US Dollar Index

Despite high personal consumption expenditure inflation and inflation, and lower jobless claims, the dollar has eroded the bottom of its weekly range. Mildly hawkish Bank of Japan Governor Kazuo Ueda and higher inflationary pressures in the eurozone put pressure on the dollar. Confirmation below 103.90 puts 103.40 in focus. The dollar's gains continued Wednesday and gave some signs of potential exhaustion. The dollar index retreated to a three-day low and broke below the 104.00 support level amid broad weakness in U.S. Treasury yields. The market is awaiting October nonfarm payrolls data later this week and the U.S. election next week. Meanwhile, separate data showed that the U.S. economy grew at an annualized rate of 2.8% in the third quarter, slightly lower than the 3% expected by economists. The data is consistent with steady inflationary pressures, which has forced the Federal Reserve to be cautious in cutting interest rates. The dollar initially appreciated on the news but gave up after Wall Street performed better than expected in the first hour or trading. The mixed data kept the dollar index below 104 for the time being.

The US dollar index, which measures the greenback against six major rival currencies, retreated to a mid-week low of 103.80 after hitting its highest point since July 30 at 104.63 at the beginning of the week. At this stage, the index is still fluctuating around 104.00, while the 14-day relative strength index (RSI) of the daily chart is declining (latest report is around 65), but still close to the overbought area, while the moving average convergence divergence (MACD) is printing small green bars. Therefore, once the US dollar index continues to stay below 104.00 (round mark), and 103.94 (this week's low), it may revisit the 200-day moving average of 103.83, and the 103.53 (23.6% Fibonacci retracement level of 100.16 to 104.57) area level. As for the upside, on the other hand, if the US dollar index can regain above 104.63 (Tuesday's high), the next level will be towards 104.85 (78.6% Fibonacci rebound from 106.13 to 100.16), and 105.00 (market psychological level).

Consider shorting the US dollar index around 103.98 today, stop loss: 104.10, target: 103.60, 103.50

WTI crude oil

WTI crude oil prices fell slightly to around $68.50 during Asian trading hours on Thursday. However, the optimism surrounding US fuel demand has found support for crude oil prices after an unexpected drop in crude oil inventories. The US Energy Information Administration (EIA) reported that crude oil inventories fell by 515,000 barrels in the week ending October 25, contrary to the market's expectations of an increase of 2.3 million barrels. Therefore, it returned above $70.00 in the US session. In addition, crude oil prices may receive further support due to the expectation that the Organization of Petroleum Exporting Countries (OPEC+) (including OPEC and allies such as Russia) may postpone the production increase plan. After the analysis that OPEC+ cannot withdraw from the production cuts in order to stabilize the oil market was just mentioned in the mid-week report, there were news in the evening that OPEC+ may postpone the production increase plan originally scheduled for December for a month or more, which caused oil prices to rebound rapidly.

Oil prices rose by more than 2% in the middle of the week. This is a very critical rebound after the recent decline, temporarily alleviating the risk of oil prices breaking down. Since the beginning of this week, WTI oil prices have formed a small double bottom pattern, with the neckline at around $68.50. Therefore, if it can be held above $68.50 and $68.35 (Tuesday's low), short-term oil prices are expected to rise again. At the same time, the 14-day relative strength index (RSI) and the stochastic index of the daily chart have risen from the oversold area, indicating a short-term rebound in oil prices. The current support level is estimated at $67.12 (Wednesday's low) and $66.57 (October 29 low), and the upper resistance is estimated at $71.22 (65-day moving average). Next is $72.22 (the high of the 24th of this month).

Today, you can consider going long on crude oil around 70.00, stop loss: 69.80; target: 71.30; 71.50

Spot gold

On Thursday, gold prices were clearly on the defensive after a slight rise in the US dollar and a decline in US yields. The lowest was $2,731, but gold prices are expected to remain supported by the uncertainty of stability before the US election. In the early Asian session, spot gold fluctuated narrowly around $2,785/ounce. Gold prices traded as high as $2,790 in the middle of the week, a new all-time high. Gold/USD retreated after the Wall Street opening but met buyers around $2,770 and entered unexplored territory on the way to the above high. Buyers strengthened as the uncertainty of the US presidential election continued to boost demand for gold. In a risk-averse environment, gold demand is likely to continue to outweigh the demand for the US dollar, and when the US dollar weakens, gold will also rise. Solid growth in the US economy in the third quarter has provided support for US Treasury yields, making gold bulls cautious.

