold under scrutiny in the coming weeks. While gold is traditionally seen as a hedge against inflation, rate hikes diminish the appeal of this zero-yield asset for investors.

So far this week, gold has surged past the $2,600 threshold. In its recovery, the $2,700 mark stands as a clear resistance level. A weakening U.S. dollar has also supported gold prices, with the greenback struggling to maintain gains from the so-called "Trump trade." Meanwhile, U.S. Treasury yields across different maturities have lost momentum, providing additional breathing room for gold prices, which could further encourage bulls.

The daily chart indicates that gold has climbed above the bullish 89-day moving average at $2,575 to a high above $2,660 this week, nearing the 50-day moving average around $2,661. Technical indicators, such as the 14-day Relative Strength Index (RSI), have rebounded sharply from the 33 level to near 50, suggesting further upside potential toward the 20-day moving average region of $2,677. This could extend to the congested zone between $2,686 (November 11 high) and $2,687 (25-day moving average). Follow-through buying may push gold back to the $2,700 psychological mark.

On the downside, a swift break below the interim 65-day moving average of $2,626.60 would signal a move toward the $2,600 psychological level. A decisive break below $2,600 could trigger a bearish outlook, paving the way for a deeper decline.

Today's trading suggestion: Consider going long on gold near $2,666.00 with a stop-loss at $2,662 and targets at $2,685.00 and $2,690.00.

AUDUSD

The AUD/USD pair has managed to rebound past the 0.6500 threshold despite the notable strength of the U.S. dollar and ongoing geopolitical tensions, ahead of Australia’s preliminary PMI release. Late this week, the dollar has regained strong upward momentum amid easing geopolitical worries and mixed movements in U.S. Treasury yields. Under these bearish conditions, the Australian dollar underperformed, retracing some recent gains after climbing for three consecutive days to the 0.6550 region. This pullback was driven by the dollar’s knee-jerk rally and the hawkish tone reflected in the Reserve Bank of Australia’s recent meeting minutes.

The AUD’s correction has also been influenced by rising copper and iron ore prices. These key exports injected some much-needed optimism into the market, though traders remain cautious about China’s recent stimulus measures. Looking ahead, potential Federal Reserve rate cuts could support the AUD/USD pair. However, the prospect of Trump’s presidency and associated inflation risks may keep the dollar strong, limiting significant upside for the pair. Furthermore, China’s ongoing economic challenges continue to weigh on sentiment for the AUD.

The AUD/USD pair reversed mid-week, erasing most of its early-week gains, as daily chart technical indicators such as the 14-day Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) remain firmly in negative territory. The RSI is hovering just above 40, well below the neutral 50 level. Meanwhile, the MACD line is below the signal line, and the histogram is printing red bars, suggesting further downside potential before support is found.

In the medium term, if the bulls regain control, the next resistance levels are at 0.6546 (14-day moving average) and 0.6545 (Wednesday’s high), followed by the psychological barrier at 0.6600. On the downside, the first support level lies at 0.6448 (weekly low), followed by 0.6400 (round number).

Trading suggestion for today: Consider going long on AUD/USD near 0.6500, with a stop-loss at 0.6490 and targets at 0.6545 and 0.6560.

GBPUSD

Further declines have now pushed GBP/USD to revisit the 1.2575 region for the first time since early May, against the backdrop of a strong dollar. Midweek, GBP/USD struggled to find clear direction, reversing after testing the 1.2700 threshold. Despite UK Consumer Price Index (CPI) inflation data exceeding expectations, the pound remained volatile as the Bank of England appears unlikely to cut rates in 2024, given the persistent challenge of rising inflation in the UK. With inflation continuing to raise concerns about escalating prices, the probability of a rate cut by the Bank of England next year remains low, despite the economy's unbalanced trajectory. UK traders now await Friday's Purchasing Managers' Index (PMI) activity data from both the UK and the US.

Following the release of the UK inflation report, GBP/USD dropped after reaching a high of 1.2714, touching a daily low of 1.2575. The pair has since struggled to sustain gains this week, failing to extend its rebound after encountering resistance near the 1.2575 region. The technical outlook indicates that GBP/USD is searching for a bottom and remains broadly bullish, but buying interest near 1.2700 has stalled. After breaking below the 200-day simple moving average (1.2820), GBP/USD turned bearish, forming a series of lower highs and lows. The pair cleared intermediate support at the August 8 daily low of 1.2665. Should sellers successfully push the pair below 1.2600 (psychological threshold) and 1.2597 (last week's low), further declines toward 1.2510 (May 14 low) could follow.

