Dollar Index

The dollar, which measures the value of the greenback against a basket of six currencies, fell to a new nine-day low on Monday after opinion polls showed Vice President Kamala Harris leading in the U.S. presidential election. The decline marks a reversal of the dollar's recent strength, which was driven by expectations of a Donald Trump victory and strong economic data. Despite the weak jobs data, the dollar index, which measures the value of the greenback against a basket of six currencies, rebounded intraday after the release of U.S. non-farm payrolls data for October over the weekend as wage inflation rose to 4% year-on-year, indicating that inflationary pressures remain high. At the same time, the market still almost fully expects the Federal Reserve to cut interest rates by 25 basis points next week. On the economic data front, the September ISM Purchasing Managers Index was also mixed. The dollar index continues to consolidate near the 104.00 mark below. Weak job growth despite persistent inflation has raised expectations of a less hawkish Fed, which could start to weigh on the dollar.

From the daily chart, the US dollar index retested the 200-day simple moving average at 103.84, and the support area of ​​the central axis of the "Bollinger Band" (103.65). The 14-day relative strength index (RSI), one of the technical indicators, is still near the positive zone (58.60), but there are signs of turning downward. At the same time, the green bars of the moving average convergence and divergence narrowed, indicating that the momentum of the short position has increased. In this sense, if the buyer shows resilience, there may be better performance near the above-mentioned moving averages. The main support levels include 103.84; 103.65; and 103.12 (100-day moving average), while the resistance levels are 104.02 (10-day moving average); 104.63 (last week's high); and 105.00 (round mark). Traders are keeping an eye on these levels for breakout opportunities.

Consider shorting the US Dollar Index around 104.05 today, Stop Loss: 104.20, Target: 103.70, 103.60

WTI Crude Oil

Crude oil prices surged above $71.00 in European markets on Monday. The big move came after OPEC+ agreed to postpone a 180,000 barrel production increase until December. The US Dollar Index is licking its wounds after Sunday polls showed Harris winning by a slight margin. The outcome of the US presidential election is also likely to have an impact on the oil market. However, Trump's impact on prices is rather ambiguous here, so only specific measures are likely to have an impact on prices. In the short term, oil prices will be determined by the production plans of the eight Organization of Petroleum Exporting Countries (OPEC+), which pledged to voluntarily cut production by 2.2 million barrels per day nearly a year ago. In early September, they announced that they would reopen the oil taps month by month starting in December, totalling about 180,000 barrels per day. While most of the production cuts are fixed until the end of 2025, if the voluntary production cuts are withdrawn, it could lead to oversupply and put further pressure on prices. If a delay is announced, this should support prices. However, prices are unlikely to rise sharply as China's crude oil import volume, which will be released on Thursday, may bring demand concerns back into focus. If Iran attacks Israel again in the coming days, prices may rise.

From the daily chart, WTI crude oil prices re-entered $70.00 (market psychological level) at the beginning of the week. The 14-day relative strength index (RSI) indicator of the technical indicator re-entered around 52.20 at the beginning of the week, while the stochastic index of another technical indicator is still rising, but the rise was capped at $72.25 (50.0% Fibonacci rebound level from 77.93 to 66.57) last Friday. If this area can be further broken this week, it is expected to further consolidate the tendency of oil prices to start a rebound trend. The subsequent resistance is estimated at an important technical level of $73.59 (61.8% Fibonacci retracement) and the 89-day moving average (73.63) may be the next big obstacle in the future. On the contrary, if WTI crude oil prices return below the two important pivot levels of $69.78 (10-day moving average) and $70.00 (psychological level), more downside risks may be just around the corner. Support levels are estimated at $68.15 (October 18 low) and $68.08 (last Thursday's low), and the next level reference is $67.12, which supported prices in May and June 2023.

Consider shorting crude oil near 71.20 today, stop loss: 71.00; target: 72.50; 72.70

Spot gold

Gold was on the defensive below $2,750 in European trading on Monday, erasing early gains. However, the downside seems elusive amid the risks of the US presidential election and continued geopolitical tensions in the Middle East. Gold prices rose modestly in early Asian trading on Monday, interrupting two consecutive declines and trading near $2,740. The uncertainty of the US presidential election and tensions in the Middle East may boost safe-haven demand, thereby supporting gold. The approaching US election, the uncertain situation and the continued geopolitical tensions in the Middle East provide support for the upward trend of precious metals. The focus this week will be the US presidential election on Tuesday. Regardless of the outcome of the US election, a pullback in gold prices will provide good buying opportunities. On the other hand, rising US Treasury yields have made zero-yielding assets such as gold and silver less attractive by comparison. The recovery of US dollar demand and rising US Treasury yields may suppress the price of gold denominated in US dollars.

