US Dollar Index

The US dollar came under pressure at the start of the week, slipping as investors digested weaker-than-expected retail sales data and prepared for key political developments. On Tuesday, President Trump will discuss Ukraine with Russian President Vladimir Putin. Meanwhile, bond yields are unclear as traders await the Fed's policy update on Wednesday, a key event that will influence future market sentiment. Consumers' concerns about rising prices and frequent changes in economic policy sparked by "tariff talk" have intensified. 12-month inflation expectations jumped to 4.9% (previous value 4.3%), indicating a revision in market expectations for the pace of the Fed's rate cuts. High inflation expectations may force the Fed to keep interest rates stable, but deteriorating consumer confidence may limit the dollar's upside. The US dollar index fell again after several headlines about tariffs and the US spending bill before the end of last week. The rebound has been limited by the 104.00 mark.

The bearish fatigue of the US dollar index after the pullback before the end of last week has emerged. Its price volatility has completely subsided, even after initially recovering its intra-week losses on Friday. As reciprocal tariffs will take effect in April, the US dollar index may recover some of its losses last week. The Bollinger Band middle axis (106.05) on the daily chart is in a closing pattern, and the price is between the middle and lower tracks, indicating a weak oscillating pattern. The MACD indicator DIFF converges below the zero axis, and the downward momentum has weakened; the 14-day relative strength index (RSI) index (31.00) is below 50 but not oversold, and the short-term long and short forces are balanced. If the index breaks through the middle track pressure, it may trigger a rebound to 104 (integer mark) and 104.09 (last week's high) area, and a break will directly point to 104.30 (10-day moving average); conversely, 103 (market psychological mark) is the first support point, and then the lower track of the Bollinger Band 102.81, and 102.53 (76.4% Fibonacci retracement level from 100.16 to 110.18) will become key supports.

Consider shorting the US dollar index near 103.52 today, stop loss: 103.65, target: 103.10, 103.00

WTI spot crude oil

WTI crude oil hit a new weekly high near $68.10 during the European trading session on Monday. Oil prices strengthened on market expectations that China's new monetary stimulus plan will boost domestic consumption. Investors weighed the increasingly dim prospects of a quick end to the Ukrainian war. The end of the war could return more Russian energy supplies to Western markets. WTI crude oil was basically unchanged from Friday's close. Geopolitical games, oversupply concerns and technical signals are intertwined, and the market's long and short forces continue to seesaw. The International Energy Agency (IEA) warned last week that global crude oil supply may exceed demand by 600,000 barrels per day in 2025, mainly due to increased US production and weak demand. Oversupply concerns suppress upside space. Although the negative news has not been fully realized in the market last week, the expectation of long-term oversupply still suppresses market sentiment. In addition, the number of oil drilling platforms in the United States increased by one this week, suggesting that there is potential for future production, further weakening the market's bullish confidence.

From the recent technical trend, the crude oil market will continue to be in the game of "geopolitical risk support" and "oversupply suppression", and the technical side also shows that it is difficult to distinguish between long and short forces. The market is still in a consolidation stage, with oil prices currently reported at around $67.30, and at the central axis of the Bollinger Band (69.52) on the daily chart, showing a weak shock pattern. The MACD is stuck above the zero axis, and the bar is close to the zero axis, indicating a stalemate between long and short forces. As for the 14-day relative strength index (RSI), it is now reported at 41.30, below the 50 watershed, reflecting that market sentiment is weak but not oversold. The first resistance is currently at the 21-day moving average of $68.63, while the key resistance areas are estimated at $70.00 (market psychological level), and $70.39 (March high). On the other hand, the key support below is still the low of last week at $65.00; a break below it will move towards the 2024 low of $64.75; and the low of April 2023 at $64.31.

Today, consider going long on crude oil around 67.10, stop loss: 66.90; target: 68.20; 68.40

Spot gold

Gold prices rose late in the North American session on Monday, hovering around $3,000 for the second consecutive day after data on the slowdown in the US economy was released. Gold/USD traded at $3,000. Risk appetite improved, reflected in the US stock market, and traders shrugged off the weak US retail sales report in February. In addition, the Empire State Manufacturing Index of the Federal Reserve Bank of New York plunged, raising concerns that the economy may fall into recession. Spot gold fell back after hitting a record high of $3,005 earlier due to profit-taking. Gold prices have risen nearly 14% so far this year, partly due to concerns about the impact of Trump's tariffs and the resulting stock market crash. Central bank demand also provided support for gold, with major buyers, Asian giants, increasing their gold reserves for the fourth consecutive month in February. The current gold market is in a game of "strong fundamental support" and "technical overbought correction". Safe-haven demand, central bank gold purchases and interest rate cut expectations constitute the medium- and long-term upward basis, but in the short term, we need to guard against policy expectations and profit-taking selling pressure.

