US Dollar Index

The US dollar index continued its downward trend on Tuesday, hovering around 103.40 as trade tensions escalated. The market was shaken by US President Donald Trump's decision to increase tariffs on Canadian steel and aluminum to 50%, further pressuring the dollar. The dollar index, which tracks the greenback against a basket of currencies, struggled to capitalize on the previous day's modest gains during Tuesday's European session and attracted fresh selling. The index is currently trading at around 103.23 and is close to its lowest level since October last year. Investors are concerned about US President Trump's trade tariffs and their potential impact on the US economy. In addition to this, the weak US non-farm payrolls report released on Friday showed signs of a cooling labor market. This continued to fuel market speculation that the Federal Reserve will cut interest rates multiple times this year, causing US Treasury yields to remain subdued, thereby weakening the US dollar. In addition, the recent rebound in the euro due to Germany's historic agreement to ease borrowing restrictions and the strengthening of the yen driven by expectations of a rate hike by the Bank of Japan have further weighed on the dollar. However, the general risk-averse environment may provide some support for the safe-haven dollar. Traders may also avoid placing heavy bets before the latest US inflation data is released.

The daily chart shows that the US dollar index consolidated after last week's sharp decline and rebounded slightly above 104.00 at the beginning of the week. However, the US dollar index has fallen below 105.17 (50.0% Fibonacci retracement level from 100.16 to 110.18), and the 200-day simple moving average near 105.03 confirmed the bearish pattern and strengthened the negative trend. The 14-day RSI of the technical indicator is in the oversold area (latest report is near 26.00), suggesting the potential for a short-term rebound. If the US dollar index fails to recapture the 104.06 (Monday's high), and 104.40 (last Thursday's high), the next support level is around 103.34-103.38 (last November's "double bottom"), and the next key level of attention is 103.00 (market psychological level. This may mark the continuation of the current sell-off until the 102.52 (76.4% Fibonacci retracement level of 100.16 to 110.18) level finds support.

Today, consider shorting the US dollar index around 103.55, stop loss: 103.70, target: 103.10, 103.05

WTI spot crude oil

Oil prices rose slightly on Tuesday as a weaker dollar boosted market sentiment, but concerns about a slowing U.S. economy and the impact of tariffs on global economic growth limited gains. #Crude Oil Close# Both international benchmark crude oil prices fell 1.5% in the previous trading day. WTI crude oil prices rose in early European trading on Tuesday. WTI traded just above $66.00 a barrel, up from $65.67 at the close on Monday. Brent crude also rose, rising to $69.28 from $68.99 on Monday. In early Asian trading on Tuesday, U.S. WTI crude oil prices traded around $65.60. WTI prices continued to fall due to concerns that U.S. tariffs on Canada, Mexico and China will slow the global economy and cut energy demand. Continued uncertainty surrounding the Trump administration's trade policy and a global economic slowdown that could lead to reduced oil demand could weaken WTI prices in the short term. On the other hand, possible U.S. sanctions on Iran and Russia could provide support for WTI prices.

As seen in the technical chart, The 14-day RSI and stochastics on the daily chart are recovering from the oversold area (RSI is at 31.70), indicating that the downside of oil prices may be limited. The current support level is estimated at $65.00, the low of last week; the next level is expected to be the 2024 low of $64.75. The market may see a short-term rebound as buying support may be found near last week's low of $65.00. A rebound in oil prices from the 2024 low will allow traders to look at $67.50 (the low of December 10 last year) and $67.36 (9-day moving average) as the next upper target. If the price breaks through this point, the next upper position will be $68.38 (14-day moving average).

Today, you can consider going long on crude oil near 66.15, stop loss: 66.00; target: 67.50; 67.70

Spot Gold

Gold reversed course after falling on Monday and traded above $2,910 on Tuesday. Investors remain concerned about the possible economic impact of U.S. President Trump's tariffs, leading to continued pressure on the U.S. dollar and supporting gold prices. Gold prices broke through $2,900 in the first half of the European session to hit a new intraday high of $2,912, reversing major losses from the previous day and retreating to a one-week low. Investors are concerned about the possible economic impact of U.S. President Trump's trade tariffs and ongoing geopolitical risks. This continues to drive global risk-off trades and help revive demand for safe-haven metals. At the same time, expectations that a tariff-driven slowdown in the U.S. economy may force the Federal Reserve to cut interest rates multiple times this year have kept U.S. Treasury yields subdued. This, in turn, dragged the dollar back to near multi-month lows and became another factor in favor of non-yielding gold prices. However, traders may avoid establishing new bullish bets on gold/dollar ahead of the release of U.S. inflation data this week.

From a technical perspective, the early-week break below the $2,900 round number, or the lower limit of the short-term trading range, could be seen as a key trigger for short traders. Nonetheless, mixed oscillators on the daily chart make it cautious to await further selling pressure below the $2,880 area, the weekly low. The subsequent decline could drag gold prices to last week's swing low, around the $2,856 support level, and then approach the late February swing low, around the $2,833-2,832 area, and the $2,800 mark. On the other hand, if gold prices further break through the $2,900 round number, they may face some resistance in the $2,922-2,924 area. If the resistance level is continuously broken through with strength, gold prices may break through the resistance of $2,930 (last week's high) and retest the record high reached on February 24, around the $2,956 area.

