US Dollar Index

The US dollar index fluctuated between 96.38 and 97.42 last week. Stronger-than-expected non-farm payrolls data in June eased concerns about the labor market, helping the dollar escape multi-year lows and traders reassessed the possibility of a rate cut by the Federal Reserve in July. On the other hand, President Trump announced plans to start sending letters on trade matters, possibly setting unilateral tariff rates before the July 9 negotiation deadline, injecting new uncertainty into global markets. The US dollar index fell below the 97 mark before the end of last week, ending its gains in the middle of last week as trade policy once again raised concerns. Meanwhile, the House of Representatives passed Trump's massive tax cut and spending bill, which will now be submitted to the White House. The legislation is predicted to expand the federal budget deficit by more than $3 trillion, increasing long-term fiscal risks. Meanwhile, the US economy added 147,000 jobs in June, exceeding expectations of 110,000 and up from 144,000 in May. These data helped ease recession concerns and reduced pressure on the Federal Reserve to cut interest rates in the short term.

The daily chart shows that the US dollar index recently broke out of a descending wedge pattern. After the breakout, the index is currently hovering between approximately 96.38 and 97.42 {last week high/low}, indicating a temporary pause in selling. The index is now attempting to make a slight rebound and seems to be retesting the lower line of the broken wedge close to 96.50-96.700. The first line of defense of the zone currently acts as support. The index is still trading below the 14-day simple moving average at 97.73, reinforcing the bearish setup unless buyers are able to recapture this level with strong momentum. Momentum indicators also support the view of consolidation. The 14-day relative strength index (RSI) is close to 34.60, indicating weak momentum and slightly retreating from the oversold zone. In short, the US dollar index is making a recovery attempt in the range after the breakout, but without a strong catalyst or bullish follow-through, the risk remains tilted to the downside. If it breaks through 96.50-96.70, it may resume the downward trend to 96.38 {last week's low}, and 96.00 {round mark}, while a close above 97.42 {last week's high} may suggest short-term stability to 97.73 {14-day simple moving average}, and then 98.00 round mark.

Today, consider shorting the US dollar index around 97.10, stop loss: 97.25, target: 96.60, 96.50

WTI spot crude oil

Last week, WTI crude oil prices showed a pattern of falling first and then rising, reaching a high of $66.75. As the strong job market supports the Fed's reason for keeping interest rates unchanged, crude oil prices have depreciated due to the potential slowdown in demand. It is worth noting that higher borrowing costs have suppressed economic activity in the United States, the world's largest oil consumer, thereby weakening crude oil prices. At the same time, investors are also waiting for further clarity from US President Trump on tariff plans for various countries. In addition, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, are poised to announce an increase of 411,000 barrels per day (bpd) in August at a meeting this weekend. The total increase in production would bring the increase to 1.78 million bpd by 2025, equivalent to more than 1.5% of global oil demand. The downside for oil prices may be limited as the U.S. Treasury and State Departments announced separate sanctions on Thursday against a network that smuggled Iranian oil and disguised it as Iraqi oil and a financial institution controlled by Hezbollah.

In the short term, the crude oil market will continue to seek a balance between weak demand and geopolitical risks. Although the situation in Iran and trade stability support the market, the actual performance of U.S. crude oil inventories and gasoline consumption is the key to determining the direction of oil prices. From a technical perspective, U.S. WTI crude oil shows signs of short-term weakness on the daily chart. Although there was a strong rebound to $66.75 last week, the price encountered resistance near the $67.00 integer mark and the 21-day simple moving average of $67.53. A break will point to the $68.00 mark and the $68.18 {200-day simple moving average} area, indicating that the upper pressure is still obvious. The 14-day relative strength index (RSI) of the technical indicator hovered around 50, and no obvious bullish momentum was formed. It suggests that there is selling pressure at high levels in the market. The initial support level below is at $64.55 {last Wednesday's low}. If it is lost, it may trigger a technical correction, further testing the $63.63 {50-day simple moving average} and the $63.72 level, the low of the past two weeks.

Consider going long on WTI crude oil near 65.90 today, stop loss: 65.70, target: 67.50, 67.80

Spot gold

Gold prices attracted some bargain hunting before the weekend and now seem to have stopped retreating from the one-and-a-half-week high of $3,365.70 hit the day before. Currently, gold prices are at $3,340, expected to rise about 2.0% for the week. At this stage, traders have reduced their expectations that the Federal Reserve will cut interest rates in July after the stronger-than-expected US jobs data released last Thursday. This, together with the overall positive risk sentiment, has become a headwind for non-yielding gold. The strong jobs data directly pushed up the US dollar and US Treasury yields. The stronger dollar makes gold less attractive to overseas buyers as gold denominated in US dollars becomes more expensive. However, investors remain wary amid the continued uncertainty caused by US President Trump's trade policies. In addition, US dollar bulls remain on the sidelines amid concerns that Trump's "a great and beautiful bill" may worsen the country's fiscal situation. This in turn provides some support to safe-haven gold prices and helps limit downside against the backdrop of the US Independence Day holiday.

