U.S. Dollar Index

The U.S. Dollar Index briefly broke above 98.00 on Thursday, but retreated back toward 97.50 following the release of CPI data. On Wednesday, data showed producer prices unexpectedly declined by 0.1% in August, after July’s increase was revised down to 0.7%, compared with market expectations of a 0.3% rise. This surprise drop eased inflation concerns and reinforced confidence that the Federal Reserve will continue with monetary easing. Markets are fully pricing in a 25 basis point rate cut next week, with an 8% probability assigned to a more aggressive 50 basis point cut. Meanwhile, the Trump administration said it would appeal a federal judge’s ruling that temporarily blocked President Trump from dismissing Federal Reserve Governor Lisa Cook. In addition, dovish nominee Stephen Millan made progress in his confirmation process with the Senate Banking Committee, paving the way for his entry into the Fed.

At present, the Dollar Index is fluctuating below resistance at 98.00 (a key psychological level) and 98.28 (the 34-day moving average). Since mid-August, this zone has repeatedly capped upside momentum, leaving the near-term outlook “neutral to slightly bearish.” The 14-day Relative Strength Index (RSI) is hovering around 47.00, indicating a mild bearish bias. If the Dollar Index breaks below Tuesday’s low of 97.25, or the round-number support at 97.00, it could slide toward the near three-year low of 96.38. On the other hand, a sustained breakout above 98.00 and 98.28 would shift focus toward 98.63, the 100-day simple moving average.

WTI Spot Crude Oil

WTI crude futures fell more than 2% on Thursday to settle at $62.00 per barrel, snapping a three-day winning streak, as concerns over U.S. demand and global oversupply outweighed geopolitical risks in the Middle East and Ukraine. The International Energy Agency noted that supply growth, driven by higher OPEC+ output, was stronger than expected and confirmed the group’s plan to raise production starting in October. In addition, U.S. crude inventories unexpectedly rose by 3.9 million barrels last week. Saudi exports to China are also set to climb to 1.65 million barrels per day in October, intensifying supply worries, though doubts remain about the sustainability of China’s purchase pace. Separately, the U.S. Energy Information Administration (EIA) said on Tuesday that rising stockpiles from OPEC+ and its allies, including Russia, are likely to exert significant pressure on global oil prices in the coming months, which could weaken WTI in the near term.

Although geopolitical events have offered short-term support to oil prices, WTI failed to break through key technical levels. With bearish inventory prospects and increasing OPEC+ production, the overall trend remains under pressure. Unless WTI can establish itself above the 200-day simple moving average at $66.84, traders are likely to continue selling into rallies—especially if EIA data confirm rising inventories. The 14-day Relative Strength Index (RSI) is hovering near 45.00, reflecting a modest bearish bias. The short-term outlook remains negative, with initial support at the $62.00 handle. A break below could see prices weakening further toward $61.60 (this week’s low) and potentially testing the psychological $60.00 level or lower. Conversely, if prices climb back toward the 100-day simple moving average at $64.13, a break higher could open the way to the $65.00 threshold.

Spot Gold

Gold failed to hold support around the $3,660 region on Thursday, briefly retreating to $3,620 as the U.S. dollar extended its three-day advance ahead of the Consumer Price Index release. During the Asian session, prices pulled back to around $3,632. Later, gold saw modest gains, supported by expectations of Federal Reserve rate cuts, a softer dollar, and heightened geopolitical risks. U.S. producer prices rose less than expected in August, reinforcing market bets that the Fed may cut rates at its upcoming policy meeting. This put additional pressure on the dollar and lifted dollar-denominated commodities. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, providing further support. At the same time, rising geopolitical tensions in Europe and the Middle East have driven safe-haven flows into gold.

From a technical perspective, the daily 14-day Relative Strength Index (RSI) remains in overbought territory at 75.00, suggesting short-term consolidation or a deeper pullback may be likely. Still, the broader trend is firmly bullish. To maintain the upward structure, gold must hold the key psychological level at $3,600. A break below could see prices sliding toward support near $3,581.80 (the 9-day simple moving average). If that level fails, the next downside target is around $3,540, the September 5 low. On the upside, the $3,645–$3,655 range is likely to act as near-term resistance, followed by the recent historical high at $3,675. Sustained buying momentum above these levels could open the way toward the $3,700 round number. However, the overall technical picture suggests bulls may be hesitant to add aggressively at current highs, making these resistance zones significant in the short term.

AUD/USD

The Australian dollar traded steadily near $0.6660 on Thursday, close to its highest level since early November last year, supported by improving risk appetite as markets increased bets on Federal Reserve rate cuts. Following an unexpected decline in U.S. producer prices in August, the Fed appears on track to ease in September, raising expectations for deeper monetary accommodation. As a commodity-linked currency, the AUD also benefited from higher oil and gold prices, driven by heightened geopolitical risks. On the domestic front, Australian consumer inflation expectations rose to 4.7% in September from a five-month low of 3.9%, reflecting resilient household demand and stronger private-sector growth, although the RBA remains cautious amid both domestic and global uncertainties.

