USD

On Monday, the U.S. dollar generally trended upward, with traders primarily focused on the upcoming release of U.S. inflation data for October later this week. The Dollar Index broke through 105.00, reaching a recent high of 105.70 and preparing to test resistance levels. The index, which measures the dollar against a basket of six major currencies, rose last week. This followed the Federal Open Market Committee’s decision to lower interest rates by 25 basis points. While the Federal Reserve expressed optimism about economic growth, it acknowledged some easing in labor market conditions. Despite the rate cut, the Dollar Index has rebounded and may continue its upward momentum if the economic data remains strong.

For investors, the U.S. election has consistently appeared as a binary event: if Trump wins, the stock market rallies, yields rise, and the dollar strengthens. Trump’s potential to achieve unified Republican control over the levers of power could extend this "Trump trade." However, there is still considerable uncertainty about how campaign rhetoric will translate into actual policy. Trump favors tax cuts, which could stimulate economic growth, but not without challenges. Another aspect of Trump’s approach includes higher trade tariffs, unclear geopolitical prospects, a stronger dollar, and rising bond yields. Inflation risks are mounting, and the Federal Reserve may act less dovishly than initially expected by the market.

After a sharp rise earlier last week, the Dollar Index pulled back slightly toward the end of the week. This move came after Federal Reserve Chair Jerome Powell indicated he would remain in his position, even as President-elect Donald Trump prepares to take office. The first level to watch on the upside is 105.53 (the April 11 high), a significant upper resistance, with 105.89 (the May 2 high) just above. If that level is broken, 106.52 (the April high and a double top) would be the last level to watch before potentially approaching 107.00. On the downside, the psychological level of 104.00 and the 200-day simple moving average at 103.86 should prevent further declines in the Dollar Index.

Later in the week, the Dollar Index showed a slight pullback, but it maintained a positive trend heading into the weekend. Technical indicators, such as the 14-day Relative Strength Index (RSI), remain deeply in the positive range, while the Moving Average Convergence Divergence (MACD) shows lower red bars. The Dollar Index has regained support from the 200-day moving average, completing a bullish crossover with the 20-day moving average. This suggests that despite a slight pullback in prices this week, further gains remain possible.

Today, consider shorting the Dollar Index around 105.60, with a stop loss at 105.72 and targets at 105.35 and 105.30.

WTI Spot Crude Oil

Oil prices continued to fall, breaking below the psychological $70.00 mark. Traders still believe that concerns over Chinese demand and the OPEC standoff are key issues driving the supply surplus. After President-elect Donald Trump's expanded victory, the Dollar Index surged. WTI crude prices have seen consecutive declines, trading below $70.00 per barrel during the Asian session on Monday. The recent dip in oil prices is due to investor disappointment with China's latest stimulus measures. Additionally, oil prices have eased as concerns over possible supply disruptions from Tropical Storm Rafael in the U.S. Gulf of Mexico have subsided. Despite this, strong demand from U.S. refineries continues to support the oil market, with crude processing capacity expected to exceed 90% due to low inventories.

Oil prices failed to break through resistance, which seems reasonable in this context. For every winner, there is a loser; the impending tariffs that the U.S. is set to impose on China pose an issue for oil. Higher tariffs could mean China's exports and economy may face further setbacks, potentially leading to lower-than-expected oil demand from China by 2025. On the upside, $72.25 (50.0% Fibonacci retracement of the 77.93 to 66.57 range) and the 100-day moving average at $73.00, along with $73.59 (61.8% Fibonacci retracement), are important technical levels and the next major obstacles. The 200-day moving average is at $76.77, and though this level might be tested amid Middle Eastern tensions, it remains a considerable distance away.

On the downside, traders should keep an eye on $68.00 (psychological level), $68.15 (October 18 low), and $68.08 (last Thursday's low). Beyond these, support lies at $67.12, which held prices in May and June 2023.

Today, consider going long on crude oil around $67.80, with a stop loss at $67.50 and targets at $68.90 and $69.20.

XAUUSD

The selling pressure on gold has now gained additional momentum, pulling it toward the critical $2,600 per ounce level on Monday, or a new low for the week, against the backdrop of a strong U.S. dollar rebound. Following the dovish rate cut decision from the Federal Reserve last week, which led to a pullback, U.S. Treasury yields rebounded in the Asian session on Monday. Meanwhile, market disappointment over China’s ¥10 trillion (approximately $1.4 trillion) debt plan and softer inflation have raised concerns over China’s economic outlook, putting further downward pressure on gold prices. Additionally, investors remain wary of the broader economic consequences that may arise from potential tariffs once U.S. President-elect Donald Trump takes office in January. This uncertainty continues to weigh on the precious metal, even as dollar buyers take a breather after relentless gains in the previous week. Ahead of the crucial U.S. Consumer Price Index (CPI) inflation data release on Wednesday, gold traders are also expected to adjust their positions.

