U.S. Dollar Index

The US Dollar Index fell to 105.50 on Thursday, struggling to rise further after a continuous increase in April. The index weakened following the release of the first-quarter Gross Domestic Product (GDP) data, but the decline may be limited after strong labor market data was announced during the European session. The US Dollar Index briefly rose to around 106.00, boosted by hawkish bets from the Federal Reserve and high US yields. The strong growth of the US economy has led to market expectations of a delayed rate cut. In the US, despite the weakness in the April preliminary Purchasing Managers' Index, the Federal Reserve maintains a stable hawkish stance. Moreover, due to a large injection of supply, US Treasury yields continue to rise, which may further boost the US dollar. The highlight of this week will be Friday's Personal Consumption Expenditures (PCE) for March. US Treasury yields have shown mixed trends. Despite the fluctuating yield trends mid-week, the overall rise in US Treasury yields has supported the strengthening of the US dollar.

Indicators on the daily chart reflect a complex situation. The 14-day Relative Strength Index (RSI) hovering in the positive zone suggests buying momentum, but it has weakened due to a lack of clear direction. This indicates that the bulls are exerting control but are striving for further progress. The convergence and divergence of Moving Average Convergence Divergence (MACD) with decreasing green bars imply that bullish momentum is slowing down, and with selling pressure beginning to build, a potential shift to bearish territory may occur. On the downside, levels to consider are 105.50 (23.6% Fibonacci retracement from 99.57 to 107.34) and 105.51 (14-day moving average). Breaking these levels would continue to test 105.20 (20-day moving average) and 105.00 (psychological level of the market). Although short-term bullish momentum is weak, the US Dollar Index is currently trading above the key short-term 20-day moving average (105.29). This not only indicates sustained buying pressure but also shows a longer-term bullish bias. Therefore, the resistance areas above can be focused on at 106.00 (psychological level of the market), with the potential for bullish behavior if broken. The next levels to look at are the previous high of 106.51 and 106.80 (high point on October 27 last year).

Today, consider shorting the US Dollar Index near 105.70, with a stop loss at 105.90 and targets at 105.30 and 105.20.

WTI Spot Crude Oil

After a significant inventory decline in the U.S. weekly environmental impact assessment data, oil prices briefly rose. WTI crude oil prices soared to $83.50, but faced resistance in breaking through this level. Influenced by the U.S. GDP, the U.S. Dollar Index rebounded generally this week. The Thursday trading price for U.S. WTI crude oil was around $83.40. As concerns over broader conflicts in the Middle East receded, oil prices slightly declined. Moreover, the hawkish tone of the Federal Reserve boosted the U.S. dollar and limited the upside potential for oil. Tensions between Iran and Israel eased, and oil flows from the Middle East remained uninterrupted despite regional conflicts, dragging down WTI prices in recent trading days. However, escalating tensions in the Middle East and any signs of stricter sanctions against Iran could limit the downside potential for WTI prices. Additionally, speculation about the Federal Reserve delaying rate hikes has been increasing, providing some support for the U.S. dollar and acting as a resistance for oil prices. On the other hand, as of the week ending April 19, U.S. commercial crude oil inventories decreased by 6.368 million barrels, a decline of 2.735 million barrels from the previous value. According to data from the Energy Information Administration, this reading marks the largest drop since mid-January.

WTI continues to hover above the 200-hour moving average around $83.15, adding to the recent upward momentum as buying interest seeks bullish rebounds from the $81.00 region. Intraday oil prices remain significantly below the recent high near $87.00, but further downside momentum would require a break below $80.00. Once oil prices drop below $80.00, the first targets are the 200-day moving average at $79.70 and around $79.25 (50.0% Fibonacci retracement from $71.42 to $87.08). The next level to watch is $77.40 (61.8% Fibonacci retracement level). Despite recent bearishness, crude oil prices remain well above the early 2024 low of $70.00 per barrel. Therefore, once a rebound occurs, on the upside, the first resistance is at $84.00 (61.8% Fibonacci retracement from $93.94 to $67.94), followed by testing the level of $85.48 (Monday's high point).

Today, consider going long on crude oil near $83.10, with a stop loss at $82.80 and targets at $84.20 and $84.45.

XAUUSD

In early U.S. trading, gold prices dropped below $2,320 as data showed a significant rise in the U.S. first-quarter GDP price deflator index, causing U.S. yields to soar. However, with safe-haven funds dominating the market, gold prices reversed direction and rose above $2,345. During Thursday's Asian session, gold continued its consolidation trend above the $2,300 mark, with the market focus remaining on the key Personal Consumption Expenditures (PCE) price index to be announced on Friday. This will provide some meaningful momentum for commodities. Meanwhile, recent hawkish comments from several Federal Reserve officials suggest that the central bank is not in a rush to cut interest rates. Additionally, strong U.S. consumer inflation data has forced investors to push back expectations for the first rate cut to September and reduce the number of rate cuts in 2024. This has kept U.S. Treasury yields at elevated levels, acting as resistance to non-U.S. bonds and creating bearish pressure on gold prices. Moreover, concerns about a serious escalation of the Middle East crisis have eased, continuing to limit the upward momentum of safe-haven gold.

