Dollar Index

The dollar was flat at the start of the U.S. trading session. Reaction to the retail sales data was limited. The U.S. dollar index retreated from this year's lows, but the rebound was modest. The U.S. dollar index fell for a third straight session, falling well below the 101.00 support level, while bond yields moved lower across the board. At the beginning of the week, the U.S. dollar index fell to 100.61, hitting its lowest level since January. The Fed is on the verge of repeating past policy mistakes. The Fed's expected actions, particularly rate cuts, will be followed by a return to QE, a repeat mistake that will create more debt and send consumer prices soaring. This would crush the dollar and reignite inflation. On the other hand, the U.S. dollar index fell sharply, warning that it could "trigger a dollar crisis, leading to an economic collapse and a spike in consumer prices and long-term interest rates. Higher inflation and stagflation will affect consumer prices and interest rates. A weaker dollar Potentially exacerbating U.S. economic problems because it makes dollar-denominated debt easier to repay, but at the cost of higher inflation and reduced consumer purchasing power.

Observed from the daily chart, the 14-day relative strength index (RSI) indicator, a technical indicator of the U.S. dollar index, remains near 40.00, indicating that the U.S. dollar index still has more room to move before it becomes technically oversold. The Moving Average Convergence Divergence (MACD) is also trending downward, confirming the bearish outlook. This suggests risks are skewed towards the trade, although momentum has weakened. At this stage, the US dollar index is in the negative zone and has resumed its downward trend. The index has fallen below its 20-day (101.24) simple moving average, indicating waning buying momentum. Therefore, the short-term downward target of the US dollar index can be considered first. The "triple bottom" key support level composed of lows of 100.60 (28/12/2023); 100.51 (27/8); and 100.57 (September 6 low). Then points towards the psychologically important 100.00 level. As for the upside, 101.00 will be the first level of resistance on the USD Index, and if the rally continues, bullish long attempts should be made at 101.52 {23.6% Fibonacci bounce level from 104.80 to 100.51}, and $101.84 (last week’s high point) level encounters direct resistance.

Today you can consider shorting the US dollar index near 101.10, stop loss: 101.20, target: 100.80, 100.70

WTI crude oil

Crude oil prices rose, turning green on the day. Oil prices began to rise after the Federal Reserve slashed interest rates and Tropical Storm Francine destroyed 3.6 million barrels of oil production. The U.S. Dollar Index is still trading at the lower end of September's bandwidth. U.S. WTI crude oil was trading around $69.80 on Tuesday. WTI oil prices gained momentum as Hurricane Francine disrupted U.S. Gulf of Mexico crude production. This in turn pushed WTI oil prices to near two-week highs. Additionally, the Federal Open Market Committee (FOMC) will announce an interest rate decision on Wednesday. Lower interest rates will lower borrowing costs, which typically boosts demand for oil. On the other hand, since China is the world's largest oil importer, continued concerns about Chinese demand may put some selling pressure on crude oil. Data released last weekend showed that China's industrial output above designated size fell to a five-month low in August, and China's total retail sales of consumer goods and new home prices deteriorated further in August. Recent weaker-than-expected economic data from China has weighed on market sentiment, and the outlook for long-term low growth in the world's second-largest economy has heightened concerns about oil demand.

Crude oil prices have vacillated between bear and bull markets, although there is not much evidence to support the bull case. For now, there's one factor that's yet to come that could break crude's slide: the Federal Reserve's interest rate decision. If the rate cut is larger than expected, crude oil prices could rise. The first level on the rise is $70.00, a key psychological level for market issues. Once the daily close exceeds this level, $72.10 {August 5 low}, and $72.08 {67.79 to 87.84 78.6% Fibonacci retracement level} will resurface as the first levels to watch. Out of the water. Next, it points to the levels of $73.94 {45-day moving average}, and $73.86 {previous week's high}. Eventually, a return to $75.27 is still possible, but most likely only after a huge change in the current balance. Support should be very close to $68.19, the triple bottom from the summer of 2023, and 68.17 (10-day EMA). The next level is $66.64 (last Thursday's low), if this level faces a second test and falls, further reference can be made by 64.45 (last March low); 64.40 (last April low); and 64.75 The key level of the "triple bottom" formed by the U.S. dollar (low in September this year) is $64.60.