From the MACD of the technical indicator of the gold 4-hour chart, it remains in a long position above the zero axis, but the bar (6.85) is shrinking from the previous value, suggesting that the short-term momentum has slightly weakened. Be wary of the risk of a pullback. The 14-hour RSI has entered the overbought range. Historical data shows that if the RSI is overbought without a rapid price correction, it may absorb the pressure through high-level shocks; on the contrary, if it quickly breaks below 70, it may trigger a deeper technical correction. The upper rail of the Bollinger Band on the 4-hour chart is at $3012.70, the middle rail is at $2939.60, and the lower rail is at $2866.60. The price fell briefly after breaking through the upper rail, but it still ran close to the upper rail, and the channel opening continued to expand, indicating that volatility was amplified and the trend was strong. If the price stands above $3,000, the upward target is $3,012, then $3,018.10 (150% Fibonacci rebound level from 2956.30 to 2832.70), and $3,032.70 (161.80% Fibonacci rebound level) and other new historical highs. On the contrary, if it falls back to the 2,956 area and then continues to fall, it may trigger technical selling pressure to the $2,939.60 level (the middle axis of the Bollinger Band).

Today, you can consider going long on gold before 2,996.00, stop loss: 2,992.00; target: 3,015.00; 3.020.00

AUD/USD

AUD/USD rose sharply on Monday, benefiting from the improved risk sentiment after China's monetary stimulus measures. The Australian dollar strengthened generally, and investors reacted positively to the prospect of increased liquidity in the Chinese economy. At the same time, traders turned their attention to upcoming events, including the Federal Reserve's policy decision and Australia's February employment data, which may provide further direction for AUD/USD. The Australian dollar remained stable against the US dollar after the release of Chinese economic data on Monday. In addition, AUD/USD also rose as the US dollar fell before the release of retail sales data before the end of last week. The Australian dollar may find support as China announced a special action plan to revive consumption over the weekend, which boosted market sentiment across the region. The pair may find support from the possible ceasefire discussions between US President Trump and Russian President Vladimir Putin this week.

AUD/USD hovered slightly below 0.6400 on Monday, maintaining a bullish outlook and reentering the ascending channel on the daily chart. The technical indicator 14-day relative strength index (RSI) also rebounded above 55 (last reported at 59.90), further supporting the positive momentum. Immediate support is located at the 100-day moving average of 0.6346 and 0.6300 (market psychological level). A decisive break below this key support range may weaken the bullish bias and put the pair under downward pressure to 0.6278 (early week low), further pointing to the vicinity of the 0.6200 round number. On the upside, AUD/USD may try to retest the 120-day moving average of 0.6408, and 0.6409 (three-month high on February 21). A break above this level would further solidify the bullish bias and could push the pair towards the 200-day moving average at 0.6521.

Consider going long on AUD today before 0.6370, Stop Loss: 0.6360; Target: 0.6420; 0.6430.

GBP/USD

As the dollar weakens, the British pound rises, testing last week's high of 1.2990. Investors are eyeing important monetary policy decisions from the Federal Reserve and the Bank of England. GBP/USD is trading at 1.2989, up 0.44%. GBP/USD started the new week on a subdued note during the Asian session and traded in a narrow range around the 1.2930 area. However, the fundamental backdrop warrants caution before any substantial correction in the spot price from the four-month high of 1.2990 hit last Wednesday. The dollar is hovering near multi-month lows amid concerns that U.S. President Trump's tariffs and retaliatory measures from other countries could hurt the U.S. economy. In addition, lower-than-expected U.S. inflation and signs of a cooling U.S. labor market could force the Fed to cut interest rates several times this year. This in turn puts dollar bulls on the defensive and provides a tailwind for GBP/USD. In addition, the generally positive tone of Asian stocks is also believed to have weakened demand for the safe-haven dollar.