On the daily chart, gold prices have broken below the support level at $2,674.70, which is the 61.8% Fibonacci retracement level from the October 10 low of $2,603.50 to the all-time high of $2,790, indicating a fresh downward move. Should downward momentum build further, sellers may once again target $2,647.50 (the 76.4% Fibonacci retracement level). The next levels to watch are $2,620 (the lower boundary of the daily descending channel) and the psychological level of $2,600. Additionally, the 14-day Relative Strength Index (RSI) is moving lower below the 50 level, which it broke from above last Friday. This leading indicator suggests that further declines in gold prices are likely. Conversely, gold buyers would need to reclaim resistance above $2,647.50 (the 76.4% Fibonacci retracement level) to test the $2,686 level (the week’s initial high). A new uptrend would begin above this level, with buyers aiming for the psychological resistance around $2,700.

Today, consider going long on gold around $2,615.00, with a stop loss at $2,610.00 and targets at $2,635.00 and $2,640.00.

AUDUSD

The AUD/USD pair continued to weaken, touching the 0.6560 area once again in response to the strong U.S. dollar and disappointing news from the Chinese economy, marking a challenging start to the week. In the early Asian session on Monday, AUD/USD remains under selling pressure around 0.6580. Weaker-than-expected Chinese economic data and the prospect of Trump imposing additional tariffs on China have weighed on the Australian dollar, which is often viewed as a proxy for the Chinese economy. Key data releases this week include the U.S. October Consumer Price Index (CPI) and Australia’s employment figures. The potential increase in tariffs on Chinese goods could pressure the AUD, as China is Australia’s primary trading partner.

On the other hand, the preliminary Michigan Consumer Sentiment Index for November rose to 73.0, up from October's 70.5 and better than the market expectation of 71.0. This optimistic report has broadly supported the U.S. dollar. Investors expect the Federal Reserve (FED) to adopt a less dovish stance, as Trump is likely to follow through on plans for significant tariffs, further bolstering the dollar.

On the daily chart, technical indicators show the 14-day Relative Strength Index (RSI) at 44, in negative territory and sharply declining. The Moving Average Convergence Divergence (MACD) is flat with red bars, indicating steady selling pressure. The overall outlook for AUD/USD remains bearish. AUD/USD failed to break through the converging 200-day (0.6629) and 20-day (0.6625) simple moving averages around 0.6630, signaling a continuation of the downtrend. Last week’s drop below the 0.6600 support level suggests further downside potential, with targets at the October low of 0.6536 (October 30) and then 0.6500 (psychological level).

On the upside, a short-term stabilization above 0.6600 would bring resistance at the 200-day moving average of 0.6629, followed by 0.6645 (50.0% Fibonacci retracement of the 0.6348 to 0.6942 range), and a potential breakout would target the psychological level of 0.6700.

Today, consider going long on AUD around 0.6560, with a stop loss at 0.6550 and targets at 0.6600 and 0.6610.

GBPUSD

With increasing selling pressure in risk-related sectors, GBP/USD has declined, reaching a three-month low in the 1.2860-1.2850 range as the U.S. dollar started the week strong. GBP/USD opened weakly on Monday, maintaining a range near 1.2900 despite the lack of follow-through selling and unclear fundamental cues. The dollar held steady just below last week’s four-month high, with expectations that U.S. President-elect Donald Trump's policies will stimulate inflation and limit the Federal Reserve's ability to aggressively loosen policy. Although the Bank of England’s (BoE) hawkish stance has helped to limit GBP/USD’s downside, this factor is also seen as adding bearish pressure on the pair. In fact, the BoE has warned that the expansionary Autumn Budget introduced by Chancellor Rachel Reeves is expected to drive inflation higher, prompting the BoE to take a cautious approach to rate cuts in 2025. Additionally, risk appetite has tempered gains for the safe-haven dollar, providing some support for GBP/USD, suggesting caution before making aggressive bearish bets. Investors will also seek insights from speeches by Federal Reserve Chair Jerome Powell and BoE Governor Andrew Bailey last Friday, which may further guide GBP/USD’s next directional move.