Today you can consider going long crude oil near 69.70, stop loss: 69.50; target: 70.80; 71.00

Spot gold

Gold remains under moderate bearish pressure on Tuesday, trading below $2,570. The yield on the benchmark 10-year U.S. Treasury note held steady above 3.6% ahead of the Federal Reserve's policy announcement on Wednesday, making it difficult for gold prices to gain bullish momentum. At the beginning of the week, gold prices hit a record high of $2,590.00. Currently, gold prices have retreated slightly from this level and are trading around $2,580.00. However, investors are divided over the pace of future Fed easing, with some traders and economists now expecting the Fed to cut interest rates by half a percentage point this week. Lower borrowing costs are generally seen as positive for gold because gold does not bear interest. Whether the Fed cuts rates by 25 basis points or 50 basis points matters in the short term. The decision "may send a stronger signal" about how the FOMC "views the current economic outlook." Precious metals prices were also supported by a weaker U.S. dollar, which fell following the assassination attempt on former President Donald Trump. Gold prices have risen by more than a quarter so far this year, hitting another record high of $2,590.00 on Friday as the Federal Reserve signaled a shift toward easier monetary policy.

The short-term technical trend of gold prices shows that it is currently rising slightly. The 14-day relative strength index (RSI) indicator on the daily chart remains near 69.50, indicating that gold still has more room to rise before it becomes technically overbought. This suggests risks are tilted to the upside, although momentum has weakened. Gold prices finally moved away from the bullish 10-day simple moving average currently located near $2,535. The 50-day (2,466), and 100-day (2,405) simple moving averages are well below the shorter simple moving averages, maintaining upward momentum, reflecting continued bullish sentiment. The initial short-term upside targets are $2,600.00 (the market's psychological level), and $2,613 (the 200% Fibonacci rebound level from 2450 to 2287), above which a test of $2,660 (the upper track of the upward channel since mid-February). As for the downside, the 5-day moving average of $2,563 will be the first target, followed by $2,531.70 (previous historical high), and $2,500 (market psychological barrier) support level.

Today you can consider going long gold before 2,565.00, stop loss: 2,560.00; target: 2,585.00; 2,590.00

AUD/USD

AUD/USD maintained a positive trend on Tuesday despite market participants widely expecting the Federal Reserve to begin its easing cycle on Wednesday. Renewed selling pressure on the U.S. dollar from late last week boosted risk assets, helping the Australian dollar gain momentum and prompting AUD/USD to regain the 0.6700 mark and above at the beginning of the week. That said, AUD/USD has still recovered all of its pre-weekend losses, which is always in line with the overall bullish outlook. While AUD/USD is bullish, it remains challenged by intermittent USD strength and ongoing concerns about China's economic performance. In fact, while AUD/USD rose strongly at the start of the week, copper prices also strengthened further, while iron ore prices fell slightly. With iron ore prices closely tied to China's housing and industrial sectors, weakness could limit further gains for the Australian dollar. Monetary policy developments have provided support to the Australian dollar recently. AUD/USD is likely to gain further ground later this year as the likelihood of a rate cut from the Federal Reserve is almost fully priced in, while the Reserve Bank of Australia is expected to maintain restrictive policy for an extended period.

The latest report from the U.S. Commodity Futures Trading Commission (CFTC) for the week ended September 10 showed that speculative net shorts in the Australian dollar rose to a two-week high, while open interest saw a sizeable rebound. Notably, the Australian dollar has been in net-short territory since the second quarter of 2021, with only a brief two-week net-long position earlier this year. AUD/USD is expected to rise further and hit a seven-month high near 0.6798, breaking through 0.6800 (the market psychological barrier), and the August high of 0.6823 (August 29), followed by the December 2023 high of 0.6871 (December 28). On the other hand, bears could push AUD/USD below the September low of 0.6700 (the round-number mark), find immediate support near the 100-day EMA at 0.6657, and 0.6650 (the central axis of the descending channel), followed by the 200-day simple moving average Level of 0.6622. The final point is 0.6600 (market psychological mark), and 0.6598 (downward channel lower track) support area.

Today you can consider going long Australian dollar before 0.6740, stop loss: 0.6730; target: 0.6785; 0.6790.

GBP/USD

GBP/USD is trading at lows in the second half of Tuesday, trading below 1.3200. The cautious market stance ahead of the Federal Reserve policy meeting supports the US dollar and limits the pair's upside. Markets were quiet at the start of the week, with GBP/USD rising to a high of 1.3230. The market will usher in major central bank moves this week. The market is generally expecting the Federal Reserve to cut interest rates and the Bank of England to cut interest rates again, so investor sentiment remains stable. In the UK, consumer price index (CPI) inflation will be announced in early trading on Wednesday, and the annual inflation rate in August is expected to remain stable at 2.2%. As with U.S. retail sales, individual data is not expected to cause much market reaction as long as the data is within a reasonable range of the median market forecast. The Bank of England will also announce its own interest rate decision on Thursday, but compared with the Fed's interest rate decision, the Bank of England's interest rate decision is expected to attract less attention.