Technically, although the 14-day relative strength index (RSI) of gold prices is firmly oriented and is around the overbought positive zone of 72.20, it is still bullish on the daily chart. Gold prices continue to trade above all moving averages, with the 20-day moving average currently around $2,699. The 100 and 200 moving averages are accelerating higher and are well below the short-term simple moving average, indicating continued buying interest. Technical indicators have entered overbought territory and have lost some upward momentum, but are far from showing signs of exhaustion. They will point to higher highs before a downward correction. Before the US election, gold prices are expected to break through $2,800 if they remain bullish, followed by the psychological level of $2,850, and the round number of $2,900. On the other hand, if the bears enter the market aggressively and push the price below the 9-day moving average of $2,751, another support level will be $2,724.70 (this week's low), and $2,718.70 (38.2% Fibonacci retracement of 2603.50 to 2790), and a break of that will point to $2,700 (the psychological level of the market average).

Consider going long on gold before 2,740.00 today, stop loss: 2,735.00; target: 2,760.00; 2,865.00

AUD/USD

AUD/USD extended Wednesday's gains, supported by continued selling pressure on the U.S. dollar. However, weak performance in commodity markets and disappointing Chinese PMI data limited the upside potential of the Australian dollar. The latest Australian data showed that the Reserve Bank of Australia's monthly consumer price index increased by 2.1% in September, down from 2.7%. At the same time, the inflation rate in the third quarter rose by 2.8% year-on-year, and the Reserve Bank of Australia's trimmed mean inflation rose by 3.5% year-on-year, down from 4.0% in the same period last year. Although deflationary pressures are forming, it may not be enough for the central bank to start an easing cycle. The AUD/USD tested a near three-month low of 0.6536 in the middle of the week and once rebounded to slightly below 0.6600. The rebound of the Australian dollar from the multi-week low of 0.6540-0.6535 occurred in the context of further weakness of the US dollar, which prompted most risk assets to rebound significantly. In addition to the decline of the US dollar, the reason for the rebound of AUD/USD is that the market still has doubts about the effectiveness of the stimulus measures announced by China earlier this month.

From the daily chart, AUD/USD rebounded slightly below 0.6600 after testing the nearly three-month low of 0.6536 in the middle of the week. The 14-day relative strength index (RSI) of the technical indicator fell to around 32, showing that short-term bears still dominate the market. If AUD/USD falls further, it may fall to the October low of 0.6536 (October 30), and then 0.6500 {round mark}. On the upside, initial resistance is seen at 0.6600 {market psychological level}, and 0.6596 {Wednesday high}, which will see the 200-day moving average at 0.6628, and finally challenge the 14-day simple moving average at 0.6643.

Today, consider going long on AUD before 0.6570, stop loss: 0.6555; target: 0.6610; 0.6620.

GBP/USD

GBP/USD turned lower in the second half of the month, falling to a near 3-month low of 1.2843. The sharp decline in Wall Street's main indexes helped the dollar to gain a foothold, preventing the currency pair from rebounding ahead of the release of key US employment data on Friday. The pound fell following the release of the UK budget. The focus turned to the US non-farm payrolls report due later on Friday. In addition, according to CNBC, the new British Labour government released its first budget in the middle of the week, which included a 40 billion pound tax increase to plug holes in public finances and allow investment in public services. One of the measures expected to bring the most revenue to the UK Treasury is to increase the amount employers pay in national insurance, a tax on income. The US gross domestic product (GDP) fell in the third quarter, lower than expected. The change in US ADP employment in October showed that private companies hired more people than expected. It may trigger the prospect of a sharp interest rate cut by the Federal Reserve and put selling pressure on the US dollar.

