US Dollar Index

The US dollar is softening its earlier gains on Thursday, trading either flat or slightly stronger than most of its major peers. US data remains mixed, casting a shadow over the upcoming US jobs report on Friday. The US dollar index fell back below 108.00 and was unable to hold onto larger gains. The US dollar index, which tracks the performance of the US dollar against six major currencies, rose to around 108.00 during Thursday's European trading session. This came after comments by US President Trump revealed his intention to take over Gaza and reach a nuclear deal with Iran. In addition to this, a plan to end the war in Ukraine may also be presented by the Trump administration this week or next week. The US dollar fell to its lowest level in more than a week on Wednesday, with the US dollar index seeing a significant decline. Investors have eased some of their concerns about trade. The US dollar's pullback looks like a continuation of recent moves, with the market continuing to exclude tariff risks from the foreign exchange market. Technically, the US dollar index is facing a test of key support levels,

From a technical perspective, the trend of the US dollar index shows a clear downward correction. The US dollar index briefly broke through the key level of 109.30 (the high of July 14, 2022 and the rising trend line) on Monday, but failed to sustain the breakthrough and eventually fell back. The current downward correction may continue, especially if the support level of 107.35-107.31 is not effectively broken. First of all, 107.35 is the high of October 3, 2023, and 107.31 is the support formed by the low of Wednesday. If this support area is broken, the US dollar index may fall further, and the target may be around 107.00 (round mark) or even 106.51 (89-day moving average). On the other hand, the rebound resistance of the US dollar index still exists. It encountered strong selling pressure at the level of 108.00 (market psychological mark). If the US dollar can break through the level of 108.00, the next important target will be 108.36 (20-day moving average). After breaking through this level, the US dollar index is expected to rise further to 109.00 (round mark), but the possibility of a breakthrough is relatively low in the current situation of relatively uncertain market sentiment.

Today, you can consider shorting the US dollar index around 107.82, stop loss: 107.95, target: 107.40, 107.30

WTI spot crude oil

International oil prices fell as US President Trump reiterated his commitment to increase US crude oil production, which made traders uneasy. WTI crude oil traded around $71.00 in the early Asian session on Thursday. Due to a sharp increase in US crude oil inventories and concerns about Sino-US trade tensions. US crude oil inventories rose sharply last week, indicating weak demand. The US Energy Information Administration (EIA) weekly report showed that US crude oil inventories increased by 8.664 million barrels in the week ending January 31. The potential trade war between China, the world's largest energy importer, and the United States may exert some selling pressure on WTI prices. At present, the oil market is between conflicting forces. Trump's energy and trade policies pose bullish supply risks, while demand uncertainty, OPEC+ decisions and a strong dollar play a balancing role. If the United States imposes severe sanctions on Iran and Russia, and tariffs disrupt North American supply chains, oil prices are likely to break through the $80 mark again. But if OPEC+ increases production or economic concerns suppress demand, oil prices may still fluctuate in the $70-$85 per barrel range expected by many analysts.

With rising US inventories and escalating trade tensions, crude oil prices are under bearish pressure in the short term. Oil prices may test key support levels. However, geopolitical risks, especially around Iran, may bring volatility and provide a price floor. If there are supply disruptions and OPEC+ remains slow to adjust production, oil prices may regain upward momentum. The current resistance level is $72.35 (9-day moving average), and if it breaks, it will be $73.00 (round mark). And further see the 14-day moving average level of $73.37. On the other hand, after breaking below $72.35, a downward move towards bearish price targets is initiated, with the first target at $70.00 (market psychological level), and the key point at $69.28 (low of December 27 last year).

Today, consider going long on crude oil around 70.10, stop loss: 69.90; target: 71.50; 71.70

Spot gold

Gold prices stagnated on Thursday as the US Treasury yields rebounded and the US dollar remained slightly higher. Traders seemed to be taking profits ahead of the latest US non-farm payrolls report, which could trigger volatility in financial markets. Spot gold traded around $2,855, and gold prices continued to hit record highs mid-week as investors sought safe-haven assets amid escalating concerns about the potential impact of tariffs on economic growth. The strong rise in the gold market reflects the uncertainty of the global economic and financial environment. In the current global economic context, the market chooses to put funds into gold as a hedge against possible economic fluctuations and inflation. Globally, gold has become more attractive as a safe-haven asset, especially in the face of tariff fluctuations and increased trade uncertainty. Currently, a key factor in the gold market is the change in global capital flows. Due to the loose monetary policies in many countries and the concerns about inflation and economic slowdown, the gold market has become a major destination for funds to seek safety.