The pound/dollar surged at the beginning of the week, boosting the pound/dollar to return to the 1.3200 mark. The daily chart shows that the 14-day relative strength index (RSI) indicator of technical indicators climbed above 58, and the pound/dollar simply moved on the 20-day A close above the moving average (1.3146) highlights the increasing bullish momentum. On the upside, first support is likely at the 29-month high at 1.3266. GBP buyers will find the next relevant resistance levels at the 1.3300 round figure, and the 1.3350 psychological level. Although overall bullish, it cannot be ruled out that short-term GBP/USD may be the first to make profit-taking technical operations, pushing the currency pair down to 1.3146 (20-day moving average), and 1.3122 (Monday's low). Once it falls below the above-mentioned support area, the pound will /USD may continue to fall to 1.3047 (30-day moving average) level before taking a breather

Today it is recommended to go long GBP before 1.3140, stop loss: 1.3125, target: 1.3190, 1.3200

USD/JPY

The yen traded sideways from continued hawkish sentiment surrounding the Bank of Japan's interest rate outlook. Japan's Shunichi Suzuki said the government will continue to evaluate the strength of the yen and respond if necessary. In early Asian trading on Tuesday, USD/JPY recovered some losses near 140.80, ending a five-day losing streak. However, upside potential for USD/JPY may be limited amid growing expectations that the U.S. Federal Reserve (Fed) will initiate an easing cycle at its September meeting. Later this week, monetary policy meetings from the Federal Reserve and Bank of Japan will take center stage. The U.S. dollar remains under pressure as expectations of Fed easing increase. Federal Reserve Chairman Jerome Powell told the Kansas City Fed's annual economic symposium in Jackson Hole last month that inflation was under control enough for the central bank to finally feel comfortable rolling back its tightening policy. On the other hand, the Bank of Japan is not expected to raise interest rates on Friday. The main determinant of the Japanese yen is the interest rate or yield gap with the United States, and the main player in this is the Federal Reserve, which seems ready to cut interest rates.

The daily chart shows that USD/JPY fell below the 140 key psychological level at the beginning of the week to 139.58, the low since July last year. If it falls below 140.00 - 139.58 again, the decline may continue, and the 14-day technical indicator The relative strength indicator (RSI) shows that momentum suggests bears remain in control. Therefore, the downside targets can be focused on 138.07 (low on July 31 last year), and 135.42 (76.4% Fibonacci retracement level from 127.22 to 161.95) levels. However, a "Dragonfly Doji" bullish reversal pattern was formed at Monday's closing, so a technical rebound may be expected in the short term. In case of further strength, the first level of resistance for USD/JPY will be the conversion line at 143.00, followed by the 20-day moving average at 143.69. A break above these resistance levels would lead to baseline resistance at 144.58 (1 50.0% Fibonacci retracement level).

Today it is recommended to short before 142.55, stop loss: 142.80; target: 141.70, 141.60

EUR/USD

Despite a corrective decline on Tuesday, EUR/USD is poised to extend its upward momentum in the short term as investors continue to expect the Fed to cut interest rates by 50 basis points at its September 18 meeting. The pair gained ground at the start of the week on the back of USD shorting pressure, with EUR/USD climbing back above 1.1100 to end last week's move, leaving the market uncertain for the week ahead. Risk appetite dominated the Asian session on Tuesday as investors waited to see if the Fed would cut interest rates. In Europe, economic events were light, aside from a speech by ECB President Lagarde. With little data to watch from the EU, the euro's performance will depend entirely on what the Fed says this week. It is almost certain that the Fed will start a new round of rate cuts on Wednesday, with the discussion now being about the magnitude rather than the timing. The interest rate market also expects the Fed to cut interest rates by a total of 125-150 basis points by the end of the year, with interest rate traders seeing the Fed lowering the funds rate to 4.00% - 4.25% by December 18.

The one-sided price action at the beginning of the week has pulled the buying back to the highs above 1.1100, but from a technical perspective, long-term bulls are still clearly in a state of retreat. The price action rebounded above 1.1100 after falling from the one-year high of 1.1201 in late August to the low of 1.1005, but the currency pair is still trapped in a pressure trap technically. Although the rebound from the 1.1000 mark last week is bullish, the upward momentum is still not strong enough. EUR/USD faces initial resistance at the September high of 1.1155 (September 6), and then hit the 2024 high of 1.1201 (August 26) and 1.1200 (market psychological level). A breakout points to the 2023 peak of 1.1275 (July 18). On the contrary, the pair's next downside targets could be 1.1074 (9-day moving average), and 1.1075 (Monday's low), the next level is the September low of 1.1005 (September 11) and 1.1000 (market psychological barrier).

Today, it is recommended to go long before 1.1100, stop loss: 1.1090, target: 1.1150, 1.1160.

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