From a technical perspective, the recent failure to effectively break through the 20-day simple moving average above $3,350 on the daily chart has made gold/dollar bulls cautious. This resistance level is currently located in the 3,350 {20-day moving average}-3,365 {last week's high area, which should serve as a key turning point. It is followed by the round number mark of 3,400, and after breaking it, gold prices may target the June 16 high mark of $3,452.70. At this stage, gold prices are ready to consolidate in the absence of buyers' commitment to conquer $3,400, although the price action still shows a series of higher highs and lower lows. However, traders must break through the June 16 high of $3,452.70 to challenge the historical high of $3,500 in the short term. On the contrary, if gold/dollar falls below $3,312 {last Thursday's low}, and the $3,300 heart lithium mark, if it effectively falls below the latter, the next support level will be the low of $3,245.50 on June 30.

Today, you can consider going long gold around 3,338, stop loss: 3,335, target: 3,360, 3,365

AUD/USD

Last week, AUD/USD hit a new high of 0.6690 since November last year, and is currently stable around $0.6570, close to an eight-month high, despite the widespread expectation that the Reserve Bank of Australia will implement the third interest rate cut of the year at its monetary policy meeting on July 8. The central bank is expected to cut interest rates by another 25 basis points against the backdrop of cooling inflation and a weak economic outlook. The inflation rate is 2.4% in the first quarter of 2025, still the lowest level since the beginning of 2021, and still within the RBA's 2-3% target range. Meanwhile, GDP is expected to grow by just 0.2% in the first quarter of 2025, down from 0.6% in the fourth quarter of 2024. Economists and markets initially expected three RBA rate cuts this year, but raised their forecast to four in May and now expect five, driven by faster-than-expected deflation and signs of economic weakness. Despite growing market expectations for deeper rate cuts, the Australian dollar has risen by more than 6% this year, supported by broad weakness in the US dollar.

AUD/USD hit another high of 0.6690 last week, the highest since November last year, and is currently holding steady around $0.6570, trading close to an eight-month high. Technical analysis on the daily chart shows that there is a bullish bias as the pair moves upward within an ascending channel pattern. The 14-day relative strength index (RSI) remains above 55, further reinforcing the bullish sentiment. In addition, the pair remains above the 20-day simple moving average of 0.6520, which suggests stronger short-term momentum. On the upside, AUD/USD could retest the eight-month high of 0.6590 marked on July 1, and the 0.6600{round-number mark} area. A successful break above this level could support the pair to test the upper line of the ascending channel, around 0.6660, and a break below 0.6699{76.4% Fibonacci retracement level of 0.59.14 to 0.6942}, and the 0.6700 round-number mark. Conversely, the 20-day simple moving average at 0.6520 acts as a major support level. A break below this level will weaken short-term price momentum and exert downward pressure on the pair to test the market psychological level of 0.6500, followed by the strengthening of the 50 and 65-day simple moving averages at 0.6472 and 0.6430 respectively.

Consider going long on AUD around 0.6540 today, stop loss: 0.6530, target: 0.6600, 0.6620

GBP/USD

The British pound continued its recovery pattern, hitting its highest point against the US dollar since October 2021, before selling poured in and pulled the GBP/USD pair back to the 1.3650 area. After nearly two weeks of stellar performance, GBP/USD buyers took a break on weakness. The main driver was once again the dynamics of the US dollar, but nervousness in the UK bond market also emerged midweek, weakening the pair's recent bullish momentum. In addition, investors pondered the timing of the next rate hike by the Federal Reserve, following the speech of Fed Chairman Powell at the ECB Central Bank Forum in Sintra on Tuesday. The continued weak sentiment around the US dollar pushed the GBP/USD pair to a near four-year high of 1.3789. However, GBP selling quickly poured in as concerns over the UK's fiscal and political situation resurfaced, causing the price of UK government bonds to fall, and GBP/USD fell to a weekly low of 1.3563 on Wednesday.

