US Dollar Index

The US Dollar Index climbed above 100.00 on Thursday, reaching its highest level in more than two months, and is on track to post a 3% monthly gain for July—its first advance this year. The latest data showed that the Federal Reserve’s preferred inflation gauge, core PCE, rose 0.3% in June and 2.8% year-on-year, indicating that inflation remains steady and supporting the Fed’s decision to keep interest rates unchanged. However, consumer spending showed little growth, reflecting mixed economic signals. Markets are now focusing on Friday’s July employment report. Meanwhile, President Trump once again criticized Fed Chair Jerome Powell for maintaining interest rates, accusing the central bank of acting too slowly. He also announced new trade measures ahead of his self-imposed Friday deadline, including a 15% tariff on South Korea and a 25% tariff on India. Treasury Secretary Scott Bessent stated that he would meet with Trump to discuss whether to extend the tariff truce with China, expressing optimism about reaching an agreement.

The dollar remains firm, rebounding midweek to a five-week high and extending the 1.1% surge earlier in the week—its largest single-day gain since May 12. At the start of the week, the dollar accelerated higher after the United States and the European Union reached a trade deal that was seen as highly favorable for the US but detrimental to the eurozone. The dollar broke through the 99.00 psychological level and the 99.12 85-day simple moving average resistance area, reaching a two-month high of 100.10. A close above this level strengthened the bullish signal above the key 100.00 psychological level, with the next upside target at the 120-day simple moving average of 100.87. On the downside, the move is supported by the 50-day simple moving average at 99.30, which now acts as immediate support, followed by the 99.00 psychological level.

Today, a short position in the US Dollar Index may be considered around 100.20, with a stop loss at 100.30 and targets at 99.60 and 99.50.

WTI Spot Crude Oil

WTI crude oil futures fell more than 1% on Thursday to $68.86 per barrel, retreating from a six-week high and ending a three-day winning streak as traders assessed geopolitical risks and US inventory data. Investor sentiment remains cautious as President Trump’s push to accelerate a resolution to the war in Ukraine has added uncertainty. The President pledged to impose 100% tariffs on Russia’s trading partners within 10–12 days unless progress is made and warned China that it would face heavy tariffs if it continued purchasing Russian oil. Meanwhile, US crude inventories unexpectedly rose by 7.7 million barrels last week, sharply contrasting with expectations for a drawdown. However, gasoline inventories fell by 2.7 million barrels, far exceeding forecasts, suggesting strong summer driving season demand that partially offset the negative impact of rising crude stocks.

WTI crude is currently consolidating at high levels after previously reaching $70.02, its highest since June 23. Technical indicators are showing mixed signals. The RSI is at 60.60 and moving sideways, reflecting a slight bullish bias and potential for upward momentum. The MACD histogram has just turned positive, hinting at a short-term rebound, but its strength remains weak and needs confirmation through sustained expansion. On the downside, immediate support lies at $68.69, which corresponds to the 38.2% Fibonacci retracement level between $76.74 and $63.72. If this level holds and the MACD histogram strengthens, the price may test the 200-day moving average support at $67.71. On the upside, a break above key resistance at $69.38, the high from Wednesday, would open the way toward the $70 psychological level and $70.02, with a further breakout potentially targeting $71.98, the high from April 2.

Spot Gold

Gold retreated on Thursday to below the $3,300 per ounce level. Since testing a record high above $3,400 in early July, prices have mostly remained subdued due to a hawkish Federal Reserve and diminished safe-haven demand. Core and headline PCE prices for June exceeded expectations, raising concerns about persistent inflation in key areas of the US economy. Meanwhile, lower-than-expected jobless claims reinforced the view of a healthy labor market. As a result, interest rate futures fluctuated, reflecting market bets that the Fed will keep rates unchanged in September. Although US GDP growth for the second quarter surpassed forecasts, trade volatility continues to distort the data as businesses react to President Trump’s series of tariff threats. New tariffs on US imports are set to take effect Friday, though the rates imposed on most trading partners will be lower than those initially threatened by the White House, reducing safe-haven demand for gold.

On the daily chart, the flat 20-day simple moving average continues to act as intraday resistance for the third consecutive day, currently near $3,340. Meanwhile, the 100-day simple moving average provides support around $3,267.50. If the US dollar continues to strengthen, the next bearish target could be the 105-day moving average at $3,250.50, followed by the $3,200 psychological level. Technical indicators also point to a bearish outlook, with the 14-day Relative Strength Index (RSI) near 43, supporting the case for further downside. On the upside, initial resistance stands at $3,331 (7-day simple moving average), followed by $3,345.40, this week’s high.

AUD/USD

The Australian dollar rose to around 0.6430 on Thursday, attempting to recover from the previous day’s loss of more than 1% and ending a five-day losing streak. This rebound was supported by upbeat economic data, with retail sales for June surging 1.2%—the strongest monthly growth since March 2022 and well above the expected 0.4%. Building approvals also jumped 11.9%, marking the strongest increase since May 2023 and the second consecutive month of growth. However, the Australian dollar remains under pressure from the Reserve Bank of Australia’s cautious dovish outlook. RBA Deputy Governor Hauser described the second-quarter inflation data as “very welcome” and in line with expectations but emphasized that the central bank remains cautious and data-dependent. With inflation falling to a four-year low and the unemployment rate rising to 4.3%, markets are pricing in a 95% chance of a rate cut on August 12. Additionally, weaker-than-expected Chinese factory activity has weighed on the Australian dollar, often seen as a proxy for Chinese economic sentiment.

