US Dollar Index

The US dollar fell against most major currencies on Thursday. Traders were quick to overlook the recently released Producer Price Index (PPI). The US Dollar Index fell to 107 before. The US Dollar Index, which tracks the performance of the US dollar against six major currencies, rose as high as 108.50 on Wednesday after the release of the Consumer Price Index (CPI) for January, but then reversed. The data was strong. In his first testimony before lawmakers on Capitol Hill, Federal Reserve Chairman Jerome Powell did not provide a specific timeline on whether the central bank would cut interest rates again. Traders are considering their next move, with US yields rising slowly but steadily this week. Inflation exceeded expectations, causing investors to reassess the Fed's policy path. The US Dollar Index retreated below 107.90 in the US session as US Treasury yields rose, even though Federal Reserve Chairman Jerome Powell remained noncommittal about future rate cuts.

In terms of recent technical trends, the US dollar index tried to break through the highs, but faced resistance at 108.00 (market psychological level)-108.50 (Wednesday's high), and it was difficult to recapture 109.00 (round number level), and 109.05 (23.6% Fibonacci retracement level from 105.41 to 110.18). The 14-day relative strength index (RSI) of the technical indicator on the daily chart is still below 50, indicating weak momentum. The moving average convergence-divergence (MACD) histogram continues to show a bearish trend. Immediate support is at the key psychological level of 107.00, and 106.97 (January 24 low), then 106.27 (100-day moving average). On the other hand, once the index re-crosses above the psychological level of 108, it may re-point to the 108.50 level, which was the high of Wednesday this week. A sustained breakthrough may open the door to 109.00 (round mark), and 109.05 (23.6% Fibonacci retracement of 105.41 to 110.18).

Today, consider shorting the US dollar index around 107.20, stop loss: 107.30, target: 106.75, 106.70

WTI spot crude oil

On Thursday, WTI crude oil was trading at around $71.20. WTI prices fell as US President Donald Trump called Russian President Vladimir Putin and Ukrainian President Vladimir Zelensky to discuss ending the war in Ukraine. Oil prices closed down more than 2% on Wednesday after US President Trump took the first diplomatic step towards his promised end to the war in Ukraine. U.S. President Donald Trump discussed the war in Ukraine during a phone call with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky. Trump is negotiating, which has reduced the current risk premium in oil prices. The U.S. Energy Information Administration said on Wednesday that U.S. crude oil inventories rose more than expected last week. At the same time, crude oil inventories unexpectedly increased. In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) said that global oil demand will increase by 1.45 million barrels per day in 2025 and 1.43 million barrels per day in 2026. Both forecasts are unchanged from last month.

With rising crude oil inventories, a cautious Fed and increased U.S. production, oil prices face increasing downside risks. WTI crude oil is currently testing key support levels, and a break below $70.00 (market psychological level) could accelerate selling pressure to $69.76 (76.4% Fibonacci retracement of $66.80 to $79.37). Unless new bullish factors emerge, market sentiment tends to be bearish to $68.37 (December 20 low last year). On the upside, the next major resistance is at $71.60 (61.8% Fibonacci retracement). If it breaks above $72.00 (round mark) and $72.04 (14-day moving average), the market may reverse the recent decline and re-enter the uptrend to $73.08 (50.0% Fibonacci retracement) and $73.09 (20-day moving average) levels.

Today, consider going long on crude oil around 71.10, stop loss: 70.90; target: 72.30; 72.40

Spot gold

Gold prices now continue to break through the key mark of $2,900 per ounce to $2,930. In the Asian market on Thursday, spot gold fluctuated in a narrow range, trading around $2,906/ounce. Gold prices bottomed out and rebounded on Wednesday, falling to around $2,863.99/oz during the session, as strong US CPI data and Fed Chairman Powell's re-emergence of the view of not cutting interest rates for the time being prompted some longs to take profits, but gold prices were quickly supported by bargain hunting and safe-haven demand, and gold prices closed above $2,900/oz. US President Trump's new tariff policy has raised concerns about a global trade war. However, US President Donald Trump's new tariffs on commodity imports and promised reciprocal tariffs, as well as geopolitical risks, should continue to provide support for safe-haven gold prices. This in turn requires caution before confirming that gold/dollar has peaked in the short term and any meaningful pullback from the historical high of about $2,942-2,943 hit on Tuesday due to trade war concerns.

