US Dollar Index

The US Dollar Index held steady near 101.60 on Thursday, pausing its recent decline as investors prepare for next week’s Federal Reserve policy meeting, where interest rates are widely expected to remain unchanged. Comments made last Friday by Federal Reserve official Kevin Warsh did little to alter these expectations; however, persistent inflation—driven by energy costs—has kept alive market speculation that the Fed might raise rates in December. Both the European Central Bank and the Bank of Japan are also expected to keep interest rates steady next week. Meanwhile, recent economic data have pointed to weakness in the US economy: housing starts fell in September, and pending home sales dropped to a record low. Oil prices rose following a drone attack on Saudi Aramco’s Shaybah oil field, which resulted in two fatalities. Furthermore, the US government ordered the evacuation of some personnel and their families from its embassy in Saudi Arabia, further intensifying market concerns regarding inflationary pressures.

The broader environment of a weakening US dollar has tipped the risk balance further toward the downside for the currency. Nevertheless, any decline is expected to be gradual and orderly rather than a sharp devaluation. There are no fundamental factors severe enough to trigger a collapse of the US dollar; the overall landscape—encompassing Federal Reserve policy, oil prices, and interest rates—continues to provide some support. In the short term, the outlook leans slightly bullish, as the US Dollar Index remains above the 100-period simple moving average (SMA) at 100.54 on the 4-hour chart. However, the 23.6% Fibonacci retracement level at 101.92, along with the 102.00 psychological level, may cap this rebound; a decisive move back above these points would be required to resume an upward trend. A sustained breakout above these levels would open the door for further gains, targeting the 102.69 level (the upper Bollinger Band). On the downside, initial support is found near the 38.2% Fibonacci retracement level at 101.28, with the 101.00 psychological level serving as a secondary layer of support. A decisive break below this moving average would weaken the nascent bullish bias and expose the pair to the risk of a deeper pullback.

For today, consider shorting the US Dollar Index (DXY) at 101.70, with a stop-loss at 101.80 and targets at 101.30 and 101.20.

AUD/USD

During early Asian trading on Thursday, the AUD/USD pair lost momentum, retreating toward the 0.7015 level. Risk aversion and safe-haven capital flows have provided some support to the US dollar against the Australian dollar. According to a report by Fars News Agency, Iranian officials have threatened to target US political figures should the United States launch further attacks—a significant escalation in warnings from Tehran. Meanwhile, the Saudi-led coalition stated early Wednesday that it had intercepted and destroyed five drones heading toward Saudi Arabia. Ongoing tensions in the Middle East may bolster safe-haven currencies like the US dollar, putting pressure on the AUD/USD pair. On the Australian dollar front, traders have increased their bets on interest rate hikes by the Reserve Bank of Australia (RBA) following remarks from Andrew Hauser. Hauser, a member of the RBA’s monetary policy committee, warned on Wednesday that the inflation outlook for the coming months is "significantly worse."

On the daily chart, AUD/USD is hovering below its 200-day simple moving average (SMA) at 0.7049, which keeps the upside cautiously limited for now, while the middle line of the Bollinger Band at 0.6975 provides nearby support. The 14-day Relative Strength Index (RSI) sits near 51, suggesting a slightly positive—though not definitive—momentum; this aligns with a neutral short-term bias, as the price continues to fluctuate around the 0.70 mark. On the upside, immediate resistance lies at the 200-day simple moving average (SMA) of 0.7049, followed closely by the 50.0% Fibonacci retracement level at 0.7064. This narrow supply zone is a key hurdle that bulls must clear to extend the rally. On the downside, initial support is found near the 0.6975 level—the middle line of the Bollinger Band—while the lower band near 0.6916 serves as a stronger support level should selling pressure re-emerge.

For today, consider going long on the AUD at 0.7008; stop-loss: 0.7000; targets: 0.7040, 0.7050.

GBP/USD

The British pound (GBP) showed strength against the US dollar (USD) on Thursday, trading steadily near its monthly high of 1.3400 during the European session. The GBP/USD pair strengthened as hotter-than-expected UK Consumer Price Index (CPI) data for September fueled market expectations for a hawkish stance from the Bank of England (BoE). The upside surprise in UK inflation keeps the focus on the BoE’s tightening bias; the latest data highlights persistent upward pressure, with both headline and services inflation for September coming in above market consensus. Analysts noted that the BoE’s core indicators for underlying price pressures remain stubborn, emphasizing that "momentum in core services prices has been quite sticky over the past few months." Looking ahead, investors will turn their attention to the UK retail sales data for September and the preliminary S&P Global PMI figures for the UK and the US, all due on Friday.