From the daily chart, GBP/USD has continued to rise strongly for many weeks, successfully breaking through the long-suppressed 200-day moving average (currently around 1.2792), and the upward momentum in the short term is still relatively strong. Since the rebound from the low of 1.2099 (January 13 low), GBP/USD has formed a clear bottom recovery trend, and has continued to advance upward after breaking through the key previous high pressure position of 1.2859 in recent days, and bullish sentiment has been effectively released. However, there are signs of a small correction near 1.2990 (nearly half-year high), indicating that long positions are beginning to be cautious when approaching the important psychological level of 1.3000. The MACD indicator of the daily chart is positive. Although the column is shortened, it is still above the zero axis, indicating that the bullish trend has not ended yet, and short-term correction is a normal phenomenon. The RSI indicator is close to the overbought area (about 70.50), suggesting that the market may enter a shock correction phase in the short term. Therefore, if the bulls continue to rise in the short term, they still need to pay attention to the resistance strength in the area around 1.2990-1.3000, and then the next level is 1.3048 (the high point on November 6 last year), and 1.3100 (the integer mark). If it cannot be effectively broken through, short-term profit-taking is not ruled out, and GBP/USD may face a correction to 1.2861 (last week's low). The next level will point to the 1.2802 (180-day moving average) and 1.2800 (market psychological barrier) area levels.

Today we recommend going long GBP before 1.2978, stop loss: 1.2960, target: 1.3040, 1.3050

USD/JPY

USD/JPY rose for the second day in a row, breaking above the 149.00 level on Monday evening, following mixed US economic data, with good retail sales data and disappointing Empire State Manufacturing Index report from the Federal Reserve Bank of New York. The yen remains on the defensive against its US counterpart heading into the European trading session, although there is some support to the downside. Global risk sentiment was slightly lifted by the new stimulus measures announced by China over the weekend, which in turn was seen as weakening the safe-haven yen. However, the growing acceptance of market participants for the expectation that the Bank of Japan will raise interest rates further has made yen bears hesitant to make aggressive bets. The optimism generated by the stimulus measures announced by China over the weekend was evident in the generally positive tone of Asian stock markets. This in turn was seen as a key factor in weakening the safe-haven yen. However, any meaningful yen depreciation remains elusive against the backdrop of divergence in policy expectations between the Fed and the Bank of Japan. Moreover, geopolitical risks and concerns over the economic impact of U.S. President Donald Trump’s tariffs also supported the yen.

From a technical perspective, USD/JPY broke above the recent high of 149 yesterday, but the trend remains favorable for bearish traders if it fails to find sustained support above the 149.00 mark and the negative oscillator on the daily chart. However, a sustained strong break above this level repeatedly followed by a break above last week’s swing high of 149.20 area could trigger a short-term covering rally and push the USD/JPY pair to the psychological 150.00 level. The momentum could extend further to the 150.65-150.70 area towards the 151.00 mark and the monthly high of 151.30 area. On the other hand, the 148.25 area could protect the immediate downside ahead of the 148.00 mark. If there is some follow-through selling below the 148 level, it could put USD/JPY at risk of accelerating its decline to the 147.00 mark, eventually falling to the 146.55-146.50 area and paving the way for further declines.

Today, it is recommended to short the US dollar before 149.50, stop loss: 149.70; target: 148.50, 145.30

EUR/USD

EUR/USD extended gains during Monday's European session, climbing to the 1.0920 area as bulls returned after a brief corrective phase. The pair recovered modestly, but signs of weakening momentum remain, making the short-term outlook uncertain. EUR/USD remained around 1.0900 during Monday's European trading session, facing resistance after the University of Michigan reported a decline in its preliminary consumer confidence index for March to 57.9, the lowest since November 2022, on Friday. The Fed is widely expected to maintain its current policy stance when it concludes its two-day meeting on Wednesday. EUR/USD may find support from improved risk sentiment amid reports of a possible ceasefire discussion between US President Trump and Russian President Vladimir Putin this week. The euro strengthened after news that Germany reached debt reforms and a significant increase in state spending. This could provide a significant boost to the EUR/USD pair.

From the daily chart, EUR/USD rose to a six-month high of 1.0947 last week and then fluctuated above the key rising trend line (1.0825), which provided support on Thursday and Friday last week. The 14-day relative strength index (RSI) hovered around 70, indicating a slight pullback from the overbought area, while the ADX close to 30 showed that the upward trend remained solid. Therefore, the first obstacle for EUR/USD is at 1.0947 (the high of March 11, 2025). Breaking through this level will expose 1.1000 (market psychological level), followed by the psychological level of 1.1050 (the high of October 3 last year). On the downside, 1.0822 (March 13 low), and 1.0800 (round number level) have become the main short-term support areas. A breakout points to the 1.0765 (23.6% Fibonacci retracement level from 1.0177 to 1.0947) level.

Today it is recommended to go long on Euro before 1.0905, stop loss: 1.0890, target: 1.0950, 1.0960.

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