US Dollar Index

During Thursday's trading session, the dollar fell around 104.50. Despite the daily decline in the dollar index, it gained momentum after the Fed's decision and reduced its daily losses. In the long run, the committee seems confident that it will achieve a 2% inflation rate. The dollar rose after Republican candidate Donald Trump won the US presidential election. Trump's victory helped boost the dollar. Meanwhile, the dollar index (an index of the value of the US dollar relative to a basket of foreign currencies) climbed to its highest level since July, around 105.44, before retreating below 105.00. The market is confident that Trump's victory in the US presidential election is a foregone conclusion, with Republican candidate and former President Donald Trump set to win 295 electoral votes. As the Republicans will also win back the US Senate and Congress, investors expect a pro-growth environment, more deregulation, and an increase or extension of business tax cuts. The Fed's new round of interest rate decisions will be announced in the coming week. The market generally expects Fed Chairman Powell to cut interest rates by another 25 basis points, lowering the federal funds rate by 25 basis points to 4.75%.

The US dollar index surged to multi-month highs, driven by bullish technical indicators. The 14-day relative strength index (RSI) and moving average convergence divergence (MACD) technical indicators on the daily chart are close to overbought areas (latest at 65.00), indicating a potential short-term correction. The significant price action on Wednesday suggests that the market will consolidate before further upward momentum. The first key support level is located at 104.20 (23.6% Fibonacci retracement of 100.16 to 105.45), and a break will point to 104.00 (round mark). The first resistance levels are in the 104.63 (previous high), 105.00 (round mark) and 105.25 (Thursday's high) area.

Today, consider shorting the US dollar index around 104.30, stop loss: 104.45, target: 104.10, 104.00

WTI crude oil

On Thursday, WTI oil prices traded around $71.80. After Republican candidate Donald Trump won the US presidential election, the US dollar rose and WTI oil prices fluctuated and consolidated. Trump's victory boosted the US dollar, dragging down WTI oil prices denominated in US dollars. At the same time, the US dollar index climbed to its highest level since July, around 105.44, and then fell back below 104.50. However, Trump's re-election may also mean that the US policy of sanctions on Iran and Venezuela will be continued, which means that the global crude oil market may become more tense, which will make WTI oil prices bullish. Conceptually, the impact of Trump's possible second term on oil prices is ambiguous, and Iran's oil supply faces some short-term downside risks, thereby bringing upside risks to prices.

Crude oil prices fell slightly on Wednesday since former US President Donald Trump emerged as the winner of the US presidential election. At one of his last rallies, Trump confirmed that he wants to promote drilling and mining in the US again. This means more oil supply will hit the market and create another break in the balance, where supply currently exceeds demand. On the upside, $73.59 (61.8% Fibonacci retracement) and the 89-day SMA (73.26) are the next hurdles. A breakout will look to the 100-day SMA at 74.20. The key turning point for the bulls is the 200-day SMA at $76.80, which still has a long way to go, although it may be tested amid tensions in the Middle East. On the downside, the 50-day SMA at $70.44 can be watched, and $70.00 (a psychological level in the market) should be able to resist any selling pressure. For more downside, look towards $68.15 (Oct. 18 low), and $68.08 (last Thursday low).

Consider going long on crude oil near $71.70 today, stop loss: $71.50; target: $72.90; $73.00

Spot gold

Gold continues to recover after Wednesday's sharp drop, trading above $2,700 as the dollar weakened after the Fed's decision to cut interest rates by 25 basis points. Powell's speech revolved around Trump's victory. In one of the most intense campaigns in US history, Donald Trump was elected the 47th president of the world's largest economy. Trump will return to the White House in January 2025 with a stunning victory. As a result, the dollar surged, pushing gold prices to a new three-week low. Gold prices traded near the intraday low of $2,652.30, showing no signs of losing downward momentum. But it's not just the dollar that's rallied after Trump's victory. The dollar index is also running, hitting new highs, while US Treasuries have fallen sharply, sending US Treasury yields to multi-week highs. The exciting times are far from over as the Federal Reserve will announce its monetary policy decision.