On the daily chart, GBP/USD is trading at 1.3400. With the price holding above the 34-day simple moving average (SMA) at 1.3334 and positioned between the 38.2% and 50.0% Fibonacci retracement levels of the recent downtrend—the latter located just above at 1.3409—the currency pair has regained a short-term bullish tone. The Relative Strength Index (RSI) stands at 58.26 and is approaching positive territory, signaling a recovery in upward momentum as the pair tests this key retracement resistance.
On the upside, immediate resistance lies at 1.3432 (the 200-day SMA), followed by the 61.8% Fibonacci level near 1.3472 and the 78.6% retracement level near 1.3562. On the downside, initial support is found at the 38.2% Fibonacci retracement level of 1.3345, followed by the 23.6% level near 1.3267; a deeper pullback would expose structural support near the 1.3200 mark.

Consider going long on GBP at 1.3386 today; stop-loss: 1.3374; targets: 1.3440, 1.3450.

USD/JPY

During Thursday’s session, USD/JPY dipped to a one-week low of 156.80 and is currently trading in the 157.85 area—near the lower bound of the range maintained since the beginning of the month—amid broad US dollar weakness. The US Dollar Index, which tracks the greenback against a basket of currencies, is hovering near the three-week low reached on Tuesday, as US Treasury yields continue their recent decline from multi-year highs. Meanwhile, the Japanese yen has found support from hawkish remarks made earlier this week by Bank of Japan Governor Kazuo Ueda, who hinted at the possibility of another interest rate hike as early as December. This, in turn, is exerting downward pressure on the USD/JPY pair. On Wednesday, Bank of Japan (BoJ) Deputy Governor Ryozo Himino noted that underlying inflation is approaching the central bank’s 2% target and cautioned against delaying policy adjustments—a stance that echoes the hawkish remarks made by Governor Kazuo Ueda earlier this week. Nevertheless, the Japanese Yen (JPY) remains under pressure from carry trades, as Japan’s relatively low interest rates diminish the currency's appeal. Furthermore, the market perceives the BoJ’s gradual pace of monetary tightening as insufficient to significantly narrow the interest rate differential between Japan and other major economies.

The USD/JPY pair dipped to a one-week low of 156.80 before recovering to trade in the 157.85 area—near the lower bound of the range maintained since the beginning of the month—amid a broader weakening of the US Dollar. On the daily chart, the pair retains a short-term bullish bias, as the spot price remains below both the 9-day (158.14) and 50-day (158.56) Simple Moving Averages (SMAs), while the broader uptrend remains intact. The 14-day Relative Strength Index (RSI) sits near 43.27, indicating solid momentum without reaching overbought territory, which leaves room for buyers to extend the rally. Meanwhile, the FXS Fed Sentiment Index stands at 127.51, suggesting a supportive policy backdrop. On the downside, initial support is found at 156.38 (from September 30), followed by the 156.00 psychological level; together, these form a demand zone that bolsters the bullish structure. As long as USD/JPY holds above these moving averages, the technical bias favors further upside. Conversely, a daily close below the 5-day SMA (158.98) and the 158.00 psychological level would signal weakening momentum, potentially exposing the pair to a deeper correction toward the 158.77 level (the upper boundary of the Bollinger Band), followed by the 159.00 mark. Consider shorting the USD at 156.90 today; stop-loss: 157.10; targets: 156.20, 156.10.

EUR/USD

The Euro remains under pressure near $1.1220, weighed down by rising borrowing costs in France and intensifying tensions between the U.S. and Europe regarding Russia’s war in Ukraine. The yield on France’s 10-year government bond has breached 5%—reaching its highest level since 2002—reflecting growing market concerns over French public finances and social unrest. Meanwhile, relations between Washington and its European allies have deteriorated as U.S. President Donald Trump deepens his engagement with Russian President Vladimir Putin. Recent moves, including the easing of sanctions against Moscow and questioning the political leadership in Ukraine, have fueled uncertainty regarding Western unity and the future level of support for Kyiv. Elsewhere, rising oil prices amid the ongoing conflict involving Iran have exacerbated inflationary fears and heightened expectations for tighter monetary policy, further weighing on the Eurozone’s economic growth outlook. Additionally, upcoming key elections in major European economies are adding further political uncertainty, placing additional pressure on the single currency.

