U.S. Dollar Index

The U.S. Dollar Index pulled back from a two-week high in midweek trading, falling toward 99.00. Although the index was initially supported by a sharp rise in oil prices and the 10-year U.S. Treasury yield reaching a three-year high, it later gave back those gains. The Dollar Index fell to around 99.00 on Thursday, extending the previous session's decline as a sharp rebound in the Japanese yen weighed on the dollar. Markets speculated that authorities had conducted a rate check and could intervene again to support the yen. In the United States, New York Fed President John Williams said there was evidence that inflation was continuing to ease as the impact of tariffs faded, while higher energy prices had not yet spilled over into other service sectors. Data released on Wednesday also showed that U.S. private-sector employment growth slowed in August. Even so, markets continued to price in roughly a two-thirds chance of a Federal Reserve rate hike later this month. Investors are now focused on Thursday's weekly jobless claims for further guidance ahead of Friday's August employment report. Elsewhere, oil prices halted their advance after President Trump said the latest strikes on Iran would be short-lived, easing inflation concerns and reducing safe-haven demand for the U.S. dollar.

The dollar has given back roughly half of this week's gains, which were sparked by hawkish comments from Fed Chair Kevin Warsh last Friday. Importantly, this does not signal a loss of market conviction in further Fed tightening. Despite support from front-end yields, all G10 currencies strengthened against the U.S. dollar on Monday. September is also seasonally a strong month for the Dollar Index. Barring any fresh surprise announcement involving intervention in the U.S. Treasury market, the index could move back above the 100.0 level. On the upside, the 100-day EMA at 99.75 is the key near-term resistance level for bulls to clear. A decisive break and sustained move above 99.75 would bring the psychological 100.00 level into focus. If the dollar remains under pressure, 99.00 (psychological level) and 98.56 (recent low) could provide important support.

Trade idea for today: Consider shorting the U.S. Dollar Index at 99.10. Stop-loss: 99.20. Targets: 98.70 and 98.60.

WTI Spot Crude Oil

Oil prices retreated on Wednesday after reaching their highest level since July 24. Despite an escalation in U.S.-Iran tensions, President Trump said the latest round of strikes on Iran would not "last too long." U.S. crude was trading near $90.00 per barrel on Thursday. The U.S.-Iran conflict has entered its seventh month, and the latest round of attacks was the largest since July, directly threatening oil shipments through the Strait of Hormuz. Preliminary data showed that only four commercial vessels passed through the strait that day, well below the average of about 13 over the previous 10 days. Iran said two oil tankers had been damaged by mines and that it had expanded its list of penalties for vessels violating its restrictions. However, the U.S. Energy Secretary said 17 million barrels of crude had passed through the waterway on Monday. Iraq's exports also increased in August and are expected to rise further in September, while OPEC+ may keep its October production policy unchanged at Sunday's meeting. Meanwhile, the U.S. Energy Information Administration reported a 4.5 million-barrel decline in crude inventories last week, far exceeding expectations for a 1.1 million-barrel draw. That provided additional support to prices and ultimately offset the earlier intraday selling pressure.

The U.S. stance of refusing a settlement and maintaining pressure suggests that the U.S.-Iran confrontation is likely to persist, with near-term shipping risks in the Strait of Hormuz continuing to provide intermittent support for oil prices. From a supply perspective, however, there has been no material disruption to flows through the strait. Sellers can still move crude through smaller vessels and clandestine shipments, while global oil inventories remain ample. With no structural supply-demand shortfall, the scope for a sustained long-term bull market in oil remains capped. Technically, as noted in our previous analysis, oil broke above the descending resistance line of the triangle pattern without a meaningful pullback and then extended the breakout strongly. Near-term support is around $88.50, which is the key dividing line between bulls and bears. The next support area is around $85.10, near the 100-day moving average. If price can decisively break above the $90.00 level and hold above it, the next phase could see a test of $92.25, around the July 23 high. If risk sentiment continues to intensify, a renewed challenge of the previous swing high near $95.00 cannot be ruled out.

Trade idea for today: Consider going long WTI crude at 89.35. Stop-loss: 89.20. Targets: 91.50 and 92.00.

Spot Gold

Gold rose to around $4,470 per ounce on Thursday, rebounding from its lowest level in more than three weeks as the U.S. dollar and Treasury yields eased from recent highs following dovish comments from Federal Reserve officials. Markets reduced expectations for a Fed rate hike after Governor Christopher Waller said he was seeing continued improvement in inflation and would support keeping rates unchanged at the September meeting if the August data confirmed that progress. Waller's comments followed remarks from New York Fed President John Williams on Wednesday, who said there was evidence that inflation continued to ease as the impact of tariffs faded. At the same time, a weaker-than-expected ADP employment report pointed to a slowdown in the U.S. labor market. Traders now see the probability of a September rate hike at around 50%, down from 62% before Waller's comments. Investors are now awaiting Friday's employment report and next week's inflation data for further clues on the Fed's policy outlook.