From the daily chart, the short pressure on gold/dollar is evident as the bears take back control. The 14-day relative strength index (RSI) of the technical indicator once turned lower to around 43 and then maintained a downward slope, almost vertically downward. In addition, the price of gold also fell below the psychological level near $2,700, and $2,674.70 {61.8% Fibonacci retracement of 2603.50 to 2790). If it falls below $2,643.50 {Thursday's low} again, it will challenge $2,627.80 {55-day moving average), and if it breaks, it will test $2,603.50 (October 10 low), and $2,600 (market psychological level). If gold rebounds, it needs to recover the key psychological level of 2,700 and further challenge the 14-day moving average of $2,718 to resume the upward trend to $2,135 (14-day moving average).

Today, you can consider going long on gold before 2,703.00, stop loss: 2,700.00; target: 2,725.00; 2,730.00

AUD/USD

AUD/USD recovered all the losses on Wednesday and rebounded to around 0.6680 during Thursday's European trading session. The Australian dollar outperformed against major currencies and rebounded strongly despite Australia's monthly trade balance in September being lower than expected. AUD/USD remained subdued for the second consecutive trading day after the release of Australian trade balance data on Thursday. In addition, AUD/USD seems likely to face downside risks due to the appreciation of the US dollar after former President Donald Trump's victory in the US election. Australia's trade account surplus narrowed to AUD4.609 billion in September from AUD5.3 billion expected and AUD5.284 billion in the previous month, the Australian Bureau of Statistics reported on Thursday. This is the smallest trade surplus since March due to a larger decline in exports compared to imports. Traders expect the Federal Reserve to cut the benchmark interest rate by 25 basis points at its November meeting on Thursday.

The daily chart shows that AUD/USD re-entered above 0.6600 on Thursday, maintaining its rebound trend. AUD/USD is above the 9-day (0.6585) moving average, indicating that the downward momentum may be gradually weakening. However, the 14-day relative strength index (RSI) of the technical indicator has returned above 50 (latest at 52), reinforcing the bullish outlook. For the AUD/USD pair, the immediate support is at the 200-day moving average of 0.6628, followed by the psychological level of 0.6600 and 0.6575 (61.8% Fibonacci retracement of 0.6348 to 0.6942). On the upside, the AUD/USD pair may find resistance at 0.6700 (round mark), with further resistance at 0.6728 (55-day moving average). A break above these levels could signal a strengthening of momentum, with the target being the important psychological level of 0.6800.

Today, consider going long on AUD before 0.6665, stop loss: 0.6650; target: 0.6720; 0.6730.

GBP/USD

GBP/USD is trading in a positive range around 1.2980, having eased from an intraday peak of 1.3009. The Bank of England cut its policy rate by 25 basis points as expected, but raised its inflation forecasts. The Federal Reserve also announced a 25 basis point rate cut. GBP/USD attracted some buying during the Asian session on Thursday and rebounded from the lowest level since mid-August, around 1.2835-1.2830, hit the previous day. GBP/USD is looking to build on its gains after breaking above the 1.2900 mark, while the focus has shifted to risk appetite over key central bank events. However, the dollar looks unlikely to extend its decline from the four-month high hit on Wednesday, as optimism about higher economic growth and inflation during Donald Trump's second presidency is likely to slow the pace of rate cuts. Therefore, the outcome of the two-day Federal Open Market Committee policy meeting, as well as comments from Fed Chairman Powell in his post-meeting press conference, will be key in shaping the dollar.

The daily chart shows that the bearish sentiment in GBP/USD persists as the pair tests support near the 200-day MA, currently at 1.2815. After attempting to break above the 50-day MA (currently at 1.2982), GBP/USD faced a sharp decline, indicating selling pressure at higher levels. Bulls struggled to sustain momentum above 1.2982 – 1.3000, leading to a decisive pullback. This price action highlights the importance of the 1.2800 – 1.2815 area as a critical support zone as a break below it could signal a further decline towards the 1.2763 {August 13 low} level. Moreover, in case of a rebound from the 200-day MA, bulls will need to recapture 1.2982 – 1.3000 to turn the short-term bias back to bullish. A close above this level could spark further buying interest, which could target the recent highs around 1.3050.