The daily chart shows that gold prices cut most of their weekly gains after hitting another record high of $2,790 last week, and a corrective decline may continue, although gold prices are still bullish from a long-term perspective. In the daily chart, the 14-day relative strength index (RSI), a technical indicator, has fallen sharply from an overbought reading and is moving steadily downward above the midline. At the same time, gold prices are still above all moving averages, which maintain a bullish slope and provide dynamic support. If it can break through $2,756.70 (5-day moving average) at the beginning of the week, a breakout will point to the previous record high of $2,790, and even run towards $2,800 (round mark), and $2,805.20 (upper Bollinger Band). On the other hand, once gold profit-taking occurs, it is possible that it will first fall below $2,728.20 - $2,731.60, and the downside will test the support of $2,718.70 (38.2% Fibonacci retracement of $2603.50 to $2790). If the above support is also lost, the next level is $2,700 (market psychological barrier).

Today, you can consider going long on gold before 2,732.00, stop loss: 2,728.00; target: 2,750.00; 2,755.00

AUD/USD

AUD/USD resumed its rebound and briefly broke through the 0.6600 mark against the backdrop of a clear recovery in the downward trend of the US dollar. At the same time, investors expect the Reserve Bank of Australia to keep interest rates unchanged on Tuesday. In early Asian trading on Monday, AUD/USD strengthened to around 0.6620. AUD/USD was boosted by a weaker dollar following the release of weaker-than-expected US nonfarm payrolls data for October. However, the uncertain outlook for the US presidential election could boost the safe-haven US dollar and weigh on riskier assets such as the Australian dollar. The US nonfarm payrolls report for October increased by 12,000, far from the market's expectation of 113,000. Meanwhile, the unemployment rate for October was 4.1%, in line with the market consensus. Economists expect the Federal Reserve to cut interest rates by 25 basis points in November. Investors will be closely watching the results of the US presidential election on Tuesday as it could trigger volatility in financial markets. For the Australian dollar, the Reserve Bank of Australia is expected to keep interest rates unchanged at a 13-year high as the pace of deflation is slow and global uncertainty is rising, highlighted by the upcoming US presidential election.

From the daily chart, the 14-day relative strength index (RSI) of the AUD/USD technical indicator is now in the negative 37.30 area, indicating heavy selling pressure, while the moving average convergence divergence (MACD) histogram is red and trending down. The overall technical outlook for the currency pair remains bearish, indicating that the downtrend is likely to continue. If it falls further, AUD/USD will fall to the October low of 0.6536 (October 30), and then 0.6500 (market psychological level). On the upside, if it stabilizes above 0.6600 in the short term, resistance is at 0.6628 of the 200-day moving average, and then 0.6645 (50.0% Fibonacci retracement of 0.6348 to 0.6942), and a break will directly reach the 0.6693 level.

Consider going long on AUD today before 0.6570, stop loss: 0.6560; target: 0.6610; 0.6620.

GBP/USD

GBP/USD remains in positive territory above 1.2950 after failing to clear 1.3000 earlier in the day. The 10-year Treasury yield fell more than 2% on the day ahead of the US presidential election, weighing on the dollar and keeping the pair stable. GBP/USD jumped to around 1.2998 on Monday amid a weak dollar. The dollar remains under some selling pressure following the weak US non-farm payrolls for October, which provided some support to GBP/USD. The dollar moved lower as traders prepared for the US presidential election and the Federal Reserve rate decision this week. Analysts expect Donald Trump's policies on immigration, tax cuts and tariffs to put upward pressure on inflation, Treasury yields and the dollar, while Kamala Harris is seen as a candidate to continue existing policies. The market generally expects that Trump's victory will boost the dollar. On the other hand, the Bank of England may cut interest rates on Thursday, even though there are forecasts that the Labour Party budget may lead to higher inflation in the UK next year. The currency market seems to believe that the Bank of England will announce a second interest rate cut of 25 basis points this year.