The gold market is currently caught in an intense tug-of-war between bulls and bears, with multiple competing factors creating significant uncertainty around the price outlook. The technical breakdown is also a concern. Spot gold fell below the 200-day moving average at $4,532 last Friday, a level widely regarded by institutions as a key dividing line for the medium-term trend. Gold failed to reclaim the level quickly after the break and instead remained under sustained selling pressure. Breaks of key technical levels can become self-reinforcing, as shorts accelerate entries while longs are forced to stop out, creating a chain reaction. The World Gold Council has warned that if gold breaks below this week's low of $4,282 again, $4,215 will become a key support level. On the upside, initial resistance is at the psychological $4,500 level, while a stronger bullish extension would target the 200-day moving average near $4,533.

Trade idea for today: Consider going long gold at 4,473. Stop-loss: 4,470. Targets: 4,533 and 4,550.

USD/JPY

The yen strengthened sharply through 156.00 per U.S. dollar on Thursday, rebounding for a second consecutive session as traders watched for signs of intervention while weighing the prospect of more aggressive policy tightening by the Bank of Japan this year. The move began during late New York trading on Wednesday and fueled speculation that authorities had conducted a rate check, a step that often precedes official intervention. Amid wide interest-rate differentials, mounting fiscal concerns, and elevated energy and import costs, the yen fell to a 40-year low in late July, followed shortly afterward by a joint yen-buying operation by Tokyo and Washington. Meanwhile, Bank of Japan board member Hajime Takata raised the possibility of larger or consecutive rate hikes to contain rising inflationary pressure. Governor Kazuo Ueda also said policymakers needed to pay greater attention to upside price risks when conducting monetary policy, suggesting that a rate hike could come later this month.

The yen selloff has largely run its course, while USD/JPY's return toward 160 has put intervention risk back at the center of market attention. The large-scale selling that followed the first round of intervention in July has largely subsided, and neither the subsequent July FOMC decision nor the U.S. Treasury's buyback announcement altered the broader trajectory. In the near term, repeated tests of the 160 level will test the conviction of both bulls and bears, while expectations of intervention have themselves become an important constraint on further upside. On the daily chart, USD/JPY retains a short-term bearish bias because spot remains below the 100-day simple moving average at 159.98 and the Bollinger Band midline at 160.17. Price is only slightly above the 156.00 psychological level, indicating that the pair is approaching the lower end of its recent range. The 14-day Relative Strength Index (RSI) is around 31.48, showing that momentum remains weak after moving out of oversold territory. On the upside, initial resistance is at the 9-day moving average at 159.28, followed by the 100-day simple moving average at 159.98 and the upper Bollinger Band near 160.42. Together, these levels form a dense resistance zone for any rebound attempt. On the downside, 155.50 provides immediate support; a decisive break below that level would open the way for further weakness toward 155.23, the August 3 low.

Trade idea for today: Consider shorting USD/JPY at 156.00. Stop-loss: 156.20. Targets: 155.20 and 155.00.

EUR/USD

EUR/USD held near 1.1620 in early Asian trading on Thursday. Upside in the major pair may remain limited by hawkish Federal Reserve expectations and an escalation in the Middle East conflict. Traders will closely watch Friday's U.S. nonfarm payrolls report. Fed Chair Kevin Warsh warned last week that policymakers might need to tighten policy again if inflation failed to make convincing progress toward the 2% target. His hawkish comments could support the U.S. dollar and create a headwind for EUR/USD. According to the CME FedWatch Tool, market expectations for a September Fed rate hike rose to 62.3%, from less than 40% before his remarks. President Trump said on Wednesday that the strikes on Iran might not last much longer and that Washington would soon see Tehran's "new strategy" in the war. Escalating tensions in the Middle East could drive safe-haven flows and support the dollar. Across the Atlantic, ECB policymaker Gabriel Makhlouf said the central bank should not shy away from further rate hikes if inflation "starts moving in the wrong direction."

On the daily chart, EUR/USD is trading around the pivot at the day's opening level and remains above the 100-day simple moving average at 1.1565, suggesting a modest underlying buying bias, although the pair remains capped by the Bollinger Band midline at 1.1605. The Relative Strength Index (RSI) is in the 50-55 range, a neutral zone that points to balanced near-term momentum. This suggests the pair could either extend modestly higher or consolidate further around current levels. On the upside, initial resistance is at 1.1650 and around last Friday's high at 1.1655, with stronger resistance at the psychological 1.1700 level. On the downside, immediate support comes from the 100-day simple moving average at 1.1565. A deeper support zone sits around the psychological 1.1500 level, where buyers are expected to show greater interest if the pair continues to pull back.

Trade idea for today: Consider going long EUR/USD at 1.1615. Stop-loss: 1.1600. Targets: 1.1670 and 1.1660.