US Dollar Index

The US Dollar Index hit a high of 99.97 yesterday and is currently trading below 99.80 as traders digest the latest FOMC decision. The Fed kept the federal funds rate unchanged as expected, but said that uncertainty about the economic outlook has further increased, and the risks of high unemployment and high inflation have also risen. Traders continue to price in three rate cuts from the Fed this year. Meanwhile, on the trade front, Treasury Secretary Scott Bessant and Trade Representative Jamison Greer will meet with their Chinese counterparts in Switzerland this week to discuss economic and trade issues. However, President Trump said he is unwilling to reduce tariffs on China in advance as a means to promote deeper trade negotiations with Beijing. The dollar has appreciated most significantly against the Australian dollar, the Japanese yen and the British pound.

From the daily chart, the US dollar index is currently trading around 99.50, showing a bearish bias. At this stage, the index fluctuates between 99.00 and 100.00. The 14-day relative strength index (RSI) of the technical indicator is near the negative zone of 44.10, while the moving average convergence/divergence (MACD) sends a buy signal. Both the long and short forces (-0.35) and the ultimate oscillator (49.76) are neutral. The key simple moving average is showing bearish sentiment. Therefore, the resistance level is 100.87 {30-day simple moving average} and 100 {market psychological level}, and the clear support level is 99.00 {integer level}, and 98.90 {last week's low} area level.

Today, you can consider shorting the US dollar index near 99.95, stop loss: 100.08, target: 99.55, 99.40

WTI spot crude oil

WTI crude oil fell 1.7% to around $57.70 a barrel on Wednesday, under pressure from rising economic uncertainty and cautious optimism before the US-China trade negotiations. Both oil price benchmarks hit four-year lows this week, pressured by OPEC+ accelerating the pace of production increases, raising concerns about oversupply, while demand weakened due to the US-China trade war. Upcoming trade talks in Switzerland are seen as a potential first step to ease global market turmoil, although expectations for a breakthrough remain low. The Federal Reserve's decision to keep interest rates unchanged highlighted concerns about rising inflation and unemployment, adding to the cautious mood in the market. Fed Chairman Powell signaled a cautious approach, saying it was too early to determine which risk, inflation or unemployment, would dominate. Meanwhile, EIA data showed that US crude oil inventories fell by 2.032 million barrels last week, exceeding expectations.

WTI crude oil's early week gains were largely technical, with market participants reacting to what they considered to be oversold levels. Oil prices fell below $60 a barrel, triggering fresh buying interest, with $60 acting as a key psychological turning point. Crude oil must decisively break through resistance around $60 to $60.80 {20-day simple moving average}, and $61.80 {April 2 high} to change market sentiment. Prior to this, as the 14-day relative strength index (RSI) of the technical indicator of the daily chart is now in the negative zone of 41, the rebound in oil prices is likely to be sold on the rallies. The first support target is the $57.00 {round mark} level, and the next level will point to $56.79 {Tuesday's low}, or even lower $55.14 {early week low}, and the $55.00 {round mark} area.

Today, you can consider going long on crude oil around 57.40, stop loss: 57.20; target: 59.00; 59.30

Spot gold

Gold fell to about $3,350 an ounce on Wednesday, ending a two-day rally. Gold rebounded early Wednesday and hovered around $3,400 an ounce after the Federal Reserve kept its benchmark interest rate unchanged. The Fed kept interest rates in the range of 4.25% to 4.5%, citing continued economic uncertainty and increased market volatility. In its post-meeting statement, the Fed highlighted rising risks of inflation and unemployment, reinforcing its cautious stance on future rate adjustments. In previous trading, gold was under pressure on news that U.S. and Chinese officials would hold talks this week, a development that had an impact on demand for safe-haven assets. These talks were seen as a potential breakthrough in easing trade tensions, which escalated sharply last month when President Trump raised tariffs on Chinese imports to 145% while reducing tariffs on most other U.S. trading partners. In retaliation, China also imposed high tariffs on U.S. goods, further exacerbating global trade dynamics.