From a technical perspective, although gold showed some resistance below the $2,300 mark earlier this week, it now seems to have found support above $2,260.60 (38.2% Fibonacci retracement from $1,984.30 to $2,431.50). Additionally, oscillators on the daily chart have lost attractiveness, so it is not ruled out that gold prices could test $2,300.00 (psychological level and also where the 25-day moving average is located) and $2,277.50 (30-day moving average) again but remain in positive territory. On the other hand, short-term resistance is located near the overnight oscillation high of $2,337-$2,338. If sustained, gold prices will test the next significant barrier at the psychological level of $2,350 and the area around $2,352, and further climb to the supply zone at $2,380. This is followed by the round number of $2,400 and the historical peak near $2,431-$2,432.

Today, consider going long on gold before $2,328.00, with a stop loss at $2,325.00 and targets at $2,350.00 and $2,355.00.

AUDUSD

The AUD/USD continued its bullish performance, rising for the fourth consecutive trading day on Thursday, although a sustained breakthrough of the key 200-day moving average at 0.6526 remains elusive. The AUD rose slightly for the fourth consecutive trading day on Thursday. After strong Australian Consumer Price Index (CPI) data was released on Wednesday, the AUD against the USD increased. The Australian CPI for the first quarter of 2024 rose by 1.0% quarter-on-quarter, higher than the expected 0.8% and 0.6%. The CPI (year-on-year) increased by 3.6%, compared to the forecast of 3.4% for the first quarter and the previous forecast of 4.1%. Furthermore, the easing of tensions in the Middle East created positive market sentiment, benefiting risk-sensitive currencies like the AUD and supporting the AUD/USD exchange rate. The Australian 10-year government bond yield surged to above 4.49%, close to a five-month high, and the AUD followed suit. The rise in yields is attributed to increasing expectations that the Reserve Bank of Australia (RBA) will adopt a more hawkish stance on its interest rate trajectory.

The AUD/USD traded near 0.6520 on Thursday. The currency pair hovers above the lower boundary of a symmetrical triangle pattern. Further upside may induce neutral sentiment, with the currency pair possibly targeting the psychological level of 0.6600 and challenging the upper boundary of the triangle near 0.6639. On the downside, immediate support is expected around the psychological level of 0.6500. A break below this level could lead to further downside momentum, with the next significant support area near 0.6451 (10-day moving average). The AUD/USD currency pair may find further support around 0.6400 (psychological level).

Today, consider going long on the AUD before 0.6500, with a stop loss at 0.6480 and targets at 0.6540 and 0.6550

GBPUSD

The GBP/USD reversed direction and rose above 1.2500 after dropping to the 1.2450 area earlier in the day. Despite risk aversion in the market, the USD struggled to find demand after disappointing GDP data. In early Asian trading on Thursday, the USD rebounded slightly, and the GBP/USD exchange rate ended its two-day rally near 1.2460. On Wednesday, U.S. durable goods orders for March increased by 2.6%. However, these reports did not significantly impact the U.S. Dollar Index. Several Federal Reserve officials, including Federal Reserve Chairman Jerome Powell, emphasized that interest rates will not be cut in the coming months as inflation remains higher than expected. The hawkish comments from Federal Reserve officials and the long-term upward stance supported the USD and acted as resistance for the GBP/USD currency pair. On the other hand, Bank of England Governor Andrew Bailey and other central bank officials stated that the decline in UK inflation is in line with the Bank's expectations, and the risk of rising inflation has decreased, paving the way for rate cuts. The Bank of England will begin its easing cycle before the Federal Reserve pushes down the GBP and limits the downside space for this major currency pair.

Technically, after forming a "morning star" in the middle of the week, the GBP/USD is expected to continue rising, but traders must decisively clear the high of April 24 at 1.2470, which will pave the way towards 1.2500. Next, the first key resistance level will be the 200-day moving average at 1.2559, with a breakthrough pointing to 1.2600 (psychological level). On the other hand, if the GBP/USD is still constrained by the high of April 23, it may pave the way for a pullback to 1.2400. A decisive breakthrough will expose the low of April 22 at 1.2299, and once this low is broken, it may open the door to test the low from March 2023 (around 1.2250/60).