GBP/USD once rebounded from the bottom of the ascending channel trendline, the pair broke through 1.2970 and moved higher, breaking through 1.3000 {market psychological barrier}, hitting a high of 1.3039, and then retreated to 1.2843, a near three-month low, due to strong selling pressure at 1.3049 (50.0% Fibonacci retracement level of 1.2665 to 1.3434). From a technical perspective, GPB/USD broke out of the recent trading range of 1.2907 (near 2-month low last week) to 1.3049 (50.0% Fibonacci retracement level) yesterday, as sellers continued to limit the pair's gains. Buyers must break through 1.3049 to have a chance to continue to challenge the peak of 1.3070 on October 18, so there is still hope to test 1.3100 {round mark}. Otherwise, if sellers push the exchange rate down to 1.2843 (yesterday's low), and 1.2800 (market psychological mark), and the 200-day moving average of 1.2808.

Today, it is recommended to go long on GBP before 1.2885, stop loss: 1.2875, target: 1.2950, ​​1.2960

USD/JPY

USD/JPY was unable to maintain the earlier bullish trend towards the 153.00 area, succumbing to the yen appreciation led by the Bank of Japan, and thus returned to around 152.00 before US non-agricultural product prices on Friday, amid the decline in US Treasury yields. On Thursday, the yen rebounded sharply against the US dollar, once seeing around 151.84. Expectations that Japan's political situation could force the Bank of Japan to adopt expansionary fiscal policy and make it difficult for the Bank of Japan to raise interest rates further continue to be a factor weighing on the yen. That said, concerns about possible intervention by the Japanese government and cautious market sentiment are still boosting the safe-haven yen. In addition, the weak US dollar in the Asian session weighed on USD/JPY. At the same time, expectations of a small rate cut by the Federal Reserve and concerns about deficit spending after the US election continue to push up US Treasury yields. This, in turn, boosted the US dollar and should help to curb the upside in the yen.

From a technical perspective, USD/JPY has repeatedly failed to find support outside of 153.40 (61.8% Fibonacci rebound from 161.95 to 139.58) recently, which warrants caution for bulls. Moreover, the 14-day relative strength index, a technical indicator on the daily chart, is about to enter overbought territory. This further makes it prudent to enter a position for further gains after the recent consolidation or a small pullback. Meanwhile, USD/JPY remains weak below the 153.00 mark and could extend its decline to the 152.00 psychological mark. A break below will test 151.52 (200-day moving average) and head straight for 150.50 (October 22 low). On the other hand, the 153.85-153.90 USD area now seems to have become an immediate strong resistance. If the strength continues and breaks through the 154.00 round mark, USD/JPY may rise to the 155.00 psychological mark, and around 155.22, testing the swing high in late July.

Today, it is recommended to short USD/JPY before 152.30, stop loss: 152.50; target: 151.30, 151.10

EUR/USD

On Thursday, EUR/USD continued its weekly upward trend, this time closer to the key 1.0900 mark, in response to further weakness in the US dollar ahead of the release of key US non-farm data on Friday. EUR/USD achieved a third consecutive day of gains and remained in consolidation after breaking through the key 1.0800 mark. In addition, EUR/USD rose to test the key 200-day moving average near 1.0870. On the other hand, the US dollar's rise showed signs of slowing down, and the US dollar index fell for the third consecutive day and once retested the multi-day low below 104.00. While the US dollar index fluctuated higher, the US Treasury yield curve was also unclear, with the 10-year US Treasury yield rebounding sharply to a multi-week high near 2.40%. In Europe, the European Central Bank cut interest rates by 25 basis points on October 17, lowering the deposit facility rate to 3.25%, in line with expectations. ECB President Christine Lagarde stressed that in the ever-changing economic situation, it is necessary to carefully consider future monetary policies.

From the daily chart, EUR/USD has closed higher for three consecutive trading days, temporarily at a two-week high of 1.0888. If the currency pair rebounds further. The psychological level of 1.0900, and 1.0933 (38.2% Fibonacci rebound level from 1.1214 to 1.0761) become key resistance levels. Breaking points to 1.0987 {50.0% Fibonacci rebound level), and 1.1000 {round mark} area levels. If EUR/USD continues to break through this area level, the outlook will turn bullish. On the other hand, if EUR/USD falls below 1.0821 {9-day moving average} again, and 1.0800 (market psychological level), a break will pave the way for the October low of 1.0760 (October 23), paving the way for a test of the key level of 1.0700.

Today, it is recommended to go long on EUR before 1.0870, stop loss: 1.0860, target: 1.0930, 1.0940.

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