Wednesday's correction in gold prices seems justified as both sides have taken the first step to start negotiations. However, this does not mean that the upward trend in gold is over and it is unlikely that gold prices will fall below $3,000 (a psychological market barrier) anytime soon. These talks are in the preliminary stages and seem to be only intended to ease the situation, with a tail risk that the talks do not go well or may even break down. On the upside, the first resistance level at $3,439.70 looks quite far away, but it could still be tested if there are conflicting headlines or there are surprises at the Fed meeting. If there is follow-through, the second resistance is at the all-time high of $3,500. On the downside, the pivot of $3,360 {Tuesday's low} is the first level to watch for a daily close above or below that level. Further down, the second support is at $3,334 {14-day moving average}, while the technical level of the 3,300 mark should be able to act as support to deal with any sudden reversal.

Consider going long on gold before 3,360 today, stop loss: 3,355; target: 3,380; 3,385

AUD/USD

The Australian dollar fell below $0.65 on Wednesday, retreating from a five-month high, affected by overall strength in the US dollar, following reports that senior US and Chinese officials will meet in Switzerland this week to discuss trade issues. Despite the pullback, the Australian dollar is still supported by optimism about a potential US-China trade breakthrough, given Australia's significant trade exposure to China. To further support sentiment, the People's Bank of China announced plans to cut key lending rates and reduce banks' reserve requirements to stimulate growth. On the domestic front, economic data showed that Australia's industrial sector continued to be weak in April, with trade and election-related uncertainties weighing on manufacturing activity. On the monetary policy front, the market expects the Reserve Bank of Australia to cut its benchmark interest rate by 25 basis points to 3.85% at its May meeting.

AUD/USD sent bullish signals, rising above 0.6500 to a near six-month high of 0.6515 midweek, before retreating to around 0.6425. The 14-day relative strength index (RSI) of the daily chart's technical indicators is 55.85, indicating neutral strong momentum. The moving average convergence/divergence (MACD) indicated a buy signal, and the commodity channel index (CCI) reading of 124.18 also suggested a bullish bias. The average directional index (ADX) was 21.07, which is neutral, indicating a balanced market. The key moving averages further reinforced the bullish outlook. The support levels are respectively at 0.6400, and the break points to the integer level of 0.6374{21-day moving average}. The resistance level is in the 0.6528 area of ​​the high point on November 29, 2024. The second is 0.6600{market psychological barrier}, and 0.6688{November 8, 2024 high} level. It provides a solid foundation for further gains.

Today, it is recommended to go long on the Australian dollar before 0.6410, stop loss: 0.6400, target: 0.6450, 0.6460

GBP/USD

GBP/USD extended its losses on Wednesday after the Federal Reserve decided to keep interest rates unchanged as expected, and the market's attention was focused on the press conference of Federal Reserve Chairman Jerome Powell. The currency pair traded around 1.3280, down more than 0.56%. At Thursday's rate meeting, the Bank of England may be inclined to take a more aggressive easing path in response to global risks, particularly those associated with President Trump's new tariffs, which have heightened concerns about a global economic slowdown. However, the UK is considered relatively immune to US tariffs compared to regions such as China or the European Union, as the US has a $12 billion goods trade surplus with the UK in 2024. The UK has reached a landmark trade deal with India, which is expected to generate £4.8 billion in benefits annually by 2040, which may offset some of the negative impact from US trade tensions.

Despite its strong performance this week, GBP/USD remains in a short-term consolidation range between 1.3450 and 1.3250. Price action tends to be in the middle range, and the 14-day relative strength index (RSI) of the technical indicator has now fallen to around 56, showing that the momentum in the pound market has faded significantly. GBP/USD is still well supported near the 21-day simple moving average of 1.3257, but further upward movement requires strong performance from buyers who are temporarily trapped below the 1.3400 mark. At this stage, the pair may be in the process of forming a bearish “Head and Shoulders” pattern as buyers seem to be losing some momentum near 1.34. A daily close above this level could see a retest of the year-to-date high of 1.3445, thus negating the bearish “Head and Shoulders” chart pattern. Conversely, if GBP/USD falls below 1.3300, a test of the latest swing low of 1.3257 on May 5th is on the cards. If broken, this could be the first sign of a “Head and Shoulders” confirmation and pave the way for a test of lower prices. Near-term support is 1.3200.