From a technical perspective, the 14-day relative strength index (RSI), a technical indicator on the daily chart, has become a key factor in prompting some profit-taking in gold prices. Nevertheless, any further declines may still be seen as buying opportunities and are limited around $2,873 (9-day moving average). This is followed by support around $2855-2852, which, if broken, could drag the gold/dollar pair further towards the $2800 mark. On the other hand, bulls may now wait for gold to re-cross the immediate barrier of $2929 (Thursday's high) before making new bets. The subsequent rise could push gold prices back to the $2942.80 area, the all-time high hit on Tuesday. Some follow-up buying will lay the foundation for the continuation of the recent established uptrend over the past two months or so to $3000.

Consider going long gold before 2,924.00 today, stop loss: 2,920.00; target: 2,940.00; 2.945.00

AUD/USD

On Thursday, the AUD/USD pair faced upward pressure again after the US dollar sell-off, successfully reclaiming the key 0.6300 mark and above, supported by the continued optimism of the risk complex. The Australian dollar continued to rebound against the US dollar despite an increase in Australian consumer inflation expectations to 4.6% (previous value was 4.0%). The AUD/USD pair remained under pressure due to US President Donald Trump's 25% tariff increase and Federal Reserve Chairman Jerome Powell's statement that the Fed is in no hurry to cut interest rates further. Adding to the pressure, Trump's trade advisor Peter Navarro criticized Australia on Tuesday, accusing it of "destroying the aluminum market", just a day after Trump signed an executive order to impose import tariffs on certain metals. Australia is actively seeking an exemption from these new tariffs, and Trump previously said that he would "seriously consider" the request due to the trade imbalance between the two countries.

On Thursday, the AUD/USD pair hovered around 0.6300, remaining above the 14-day moving average (0.6259) on the daily chart. This indicates strong short-term price momentum. In addition, the technical indicator 14-day relative strength index (RSI) remained above 50, reinforcing the bullish bias. The AUD/USD pair may test the eight-week high of 0.6330 reached on January 24. Then 0.6393 (89-day moving average), on the other hand, the AUD/USD pair may test the main support at the 0.6259 level of the 14-day moving average and then 0.6235 (Wednesday's low). A decisive break below these levels could weaken short-term price momentum, potentially pushing the pair towards the psychological level of 0.6200.

Consider going long AUD before 0.6305 today, Stop Loss: 0.6290; Target: 0.6340; 0.6350.

GBP/USD

GBP/USD is moving further up, breaking above the key 1.2500 level to hit a new multi-day high in response to the increasing selling pressure on the US dollar. GBP/USD traded at the latest weekly high around 1.2500 during the European session on Thursday, supported by the release of upbeat macroeconomic data from the UK and the broad selling pressure surrounding the US dollar. Increasing optimism over the Russia-Ukraine truce and the lack of new headlines surrounding US President Trump's trade policy have returned risk flows to the market. In a social media post, Trump said he had a "long and productive" phone conversation with Russian President Vladimir Putin to start negotiations to end the war in Ukraine, while avoiding announcing reciprocal tariffs. However, Trump could still unveil his reciprocal tariff plan before meeting with Indian Prime Minister Narendra Modi on Thursday. If this plan comes true, the market may take a cautious stance, making it difficult for GBP/USD to extend its intraday gains.