From a technical perspective, the trend of gold prices remains very strong, and there is no obvious reversal sign in the current upward trend. Recently, the price of gold has broken through the historical high, showing the market's strong upward momentum. The price of gold has broken through the $2,800 level, which was the main resistance level in the market. At present, the $2,800 level has turned into a support level. Due to the strong upward trend in the current market, $3,000 has become the market's gold price target area. The current market support level appears at the $2,800 level, which is expected to provide strong support to the market. If the price of gold falls below $2,800, $2,772 (February 3 low) will become an important support level. On the upside, gold prices need to close above $2,882 (Wednesday's high) on a daily basis to refresh the all-time high near $2,900 and point to the psychological $3,000 mark.

Consider going long gold before 2,852.00 today, stop loss: 2,848.00; target: 2,870.00; 2,875.00

AUD/USD

AUD/USD managed to regain traction after retreating to 0.6255 early Thursday, continuing to focus on the key resistance area around 0.6300 ahead of the release of key US NFP data on Friday. The Australian dollar was flat against the US dollar after the release of the lower-than-expected trade balance data on Thursday. Moreover, the AUD/USD pair failed to rebound significantly due to the risk aversion caused by the increased US-China trade tensions. Australia's trade surplus fell to 5,085M in December, lower than the expected 7,000M and the previous value of 6,792M. Exports rose 1.1% month-on-month, slower than the 4.2% increase in November, while imports surged 5.9% month-on-month, higher than the 1.4% increase in the previous month. In early European trading, AUD/USD weakened to around 0.6260, down 0.44% on the day. The Reserve Bank of Australia is expected to cut interest rates to 4.1%. The US labor market report for January, released on Friday, will be closely watched. In addition, traders are closely watching the trade war between the United States and China, Australia's main trading partner. China retaliated against the 10% US tariffs that took effect on Tuesday.

On Thursday, AUD/USD traded around 0.6280. The continued price action on the daily chart is above the 3-day (0.6248) and 20-day (0.6238) moving averages, indicating stronger short-term bullish momentum. In addition, the 14-day relative strength index (RSI) of the technical indicator is above the 54 level, confirming a stronger bullish trend. On the upside, AUD/USD may explore the area around the seven-week high of 0.6330 set on January 24, and 0.6366 (75-day moving average). On the other hand, AUD/USD may find immediate support around 0.6238 on the 20-day, followed by the psychological level of 0.6200. A break below the above support may weaken the bullish bias and push the pair towards 0.6170 (Tuesday's low).

Consider going long AUD before 0.6270 today, stop loss: 0.6260; target: 0.6310; 0.6320.

GBP/USD

In early North American trading Thursday, the British pound fell sharply against major currencies to below 1.2400 as the Bank of England cut interest rates by 25 basis points to 4.5%. The pair was the first to bear the brunt of the interpretation of the Fed-BoE policy divergence. . This is the third rate cut in the current policy easing cycle that the Bank of England will start at its August 2024 policy meeting. The Bank of England is expected to announce a 25 basis point rate cut; however, the 9-0 vote put pressure on the pound. Market participants expect that eight members of the Monetary Policy Committee (MPC) will support the rate cut decision, and outspoken hawkish policymaker Catherine Mann will support keeping the rate unchanged at 4.75%. Traders are preparing for Friday's US non-farm payroll data, which is expected to influence the direction of the Fed's monetary policy.