GBP/USD fell from around 1.2980 late last week as the dollar rebounded following Thursday’s decline. Safe-haven sentiment has flowed into the dollar. If GBP/USD dips below 1.2900 (a key psychological level), the outlook will turn neutral, leaning slightly downward. The 14-day Relative Strength Index (RSI) shows oscillators turning bearish, indicating potential for further downside for the currency pair. Failure to breach the psychological 1.3000 level late last week has increased the likelihood of a move towards 1.2900 and 1.2894 (the March 8 low). A break below this level could target 1.2844 (the October 31 low) and the psychological barrier at 1.2800. Conversely, if buyers lift the rate above 1.2990 (last Friday's high) and 1.2995 (the 100-day moving average), they may challenge the next resistance at 1.3049 (the 50.0% Fibonacci retracement of the 1.2665 to 1.3434 range). Above this, the next stop would be the October 15 high at 1.3070.

Today’s suggestion is to go long on GBP around 1.2855, with a stop loss at 1.2845 and targets at 1.2900 and 1.2910.

USDJPY

Due to uncertainty surrounding the Bank of Japan’s (BoJ) potential for further policy tightening, USD/JPY has surged above 153.50. Japan's growth outlook appears weak as Shigeru Ishiba failed to form a majority government. Additionally, Donald Trump’s victory has clouded prospects for Japan’s export sector. In the Asian session on Monday, the yen weakened against the dollar, pushing USD/JPY above 153 following the release of the BoJ’s October meeting minutes, which revealed divisions among policymakers regarding the timing of a rate hike. Coupled with Japan's domestic political situation, the BoJ is expected to face challenges in further tightening monetary policy, weighing on the yen. Furthermore, the general risk-on environment and concerns that U.S. President-elect Trump may target Japan with protectionist trade measures have dampened demand for the safe-haven yen. Meanwhile, expectations that Trump’s policies will boost inflation and limit the Federal Reserve’s scope for aggressive easing have supported the dollar, adding another factor in favor of USD/JPY.

So far, USD/JPY has successfully held above the critical support level of the 200-day moving average at 151.70, a key pivot level. This, along with bullish oscillators on the daily chart, suggests that USD/JPY’s path of least resistance is to the upside. However, further upward moves may encounter resistance around the psychological level of 154.00 and the recent high at 153.88. A break above this area could be seen as a fresh trigger point for buyers, potentially aiming for the 154.70 high on November 6, with an eye on the 155.22 level (July 30 high) as the next target. On the downside, short-term support appears around the Asian session low near 152.60. Any sustained selling pressure could push USD/JPY below the 152.00 psychological level, approaching the 151.70 area (200-day moving average). A clear break below this level would suggest the recent strong rally from the September lows has run out of steam, shifting the short-term outlook to bearish.

Today’s suggestion is to go short on USD around 153.95, with a stop loss at 154.20 and targets at 153.00 and 152.90.

EURUSD

In the Asian session on Monday, EUR/USD continued to face downward pressure for the second consecutive day, trading below 1.0700 and approaching a near 7-month low at 1.0628. The pair is weighed down by a stronger dollar and political uncertainty in Germany. Investors anticipate a potential shift in the Federal Reserve’s dovish stance, as Donald Trump is likely to implement his campaign promises, including imposing a 10% tariff on imports and reducing corporate income taxes. This could push the Fed toward a more restrictive monetary policy, potentially strengthening the dollar and exerting additional pressure on EUR/USD. Increased U.S. tariffs may strain the Eurozone's export sector, potentially impacting economic growth. However, there is considerable uncertainty surrounding the exact impact, timing, and Europe’s potential response to the U.S. tariffs.

After briefly recovering to near 1.0800 during the European session late last week, EUR/USD has fallen back below 1.07 to a 7-month low at 1.0628. The recent trend for this major pair remains bearish, with the 14-day Relative Strength Index (RSI) on the daily chart hovering around 34.00. If RSI (14) continues to decline, the bearish momentum may strengthen. The upward-sloping trendline from the April 16 low near 1.0601 will serve as a key resistance area for euro bulls around 1.0805. Further resistance can be observed at 1.0845 (the 25-day moving average). Looking ahead, EUR/USD has already broken below the key “triple bottom” support region from earlier this year at 1.0686 (June 17), 1.0684 (November 4), and 1.0686 (November 6) lows. The next support to watch is 1.0606 (April 17 low), with a break below this level potentially pointing toward 1.0566 (a near one-year low).

Today’s suggestion is to go long on EUR around 1.0640, with a stop loss at 1.0625 and targets at 1.0685 and 1.0690.

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