Conversely, a move above 1.2700 could pave the way for a challenge of 1.2800 (psychological level) and the 200-day moving average at 1.2820. Clearing this level would target the November 6 low at 1.2833.

Today's trading suggestion: Consider going long on GBP/USD near 1.2578, with a stop-loss at 1.2565 and targets at 1.2650 and 1.2660.

USDJPY

Despite the dollar's strength, USD/JPY fell to around 154.00. Donald Trump's proposed policies are expected to boost U.S. inflation and economic growth. The Bank of Japan has not committed to a rate hike in December. During Thursday's Asian session, the yen rose against the dollar, pulling USD/JPY lower from the weekly highs touched the previous day. However, with uncertainty surrounding the pace and timing of further rate hikes by the Bank of Japan, the yen struggled to strengthen significantly. Additionally, generally positive risk sentiment is likely to prevent the safe-haven yen from gaining further traction.

Meanwhile, market concerns that President-elect Trump’s policies might reignite inflation and expectations of a slower pace of Federal Reserve rate cuts continue to support rising U.S. Treasury yields. This has helped the dollar stabilize near its year-to-date highs and should limit the downside for the USD/JPY pair. Traders may also prefer to wait for Friday's release of Japan's nationwide core Consumer Price Index (CPI).

From a technical perspective, the 4-hour chart shows USD/JPY remains strong, encountering resistance at 155.89 (this week’s high). Additionally, the daily chart indicates that the 14-day Relative Strength Index (RSI) remains in bullish territory (currently around 57), suggesting limited downside. Support is seen near 153.85 (lower boundary of the ascending channel) and 153.75 (20-day moving average). These levels are key pivot points, and a break below them could lead to a test of this week’s swing low at 153.28 and the psychological level at 153.00.

On the upside, the weekly high near 155.89 now appears to act as immediate resistance. A break above this level could prompt USD/JPY to retest the 156.00 mark. Follow-through buying might push the pair towards last Friday’s multi-month high near 156.75.

Today’s trading suggestion: Consider shorting USD/JPY near 154.70, with a stop-loss at 154.90 and targets at 153.80 and 153.60.

EURUSD

The continued strength of the U.S. dollar has suppressed the price action of risk-related assets, pushing EUR/USD back to around 1.0460 for the first time since early October 2023, ahead of the release of key real economy data. This week, EUR/USD has struggled to maintain its recent momentum, facing increased downward pressure after another failed attempt to break above the 1.0600 level. Following a slight pullback on Tuesday, EUR/USD saw further declines midweek, dropping below the 1.0500 area.

The easing of geopolitical concerns and the resurgence of the so-called "Trump trade" have increased demand for the dollar, leading to declines in the euro. Federal Reserve Chair Jerome Powell's recent remarks emphasized that the central bank is in no hurry to implement further rate cuts, dampening hopes for a December rate reduction and boosting the dollar late in the session. Looking ahead, potential policy changes, such as the Trump administration's possible tariffs on European or Chinese goods, could reignite U.S. inflationary pressures. If the Federal Reserve maintains a cautious or hawkish stance, the dollar could gain further support, keeping EUR/USD under pressure.

The daily chart shows that technical indicators, such as the 14-day Relative Strength Index (RSI), have fallen to a negative reading of around 29.50, signaling weak short-term upside potential. Should EUR/USD decline further, it could break below the psychological level of 1.0500 and the 2024 low of 1.0495 (November 14), followed by the 2023 low of 1.0448 (October 3). The next support level would be at 1.0400 (round number).

On the upside, initial resistance lies at 1.0610 (this week's high) and 1.0600 (psychological level), followed by 1.0658 (14-day moving average). A breakout above these levels could target 1.0728 (November 11 high).

Today's trading suggestion: Consider going long on EUR/USD near 1.0460, with a stop-loss at 1.0450 and targets at 1.0530 and 1.0550.

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.