On the daily chart, EUR/USD maintains a short-term bearish bias, as the spot price continues to trade below the 30-day simple moving average (SMA) of 1.1323. This reinforces a consolidation pattern with a downward tilt. The Relative Strength Index (RSI-14) sits at approximately 41.74—remaining below the neutral 50 level—which suggests weak bullish momentum. On the upside, initial resistance is found at the 30-day SMA (1.1323), followed by the upper Bollinger Band near 1.1372, and the more significant 100-day SMA at 1.1454, a level that has capped broader recovery attempts. On the downside, the 1.1200 level serves as the next key support to watch. A sustained break below this floor could open the door for a further decline toward the 1.1150 low.

Consider going long on the EUR at 1.1208; stop-loss: 1.1200; targets: 1.1260, 1.1250.

WTI Crude Oil

On Thursday, crude oil prices climbed toward $99 per barrel, recovering losses sustained earlier in the week. This followed a drone attack on Saudi Aramco’s Shaybah oil field, which resulted in two fatalities. The incident highlights escalating tensions in the Middle East and has deepened market concerns regarding potential further disruptions to energy supplies. The U.S. has also ordered the departure of some embassy personnel and their family members from Saudi Arabia. Meanwhile, Ukraine launched a large-scale drone offensive against Russia this week, targeting critical oil infrastructure—a move signaling Kyiv’s intent to prevent Moscow from expanding diesel exports, which had been part of an understanding reached between former President Trump and President Putin. However, rising crude oil shipments from the Middle East—with export volumes nearing pre-war levels—may cap further gains in oil prices. Saudi Arabia’s crude oil exports rose by 7.9% in August, reaching their highest level since March. Additionally, Russia is expected to deliver its first shipment of diesel to the United States on Thursday.
On the daily chart, WTI crude oil has rebounded from a three-day losing streak, climbing back above the 20-day simple moving average (SMA) at 92.95. The short-term moving averages are beginning to flatten and converge, suggesting that the recent pullback has not yet evolved into a full trend reversal. The RSI, currently near 64.54, has moved back above the neutral 50 level without entering overbought territory, indicating a moderate release of upward momentum—a classic pattern of "stabilization following a decline, while awaiting a clear direction." On the upside, key resistance levels to watch are $100 (a psychological threshold) and $101.05 (this week’s high). The next major resistance lies at $102.47, corresponding to the 78.6% Fibonacci retracement level. The $100 mark serves as both a psychological barrier and a zone of previous heavy trading volume; a decisive daily close above this level would confirm the opening of further upside potential in the medium term. On the downside, initial support is found at $96.70—a previous consolidation level—followed by $95.80 and $95.00. The $96.70 level acts as a critical defensive line; a breakdown here could lead to a retest of $95.00 or even lower.

For today, one might consider going long on crude oil at $98.53, with a stop-loss at $98.40 and targets at $99.50 and $100.00.

Spot Gold

Gold has struggled to sustain its modest rebound from monthly lows, maintaining a bearish intraday bias below $4,100 during the first half of Thursday’s European session. The selling pressure on the U.S. dollar persists, as Federal Reserve officials have recently signaled no urgency to raise interest rates at the upcoming October 27–28 meeting. Furthermore, U.S. Treasury yields continue to retreat from multi-year highs, keeping dollar bulls on the defensive and providing some support to the precious metal. Additionally, the fact that gold has found acceptance below the $4,100 round-number mark further reinforces the likelihood of a continued downward trend. Traders are currently looking to Thursday’s U.S. weekly jobless claims data for potential momentum ahead of Friday’s preliminary global Purchasing Managers' Index (PMI) figures, though the primary market focus remains on next week’s FOMC meeting.

On the 4-hour chart, gold maintains a bearish short-term bias, trading below the 20-period simple moving average (SMA) at $4,127. Furthermore, the Moving Average Convergence Divergence (MACD) indicator remains in negative territory, with its line positioned below the signal line, while the Relative Strength Index (RSI) hovers at 32.32. Collectively, these momentum indicators suggest that downward pressure persists, even as conditions approach the oversold zone. Should the decline continue, the psychological support level at $4,000 may provide a floor. Additional selling pressure would likely serve as a new catalyst for bearish traders, potentially accelerating the decline toward the next psychological support level at $3,959 (the July low). Conversely, a breakout above the resistance area at $4,127 (the 20-period Simple Moving Average) could see the price make another attempt to challenge the $4,200 mark. A sustained, strong move above this level could push the price toward the 200-period Simple Moving Average at $4,232; clearing this hurdle would alleviate current bearish pressure and pave the way for a more significant corrective rebound.

For today, consider going long on gold at $4,023, with a stop-loss at $4,020 and targets at $4,060 and $4,070.