Today, it is advised to go long on the GBP before 1.2500, with a stop loss at 1.2480 and targets at 1.2550 and 1.2560.

USDJPY

Despite verbal intervention from the Finance Minister, the USD/JPY continues its upward trend. The significant interest rate difference between the U.S. and Japan is seen as a major factor causing the rise in interest rates. A substantial amount of funds priced in USD may limit the rise of the USD/JPY. On Wednesday, the yen against the dollar fell, and the USD/JPY broke through to its highest level since June 1990, reaching near 155.40 for the first time in 34 years, with the yen continuing its freefall. The USD/JPY exchange rate is very close to a level that may force Tokyo authorities to intervene. During Thursday's Asian trading session, the yen further dropped below the psychological level of 155.00 and reached its lowest level since June 1990. The significant interest rate difference between Japan and the U.S. is believed to be a key factor continuing to weaken the yen. However, this move increases the risk of intervention by Japanese authorities, which in turn may prevent yen bears from establishing new bets. Traders may also choose to wait and see before the Bank of Japan makes a key monetary policy decision on Friday. Despite historic monetary tightening this year, the return on the yen remains relatively meager, so it might not be surprising to see the yen in trouble. The USD/JPY has risen from 140.00 to the 155.00 level this year, with the yen hitting a 35-year low. The market is clearly watching whether the USD will surge well above 155.

Since the beginning of the year, this currency pair has risen significantly, with its rapid upward trend now placing the 200-day moving average nearly 8 yen below the current market. Currently, the 155.00 psychological resistance level is limiting the market. Given the speed of the upward trend, the longer it lasts, the greater the chance of a meaningful reversal. Technically, the USD/JPY's overnight breakthrough of the short-term trading range and subsequent breakthrough of the 155.00 mark can be seen as new triggers for bullish traders. However, the Relative Strength Index (RSI) on the daily chart remains in the overbought territory (79.20), so caution is needed before the intervention concerns and the Bank of Japan event risk. Nevertheless, the USD/JPY currency pair seems poised to continue the recent strong upward trend established since the March low and is expected to break 155.70 (upper boundary of the daily chart's upward channel) and 156.31 (223.6% Fibonacci rebound from 150.88 to 146.48), laying the foundation for the continued upward trajectory of nearly two months. On the other hand, any meaningful corrective decline may attract new buyers and continue to be limited around the 154.90-154.85 area. This is followed by the support area of 154.55-154.45, which, if broken, may trigger some technical selling and drag the USD/JPY to the 154.00 psychological level.

Today, it is suggested to short the USD before 155.90, with a stop loss at 156.10 and targets at 155.00 and 154.80.

EURUSD

The EUR/USD quickly rebounded from Wednesday's minor decline and resumed its upward trend above 1.0700, which was against the backdrop of continued selling of the USD ahead of Friday's key personal consumption expenditure data. Despite the market fully expecting the European Central Bank (ECB) to cut interest rates at its June policy meeting, both the EUR/USD and GBP have risen over the past few trading days. The weakness of the USD may be temporary as this week's U.S. core PCE could still reinforce the long-term market view that U.S. interest rates will remain high for a longer period. During Thursday's early Asian trading session, the EUR/USD hovered around the psychological level of 1.0700. The weakened USD supported a slight rise in this currency pair. Data released by the U.S. Department of Commerce on Wednesday showed that U.S. durable goods orders for March rose by 2.6% on a monthly basis, compared to a growth of 0.7% previously, exceeding expectations of 2.5%. Although rising U.S. inflation rates may delay plans to cut interest rates, the Federal Reserve's shift towards a more accommodative policy stance is evident. ECB President Christine Lagarde indicated that the ECB may cut the deposit rate from its historical high of 4% in June. The dovish stance of the ECB has put selling pressure on the euro and created headwinds for the EUR/USD currency pair.

The daily chart of the EUR/USD shows that the currency pair is currently trading near 1.0700 after rebounding from a near 5-month low of 1.0600 last week. From a technical perspective, the EUR/USD appears to have completed a corrective rally and is preparing to resume its upward trend. Although the 14-day Relative Strength Index (RSI) maintains a downward slope, standing at a negative level (44.50), aligning with dominant selling pressure, the currency pair seems to show signs of a reversal. Once it breaks above the 20-day moving average at 1.0730, it will first face resistance near the high of April 11 at 1.0756. The next key upward barrier appears at the intersection of the low on March 22 and the psychological level of 1.0800. The currency pair still needs to break below the 1.0600 mark to confirm a bearish continuation, but before that, pay attention to the region near the 10-day moving average at 1.0660 and the low of April 23 at 1.0638.

Today, it is advised to go long on the EUR before 1.0710, with a stop loss at 1.0700 and targets at 1.0760 and 1.0770

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