AUD/USD traded around 0.6430 on Thursday. The daily chart shows a bearish bias, with the 14-day Relative Strength Index (RSI) falling to around 42. The pair also remains below the 85-day simple moving average at 0.6448, indicating weak short-term momentum. On the downside, key support lies at 0.6425, the monthly low recorded on July 30. A break below this level could add further downside pressure, with the next targets at 0.6400, followed by the 200-day simple moving average at 0.6390 and the two-month low of 0.6372 recorded on June 23. On the upside, initial resistance is at the psychological level of 0.6500 and the 55-day simple moving average at 0.6504, followed by the 20-day simple moving average at 0.6530.

GBP/USD

GBP/USD attracted some buying interest during the Asian session on Thursday, partially reversing the previous day’s decline after falling to its lowest level since May 13. The spot price is currently trading just below the mid-1.3200s. However, given the broader fundamental backdrop, caution is warranted before expecting any meaningful rebound. Following the surge in the US dollar to a two-month high after Wednesday’s FOMC meeting, the greenback has entered a bullish consolidation phase, which remains a key factor limiting GBP/USD gains. Moreover, in light of the Fed’s hawkish stance, any significant US dollar depreciation appears unlikely. Additionally, Wednesday’s strong US macroeconomic data should continue to support the dollar and cap upside potential for GBP/USD. Uncertainty surrounding the possible extension of the US-China trade truce may also limit any deeper pullback in the safe-haven dollar.

On the daily chart, GBP/USD’s fifth consecutive day of decline has brought the pair’s low at 1.3227 into contact with the 120-day simple moving average near 1.3238. The pair has shifted decisively into a bearish trend after failing to mount a sustained move toward 1.3600. Furthermore, a “death cross” has formed, with the 20-day SMA at 1.3464 crossing below the 55-day SMA at 1.3510, reinforcing the bearish outlook. The 14-day Relative Strength Index (RSI) has fallen to around 33, signaling continued downside momentum, although oversold conditions may present a challenge for fresh bearish positions. If GBP/USD closes below the 1.3200 psychological level, the next downside target is expected at 1.3150 (134-day SMA), with a break lower exposing the 1.3100 level. On the upside, a move above 1.3300 would be needed to challenge the 100-day SMA at 1.3335, followed by the 1.3400 level.

USD/JPY

The Japanese yen weakened for the sixth consecutive day, with USD/JPY surging to a more than four-month high at 150.85 after the Bank of Japan kept its short-term interest rate unchanged at 0.50% as expected. However, the accompanying dovish tone and forward guidance triggered a significant market reaction. The pair decisively broke through the key psychological level of 150.00 and traded around 150.70 during the US session, up nearly 0.85% on the day. Earlier on Thursday, BoJ Governor Kazuo Ueda explained that the decision to hold rates steady was unanimous, while the central bank raised its core consumer inflation forecast for the current fiscal year to 2.7% from the previous 2.2%. Ueda emphasized that any future rate hikes will remain data-dependent and that the BoJ may not wait until underlying inflation reaches the 2% target before acting.

From a technical perspective, USD/JPY confirmed a bullish breakout from an ascending triangle pattern, a continuation formation that typically signals further upside. After retesting the triangle’s upper boundary near 146.00, the pair rebounded sharply, validating the breakout and reinforcing the bullish setup. The pair is now trading well above its short-term moving averages, supported by strong upward momentum. The breakout above the 200-day simple moving average at 149.58 and the psychological level of 150.00 now provides dynamic support. The successful retest of the ascending triangle suggests buyers have regained control, with price action targeting the next resistance levels near the April high of 151.08 and the February high of 154.57. Momentum indicators also align with this bullish outlook. The Relative Strength Index (RSI) is nearing 70, approaching overbought territory, while the MACD remains in a bullish alignment with the gap between the MACD and the signal line widening. The rising histogram bars confirm sustained bullish momentum.

EUR/USD

After three consecutive days of sharp declines, EUR/USD posted a modest rebound on Thursday. The pair recovered slightly to trade around 1.1420, up from Wednesday’s seven-week low of 1.1400 following the Federal Reserve’s policy decision. However, it remains on track for a 3% loss in July. The U.S. dollar has been the standout performer this week, supported by resilient economic data and the Fed’s hawkish stance. At the same time, easing trade tensions with major U.S. partners has removed some of the uncertainty that had weighed on the dollar earlier this year. The Fed confirmed expectations by leaving interest rates unchanged, dismissing President Donald Trump’s calls for easier policy and offering little indication of when the next rate cut might come. As a result, investors have trimmed bets on Fed rate cuts this year, driving the dollar higher across the board.

On the daily chart, EUR/USD fell below 1.1500 and approached the 90-day simple moving average at 1.1408, along with support at 1.1401 (Wednesday’s low) and the key psychological level of 1.1400, before rebounding to around 1.1440. The 14-day Relative Strength Index (RSI) dropped from about 40 to 36, indicating that sellers remain in control and suggesting further downside potential. If the pair breaks below 1.1400, the next target will be the 100-day simple moving average at 1.1352, followed by the 1.1300 level. Conversely, if EUR/USD climbs above 1.1483, which coincides with the 75-day simple moving average, it could open the way to retest the 1.1500 psychological level.

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