As seen on the daily chart, GBP/USD once fell below the key support level of 1.2400. After retracing to the 50-day moving average near 1.2500, GBP/USD resumed its decline. The 14-day relative strength index (RSI) fluctuated in the range of 45.00-50.00, indicating a sideways trend. Looking down, the 50-day moving average of 1.2350 will be the first support level for the currency pair. If it breaks, it will test the key psychological support area of ​​1.2300. On the positive side: the cumulative decline from the December high of 1.2811 to 1.2099, the 61.8% Fibonacci rebound range is 1.2539, and 1.2537 (65-day moving average). The larger resistance level is expected to be 1.2593 (75-day moving average) and 1.2600 (round mark).

Today, it is recommended to go long on the pound before 1.2422, stop loss: 1.2410, target: 1.2470, 1.2480

USD/JPY

The yen attracted intraday sellers after hitting a nearly two-month high of 151.20 earlier on Thursday, and is currently trading at the lower end of the intraday range. The Japanese yen continued to remain strong against the U.S. dollar during Thursday's Asian session on expectations that the Federal Reserve will further reduce borrowing costs. Better-than-expected Japanese wage data released on Wednesday further confirmed market bets that the Bank of Japan will continue to raise interest rates. Conversely, the Federal Reserve is expected to further reduce borrowing costs by the end of this year. This will lead to a narrowing of the interest rate differential between Japan and the United States, becoming another factor driving fund flows to the low-yielding yen. Meanwhile, the prospect of further Fed easing and the recent decline in U.S. Treasury yields have kept the dollar hovering near its lowest level in more than a week. This in turn exerted downward pressure on the USD/JPY pair for the third consecutive day and dragged the spot price to the 151.80 area, the lowest level since December 12.

From a technical perspective, the overnight break and close above the 152.50-152.45 confluence - including the 100-day and 200-day simple moving averages - is seen as a new trigger for bearish traders. The subsequent break below the 152.00 mark validates the negative outlook, indicating that the path of least resistance for the USD/JPY pair remains to the downside. Given that the oscillators on the daily chart have not yet entered the oversold zone, the spot price may further decline to 151.50 (intermediate support), and 151.56 (300-day moving average) to reach the 150.00 mark and 150.60 horizontal support. On the other hand, the attempted rebound may now face strong resistance and be capped near the 152.50 confluence support breakout point. However, continued strength may trigger a short-covering rebound and push the USD/JPY currency pair above the 153.00 round number mark. A breakout may negate the negative outlook and shift the short-term bias to bullish traders.

Today, it is recommended to short the US dollar before 151.65, stop loss: 151.85; target: 150.80, 150.60

EUR/USD

The mild rise in the US dollar triggered a correction in the risk complex, and the EUR/USD pair fell back to the 1.0400 range in a steady and cautious manner ahead of the release of the US non-farm payroll data on Friday. EUR/USD corrected to around 1.0360 in European trading on Thursday. As the dollar rose after a sharp decline in the past three trading days. The dollar index, which tracks the value of the US dollar against six major currencies, rebounded from a weekly low of 107.30 to nearly 108.00. The recovery of the US dollar seems to be the result of investors' caution ahead of the January non-farm payrolls data released on Friday. EUR/USD depreciated after two consecutive days of gains. The euro remained sluggish due to the widespread expectation that the European Central Bank will continue its policy easing actions, and officials are confident that inflation will sustainably return to the central bank's 2% target this year. EUR/USD may come under downward pressure. Traders prepare for Friday's US non-farm payrolls data, which is expected to influence the direction of the Federal Reserve's monetary policy.

On Thursday, EUR/USD fell to around 1.0370-1.0380 in European trading hours after failing to hold above the key level of 1.0400 the previous day. The major currency pair is under pressure around the 50-day exponential moving average around 1.0407 and the 1.0400 mark, indicating that the overall trend remains bearish. The 14-day relative strength index (RSI) of the technical indicator of the daily chart is currently fluctuating in the range of 45.00-50.00, indicating a sideways trend. Looking down, 1.0300 (psychological barrier) will become the main support area for the currency pair. A break will point to 1.0272 (February 4 paper point). On the contrary, the 50-day moving average near 1.0407 and the 1.0400 barrier are under pressure, and then the psychological resistance of 1.0500 will be the main obstacle for euro bulls.

Today, it is recommended to go long on the euro before 1.0370, stop loss: 1.0360, target: 1.0420, 1.0430.

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