Midweek, GBP/USD continues to consolidate above 1.2440 (9-day moving average). GBP continues to fluctuate around 1.2550 (February 5 high), and 1.2557 (75-day moving average), keeping the exchange rate range-bound as technical traders wait for meaningful signs of momentum in either direction. The 14-day relative strength index (RSI), a technical indicator on the daily chart, suggests that momentum is bullish (latest around 60), opening the door for further gains in the pair. On the upside, the 1.2600 (market psychological barrier) and then the 1.2686 (100-day moving average) area can be watched. On the contrary, if the daily closing price falls below the 1.2500 support, the next level is 1.2435 (Thursday's low), followed by 1.2400.

Today, it is recommended to go long on GBP before 1.2550, stop loss: 1.2535, target: 1.2585, 1.2595

USD/JPY

USD/JPY fell to below 153.00, and the yen strengthened sharply. Investors remain vigilant as Trump reiterated his threat of reciprocal tariffs. The Federal Reserve said that a restrictive policy stance is favorable if the progress of the deflationary trend stalls. Japan's producer price index (PPI) released on Thursday was stronger than expected, attracting some buyers, which further confirmed the market's bets that the Bank of Japan will raise interest rates further. However, the market reaction was short-lived amid concerns about the impact of U.S. President Donald Trump’s tariffs on steel and aluminum imports and the upcoming reciprocal tariffs. This helped the USD/JPY pair stay above the 154.00 mark during the Asian session and close to the more than one-week high hit the previous day.

From a technical perspective, the overnight breakout above the confluence resistance of 152.75 and the subsequent breakout above the 38.2% Fibonacci retracement level of the January-February decline favored bullish traders. Nonetheless, oscillators on the daily chart have not yet confirmed the positive outlook, although they have recovered from negative territory. Therefore, it would be wise to wait for follow-through buying above the 154.75-154.80 area or the 50% retracement level before positioning for further gains. The USD/JPY pair could then break above the 155.00 psychological mark and head towards the next relevant resistance at the 155.45-155.50 area and around 156.00 or the 61.8% Fibonacci retracement level. On the other hand, the 153.50 mark, followed by the 152,50-152.00 area, now seem to protect the near-term downside. Follow-through selling could drag the USD/JPY pair towards the 151.00 round-number mark, via the 152.75 confluence.

Today's recommendation is to short the US dollar before 153.00, stop loss: 153.20; target: 152.10, 152.00

EUR/USD

On Thursday, EUR/USD rose for the third consecutive day, trading close to the 1.0450 level, a three-week high, driven by a strong selling bias in the US dollar. During the week, EUR/USD fluctuated sharply, testing the lower end for most of the session, and then breaking the higher end after investors tried to reverse the unexpected rise in US Consumer Price Index (CPI) inflation. The key data on Thursday will be the US Producer Price Index (PPI) inflation, as European economic data took a back seat this week. In January, the US CPI rose significantly, with the headline CPI inflation rate rising to 3.0% year-on-year, slightly higher than the expected 2.9%. The most important part of this increase came from the near end of the tail, where the CPI rose by 0.5% month-on-month. It is worth noting that the market had expected the headline CPI to be 0.3% month-on-month, especially considering the previous number was 0.4%. Wednesday's inflation rise made investors a little uneasy, raising market concerns that inflation is becoming more entrenched in the US domestic economy.

Looking forward, EUR/USD faces a difficult balance. The currency pair may fluctuate in the short term, but the overall direction of EUR/USD may remain unclear until global uncertainties are clarified. Economic data and trade headlines can quickly change market sentiment, making traders and investors need to be vigilant. EUR/USD continues to fluctuate in an erratic pattern, hovering below the 89-day moving average near 1.0522, but it is difficult for short sellers to develop momentum, with the first support at 1.0400 (round mark), and Thursday's low of 1.0373. While the short-term technical floor is close to the 1.0300 level. As for the upside, we can focus on the 1.0522 (89-day moving average) level, and further point to the 1.0550 mark.

Today, it is recommended to go long on the euro before 1.0450, stop loss: 1.0440, target: 1.0500, 1.0510.

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