GBP/USD is struggling with the former resistance-turned-support level of 1.3650, the February 2022 high, after several resistances. Despite the pullback, buyers still managed to defend the 21-day simple moving average support at 1.3587 as the 14-day relative strength index (RSI), a technical indicator on the daily chart, continues to remain above the midline and is currently close to 57. Therefore, maintaining above the 21-day simple moving average on a closing basis is crucial for the GBP/USD rebound to resume. On the upside, the immediate hurdle is located at 1.3753 {last Wednesday's high}, and a breakout will inevitably test the 1.3800 round number. Buyers will then target the 1.3875 {August 13, 2021 high} resistance. If the downward correction momentum strengthens, the 21-day simple moving average at 1.3587 will be the first line of defense for buyers. Further declines may attack the 1.3562 {last week's low} demand zone. The next level is the psychological barrier of 1.3500 will serve as a key support level.

Today, consider going long on GBP around 1.3638, stop loss: 1.3625, target: 1.3700, 1.3710

USD/JPY

USD/JPY rebounded to a near-weekly high of 145.25 last week and is currently consolidating around 144 levels, maintaining a bullish bias in the first half. Because stronger-than-expected economic data reinforced market expectations of a more hawkish stance from the Bank of Japan. Household spending rose 4.7% year-on-year in May, a sharp rebound, exceeding both the 0.1% decline in April and the 1.2% growth forecast. The growth reflects Tokyo's efforts to boost domestic consumption. The yen was also supported by a weaker dollar as uncertainty about U.S. President Donald Trump's policies further benefited the safe-haven yen. Meanwhile, investors remain concerned about trade tensions over Trump's threat to impose more tariffs on Japan over its alleged reluctance to buy U.S.-grown rice, which could complicate the BoJ's monetary policy normalization efforts. Beyond that, the current risk appetite environment could limit further gains for the yen. Traders also seemed hesitant amid relatively thin liquidity due to the U.S. Independence Day holiday.

From a technical perspective, a breakout above the 144.69-144.55 confluence — which includes the 100-hour simple moving average on the 4-hour chart and the 61.8% Fibonacci retracement of the June {142.38}-July {148.03} ​​rally — is seen as a key trigger for USD/JPY bulls. However, the failure near the 145.20, 50% Fibonacci retracement level, and the 145.25 {last week high} supply zone, and the subsequent pullback, calls for caution before making any meaningful upside bets. Meanwhile, any further decline may find some support near the 144.00 round-number mark level, followed by the intermediate support of 143.45, and further downside may extend to the 142.38 {June 3 low} area. On the other hand, the 145.00 psychological mark may now act as an immediate obstacle before the 145.25-145.00 area. Some follow-up buying should allow the pair to test the 146.00 round-number mark and conquer the 146.00 round-number mark, and 146.03 {100-day simple moving average area level.

Consider shorting USD near 144.70 today, stop loss: 144.90, target: 143.80, 143.50

EUR/USD

The EUR/USD pair rose slightly last week amid scarce liquidity due to the US Independence Day holiday. Despite the strong US economic data released last week, the EUR/USD pair is still on track to end the week with a gain of 1.1775 {0.45%}. Last week, market participants still turned their attention to tariffs and the approval of US President Trump's "A Big Beautiful Act". On the other hand, Trump announced that the US will start sending declaration letters to notify countries that their goods and services will be subject to tariffs. He added that the tariffs could range from 10% to 70% and will take effect on August 1. The EU and the US are close to reaching a technology trade agreement in principle. The EU hinted that they are willing to accept a general tariff of 10%, but in exchange for lower rates on medicines, alcohol, semiconductors and aircraft. They are also seeking quotas and exemptions to reduce the current tariffs on automobiles, steel and aluminum. Negotiations between the two sides will continue over the weekend.

From a technical perspective, the EUR/USD pair is in a nearly overbought state, but remains bullish in the long term. The daily chart shows that it has set higher highs and higher lows. Meanwhile, technical indicators are rising with uneven strength, well above their midlines. In fact, the 14-day relative strength index (RSI) is currently at 69.60, showing no signs of weakness to the upside. Meanwhile, the 20-day simple moving average offers support in the 1.1610 area, well below the current level of 1.1775. Currently, the round number mark of 1.1700 acts as immediate support, leading to the previous June 12 high of 1.1632. A break below the latter could open up space for the 20-day simple moving average of 1.1610, and the 1.1600 {round number mark}, but further declines seem unlikely at this point. On the other hand, 1.1830 {this year's high} acts as immediate resistance, followed by the 1.1900 area, as the pair topped out around this area between July and September 2021. A clear break above this level would expose the psychological barrier of 1.2000.

Today, you can consider going long on the Euro around 1.1760, stop loss: 1.1745, target: 1.1800, 1.1820

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