Today, we recommend going long on GBP before 1.2970, stop loss: 1.2955, target: 1.3010, 1.3020

USD/JPY

On Thursday, Atsushi Mimura, Japan's vice finance minister for international affairs and top foreign exchange official, said he was "closely watching exchange rate fluctuations with a high sense of urgency". Mimura also said he was "ready to take appropriate measures against excessive foreign exchange movements if necessary". USD/JPY retreated from an intraday high of 154.72 after the verbal warning. At this stage, the yen has rebounded significantly against the dollar, consolidating near its lowest level since July 30. The uncertain prospects for further rate hikes by the Bank of Japan and the market's risk appetite have weighed on the safe-haven yen. In addition, the rise in U.S. Treasury bond yields after Republican Donald Trump became the 47th president of the United States has become another factor hindering the low-yielding yen. Meanwhile, the sharp fall in the yen overnight prompted verbal intervention by Japanese authorities, which could provide some support to the yen and help stop the yen's decline.

From a technical perspective, USD/JPY broke through the 153.80-153.85 resistance zone midweek and then strengthened above the 154.00 mark, which was seen as a new trigger by bulls. In addition, the 14-day relative strength index (RSI) indicator, a technical indicator on the daily chart, remained in the positive zone and remained away from the overbought area. This further validates the short-term bullish outlook for USD/JPY and supports its prospects of retaking the psychological 155.00 level. If the momentum is maintained, USD/JPY will continue to rise near the 155.45-155.50 area. On the other hand, the 154.00 round number may now serve as support for USD/JPY. Some follow-up selling after a break below the 153.85-153.80 resistance flip support could push USD/JPY towards the 152.75 support area, and then to the 152.00 psychological level, and then the 151.62 (20-day moving average) support level.

Today, it is recommended to short USD before 153.20, stop loss: 153.40; target: 152.00, 151.80

EUR/USD

After the Federal Reserve announced its decision to cut the benchmark interest rate by 25 basis points, as widely expected, the EUR/USD returned to the 1.0800 price range. The comments of Chairman Jerome Powell put slight pressure on the US dollar. The EUR/USD fell sharply in the middle of the week, falling more than 1.75%, and is in a downtrend and returned below 1.0750 for the first time since July. The US dollar strengthened this week as the results of the US presidential election became clear, with former President Donald Trump becoming the frontrunner. EU-based market data remains relatively limited this week. Eurozone retail sales will be released on Thursday, and this week's EU leaders' summit will end on Friday, with ECB President Lagarde attending a follow-up meeting on Saturday when the market closes. Federal Reserve Chairman Powell cut interest rates by another 25 basis points on Thursday, lowering the federal funds rate by 25 basis points to 4.75%.

The daily chart shows that EUR/USD suffered a considerable setback mid-week. EUR/USD encountered resistance near the 50-day moving average (currently at 1.0950) and has fallen below the 20-day (1.0827) and 200-day (1.0894) moving averages. This technical pullback reflects the market's cautious attitude towards the euro's outlook and indicates that market sentiment has quickly returned as the euro has failed to maintain momentum above key moving averages. Looking at momentum indicators, the MACD is currently above the signal line, but recent weakness has caused the histogram bars to contract and lose upward momentum. MACD approaching zero suggests a possible change in sentiment; if MACD enters negative territory, EUR/USD may decline further. If EUR/USD falls further, it will target 1.2702 (Wednesday's high) and 1.0700, which is a psychological support area and is crucial for judging future market sentiment. A break below will target 1.0666 (June 26 low). If EUR/USD holds above the 1.0700-1.0702 support level, it may prompt the pair to rebound to 1.0843 (20-day moving average), and 1.2871 (October 21 high), with a chance to challenge 1.2900 (market psychological barrier) level.

Today, it is recommended to go long on EUR before 1.0790, stop loss: 1.0775 target: 1.0850, 1.0860.

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