The 14-day relative strength index (RSI) indicator of the daily chart is consolidating around 42.20, indicating that GBP/USD remains bearish but lacks momentum in the short term. On the downside, sellers continue to limit the pair's gains, so the first support seems to be 1.2904 (134-day simple moving average), and 1.2900 (market psychological level). Once below the above areas, the next support will be seen at 1.2844 (October 31 low). On the other hand, if GBP/USD stabilizes above 1.2900, 1.3000 (market psychological level) may be seen as the next resistance level before 1.3049 (50.0% Fibonacci retracement of 1.2665 to 1.3434). And there is a chance to continue to challenge the peak of 1.3070 on October 18.

Today, it is recommended to go long GBP before 1.2940, stop loss: 1.2925, target: 1.2985, 1.2995

USD/JPY

On Monday, USD/JPY remained sharply below 152.00 in Asian trading as the US dollar sold off sharply due to the increasing possibility of Kamala Harris winning the US presidential election on Tuesday. Policy continuity is seen as negative for the US dollar, dragging down the currency pair. Driven by the rising uncertainty of the US presidential election on Tuesday, the US dollar fell and the yen rose on Monday. However, the liquidity of the yen is somewhat limited as the Japanese market is closed on sports days and physical transactions of US Treasuries cannot be carried out. The yen may weaken in the future as political and monetary policy uncertainty increases after the Liberal Democratic Party coalition won a majority in parliament last week, which has caused confusion about the policy direction of the Bank of Japan. However, Bank of Japan Governor Kazuo Ueda pointed out in a post-meeting briefing last Thursday that economic risks in the United States seem to be decreasing, indicating that this may pave the way for potential rate hikes. Weaker-than-expected non-farm payrolls data in October may be one of the reasons for the decline of the US dollar ahead of the Federal Reserve's interest rate decision later this week.

From the daily chart, it shows that the bullish tendency may weaken. USD/JPY traded around 151.80 on Monday. As the currency pair has fallen below its ascending channel. However, the 14-day relative strength index (RSI) of the technical indicator is still above 50 (latest at 58.30), indicating that bullish action is still there. In terms of resistance, the obstacle facing USD/JPY is at the lower line of the ascending channel, which is the 152.90 level. If the pair manages to re-enter the channel, recent highs at $153.70 (a trendline stretching upwards from the Sept. 30 low of 141.65) and 153.88 are likely. On the downside, the 14-day exponential moving average (EMA) at 151.60 is immediate support for USD/JPY, with decent support found around the 150.99 - 150.78 area. Some follow-through selling could target 150.50 (Oct. 22 low) and 150.00 (a psychological level). The latter should now serve as a key pivot point and solid support for USD/JPY, which, if decisively breached, would set the stage for further declines in the near term.

Today, we recommend shorting the USD/JPY before 152.35, stop loss: 152.50; target: 151.40, 151.20

EUR/USD

As investors gear up for the US election and FOMC events later this week, EUR/USD managed to break through the key 1.0900 level and hit a new high after the US dollar made its stance. In Asia on Monday, EUR/USD recovered the recent losses from the previous session and traded around 1.0880. The upside in EUR/USD can be attributed to the weaker US dollar after the release of weaker-than-expected US non-farm payrolls data for October. However, the uncertain outlook for the US presidential election may drive safe-haven flows, which may limit the upside of EUR/USD. On the other hand, stronger-than-expected economic growth and higher-than-expected inflation in the eurozone in the third quarter provided support to the euro, prompting traders to reassess the ECB's larger-than-expected rate cut in December. Currently, the market has fully priced in the ECB's 25 basis point deposit rate cut in December. The preliminary reading of the Eurozone Consumer Price Index in October rose to 2.0% year-on-year from 1.7% previously.

At the beginning of the week, EUR/USD rebounded again to the central level around 1.0870, where the 200-day moving average (1.0869) and the 20-day moving average (1.0864) converge. Once the pair reconfirms this level as support, technical buying may remain interested. In this case, temporary resistance is located at 1.0900 (round number), and 1.0905 (Friday's high), and then 1.0939 (100-day moving average). A break will re-cross 1.1000 (market psychological level). If EUR/USD fails to effectively break through 1.0870, it may face bearish pressure again and retreat to 1.0800 (round number) and 1.0760 (October 23 low). And it may further move towards the 1.0700 (round number) level.

Today it is recommended to go long on Euro before 1.0860, stop loss: 1.0850, target: 1.0895, 1.0910.

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