Today’s recommendation is to go long GBP before 1.3280, stop loss: 1.3270, target: 1.3350, 1.3360

USD/JPY

On Wednesday, the yen fell below 143 against the dollar, ending a three-day rally as news of the upcoming US-China trade talks in Switzerland eased investor anxiety. Asian market sentiment was further boosted by the interest rate cuts announced by the People’s Bank of China, aimed at supporting economic growth. Traders are also keeping a close eye on progress in U.S.-Japan trade talks, with Tokyo pushing to finalize a bilateral deal by June. On the economic front, Japan's services purchasing managers' index for April was revised upward, highlighting the strongest growth in new orders in nearly a year. Meanwhile, the Bank of Japan kept its benchmark interest rate at 0.5% last week and cut its growth and inflation forecasts, suggesting that future rate hikes are unlikely for now. On the economic front, Japan's services purchasing managers' index (PMI) for April was revised upward, highlighting the strongest growth in new orders in nearly a year. Meanwhile, the Bank of Japan kept its benchmark interest rate at 0.5% last week and cut its growth and inflation forecasts, suggesting that future rate hikes are unlikely for now.

From a technical perspective, last week's failure near the 200-period simple moving average on the 4-hour chart and the subsequent decline favor bearish traders. Moreover, oscillators on the daily/hourly charts remain in negative territory, suggesting that the path of least resistance for USD/JPY remains to the downside. Therefore, any further gains may still be seen as a selling opportunity in the 144.00 area. Next up is the 144.25-144.30 resistance zone, which, if breached, could trigger a short-term covering rally and push the spot price to the psychological 145.00 mark. On the other hand, the 142.35 area or weekly lows seem to now inhibit the immediate downside for USD/JPY, followed by the 142.00 mark. If the latter is effectively broken, the spot price may accelerate its decline, further approaching the next relevant support level in the 141.60-141.55 area, and finally reaching the 141.00 round mark.

Today, it is recommended to short the US dollar before 144.00, stop loss: 144.20; target: 143.00, 142.80

EUR/USD

The EUR/USD fluctuated within the intraday level after the Federal Reserve kept interest rates at 4.5% on Wednesday. The market generally expects that the Fed's interest rate decision in May will remain unchanged, but the key for investors is the extent to which the Fed's stance changes in future rate cuts. According to the Fed's rate announcement, policymakers noted that while U.S. employment and economic activity remain strong overall, risks to the labor force and output have risen, mainly due to policy uncertainty around tariffs and U.S. trade. Fed officials' concerns about economic risks kept market hopes for an imminent rate cut high, briefly pushing up EUR/USD. Sentiment retreated after Fed Chairman Jerome Powell's press conference. Powell noted that if U.S. trade tariffs persist, it will make the Fed's goals in terms of inflation and employment difficult to achieve for the rest of the year.

Technically, EUR/USD flashes a bullish bias overall. The technical moving average convergence/divergence on the daily chart currently sends a sell signal, while the 14-day relative strength index remains neutral, just below 55, reflecting stable but not aggressive momentum. Strong oscillators and stochastics %K also remain neutral, pointing to limited short-term directional strength as the pair consolidates recent gains. Currently trading just above the 1.1300 area, buyers remain in control despite the lack of strong momentum. Although intraday signals indicate temporary hesitation, the bullish stance is maintained. Support is at 1.1300{round mark}, and if it breaks, it will continue to test the 1.1223{last Thursday's low}, 1.1200{round mark} area level. Resistance is near the upper limit of Tuesday's volatility, limited to 1.1381. If it can decisively break through this area, it may reactivate bullish momentum to the 1.1473{April 11 high} area. If it continues to break through the resistance level, it may further rise to the 1.1500 mark.

Today, it is recommended to go long on the euro before 1.1285, stop loss: 1.1275, target: 1.1350, 1.1360.

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