Technically, AUD/USD traded around 0.6660 on Thursday, maintaining a bullish bias on the daily chart, suggesting strong short-term momentum. Key resistance lies at the upper boundary of the ascending channel near 0.6665. A breakout above this zone would reinforce the bullish outlook and pave the way toward the November 2024 high at 0.6681. A further push higher could target 0.6750, the October 14 peak. On the downside, initial support is seen at the 0.6600 handle and the 9-day simple moving average at 0.6571, which aligns with the lower boundary of the ascending channel around 0.6570. A break below would weaken the bullish bias and expose the 50-day SMA at 0.6521. A deeper decline could dampen medium-term momentum and keep the pair consolidating near the 0.6500 level.

GBP/USD

The British pound climbed to around 1.3580 against the U.S. dollar on Thursday, marking a three-day high. Sentiment was supported by the CME FedWatch tool, which showed traders remain confident that the Federal Reserve will resume monetary easing at next week’s policy meeting. Investors are closely watching upcoming U.S. inflation data for clues on the size of the expected cut. Markets currently see an 8% chance of a 50-basis-point reduction to 3.75%–4.00% on September 17, with the majority expecting a standard 25-basis-point cut. Softer inflation would strengthen expectations for aggressive easing, while hotter data would undermine them.

After touching the weekly high at 1.3590 on September 9, GBP/USD eased back toward 1.3530 earlier in the week. Failure to decisively break above the 1.3590 weekly top and the key psychological 1.3600 barrier could leave the pair vulnerable to further downside. The daily 14-day Relative Strength Index (RSI) remains in bullish territory but has flattened, suggesting the pair may consolidate between 1.3500 and 1.3550. A break below 1.3500 would expose the 50-day simple moving average (SMA) at 1.3464, followed by the 1.3400 handle. On the upside, a firm move above 1.3590 and 1.3600 resistance could open the way to the July 14 high at 1.3681, with further gains targeting the July 2 peak at 1.3752.

USD/JPY

After climbing above 148.00 earlier in the day, USD/JPY sharply reversed course and fell toward 147.00, last trading around 147.20. Renewed selling pressure on the U.S. dollar weighed on the pair in the latter half of Thursday’s session. The U.S. Bureau of Labor Statistics reported that annual CPI inflation rose to 2.9% in August from 2.7% in July, in line with expectations. Core CPI, which excludes volatile food and energy prices, rose 0.3% month-on-month, matching both July’s increase and analysts’ forecasts. In Japan, business confidence improved in Q3, supported by a strong rebound in exports as firms accelerated shipments to the U.S. ahead of newly implemented 15% tariffs. Politically, markets are also assessing the impact of Prime Minister Shigeru Ishiba’s resignation, which came amid growing internal party divisions and mounting pressure following last year’s election defeat.

Technically, USD/JPY failed to extend its rebound from the August monthly low, with daily momentum oscillators favoring bearish traders. A sustained move below 147.00 would strengthen the downside outlook and open the way to retest support at 146.30–146.20. A break below 146.00 could drive spot prices toward the psychological 145.00 level. On the upside, any attempts to rally are likely to meet renewed selling interest around 148.00, limiting advances near the 148.50 barrier. However, a decisive break above could trigger short-covering, pushing the pair toward the 200-day simple moving average at 148.78. Beyond that, resistance is seen at the 149.00 handle and the monthly high around 149.15, where a clear breakout could shift momentum back in favor of the bulls.

EUR/USD

ECB President Christine Lagarde defended the central bank’s decision to keep key rates unchanged at its September policy meeting and took questions from reporters. After two days of losses, EUR/USD stabilized above 1.1700, consolidating in a narrow range. With traders fully pricing in a September Fed rate cut, the euro may find renewed support as the dollar faces pressure, particularly after U.S. producer price data came in softer than expected. According to the CME FedWatch tool, markets are fully expecting a 25-basis-point cut at the upcoming Fed meeting, with odds of a 50-basis-point reduction rising to nearly 12%. On the political front, French President Emmanuel Macron appointed Sébastien Lecornu as the country’s new prime minister. Meanwhile, reports indicate that U.S. President Trump has urged the EU to impose tariffs of up to 100% on India and China in an attempt to pressure Russia to end its war in Ukraine.

Technically, EUR/USD rebounded slightly above 1.1700 after two days of declines. Strong support lies at the confluence of the 20-day and 50-day simple moving averages at 1.1678 and 1.1660, respectively. The 14-day Relative Strength Index (RSI) is near 53.00, still showing a bullish bias, but momentum has weakened after slipping from 60.00. A break below the 50-day SMA at 1.1660 would expose the 1.1600 handle. On the upside, a move above 1.1730 would open the way toward the July 24 high at 1.1780, followed by the psychological 1.1800 level. A sustained break above could bring 1.1830 into view.

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