Consider going long on gold today before 2,910.00, stop loss: 2,906.00; target: 2,930.00; 2.935.00

AUD/USD

AUD/USD is trading near 0.6300 amid uncertainty over the US economic outlook. The pair has benefited from a weaker US dollar as investors focus on upcoming inflation data, which could affect Fed policy expectations. However, ongoing trade tensions and global growth concerns still limit AUD/USD's upside potential. The Australian dollar appreciated against the greenback for the fourth straight session on Tuesday. However, AUD/USD remained under pressure in the early trading session despite the Westpac Consumer Confidence Index rising 4% to 95.9 in March from 92.2 in February, a three-year high. The rise in sentiment was driven by the Reserve Bank of Australia's rate cut in February and easing cost of living pressures. Australia's 10-year government bond yield fell to around 4.39% amid escalating global trade tensions. China's retaliatory tariffs on some US agricultural products came into effect on Monday, after Washington raised tariffs on Chinese imports from 10% to 20%. Given that China is Australia's largest trading partner, these developments weighed on market sentiment. With the Fed entering a dark period ahead of its March 19 meeting, central bank comments will be limited this week. Investors now look forward to the release of the February Consumer Price Index (CPI) on Wednesday for further insights on inflation trends.

AUD/USD traded close to 0.6290 on Tuesday, and technical analysis on the daily chart shows that the pair has fallen below its 14-day moving average of 0.6300, which is also a psychological level for the market and signals a weakening of short-term momentum. In addition, the 14-day relative strength index (RSI) of the technical indicator is close to the 50 level, indicating a shift in bearish bias. On the downside, AUD/USD's immediate support level may be 0.6234 (last Wednesday's low), and a break below it will look towards the 0.6200 round number level and last week's low of 0.6187. On the other hand, 0.6300 (psychological mark) is an immediate resistance, followed by Monday's high of 0.6331. A break above this level could strengthen short-term momentum and push the pair towards the 100-day moving average of 0.6358.

Today, consider going long on AUD before 0.6280, Stop Loss: 0.6270; Target: 0.6330; 0.6340.

GBP/USD

GBP/USD has now extended its recovery further above the 1.2900 mark, reaching a high of 1.2966, the last trading level in early November last year, which has always been against the backdrop of a sharp sell-off in the US dollar due to tariff tensions and concerns about another recession. GBP/USD traded close to a four-month high in the European trading session on Tuesday, trading around 1.2940. GBP/USD is firm as the US dollar index continues to slide, approaching 103.30 ahead of the release of US Consumer Price Index data, which will be released on Wednesday. GBP/USD recovered during Tuesday's Asian session, trading around 1.2885, recovering recent losses from the previous session. The dollar is under pressure due to concerns that tariff policy uncertainty could push the US economy into a recession. GBP/USD strengthened after BoE Monetary Policy Committee member Catherine Mann, in her speech last week, dismissed the need for "gradual and cautious" monetary easing amid rising global economic volatility.

The daily chart shows that GBP/USD expanded above the 1.2900 mark again on the second day, reaching a high of 1.2966, the last trading level in early November last year. The exchange rate movement suggests that the currency pair is expected to continue to rise. However, the technical indicator 14-day relative strength index (RSI) shows that the currency pair is already overbought at around 70.20. The technical rebound of the US dollar may push GBP/USD to challenge 1.2815 (8-day simple moving average), and 1.2800 (market psychological level), and further challenge the 200-day simple moving average of 1.2788. As for the upside, the first focus is on 1.2966 (five-month high). If GBP/USD breaks through 1.2966, it is expected to test the market-recognized psychological level of 1.3000.

Today, it is recommended to go long on GBP before 1.2932, stop loss: 1.2920, target: 1.2975, 1.2985

USD/JPY

USD/JPY rose sharply to around 148.00 as Japan is unlikely to avoid US tariffs. The expected growth in the US JOLTS employment data for January provided temporary support for the US dollar. Both the US headline and core CPI are estimated to have slowed in February. The USD/JPY pair continued the recently established downward trend and fell to its lowest level since early October, around 146.50, in the first half of Tuesday's trading. Concerns about US President Trump's tariffs and potential global trade wars continue to affect investor sentiment. This is evident in the generally weak tone of the stock market, which together with the hawkish expectations of the Bank of Japan have supported the safe-haven yen. Apart from this, the overall bearish sentiment surrounding the US dollar has further exerted downward pressure on the pair. Traders now seem convinced that the Bank of Japan will raise interest rates once again given rising inflation in Japan and expectations that last year's sharp wage hikes will continue into this year. In fact, Bank of Japan Deputy Governor Shinichi Uchida hinted last week that the central bank may raise interest rates at a pace consistent with the mainstream view of market participants and economists. Apart from this, the prevailing US dollar selling bias, driven by bets that the Federal Reserve will cut interest rates multiple times this year, has exerted downward pressure on the USD/JPY pair.

From a technical perspective, the 14-day relative strength index (RSI) on the daily chart is close to breaking out of the oversold territory (latest at 30.50), which calls for some caution for bearish traders. Therefore, it would be wise to wait for a short-term consolidation or a modest rebound for the continuation of the two-month downtrend. However, any attempt to break through the immediate resistance of 147.25-147.30 is likely to attract new sellers before 147.82 (5-day moving average), and 148.00 (round mark). Next up is the strong horizontal support of 148.60-148.70, now turned into resistance, which should become a key turning point and limit the upside of USD/JPY. On the other hand, the lows of the Asian trading session in the 146.55-146.50 area may provide some support, and if it falls below this level, USD/JPY may accelerate its decline to 146.00. The downward trajectory may extend further to the intermediate support of 145.25, and finally point to the psychological level of 145.00.

Today, it is recommended to short the US dollar before 147.95, stop loss: 148.20; target: 147.10, 147.00

EUR/USD

EUR/USD rose for the third day in a row, this time reaching a five-month high, well above 1.0900 to a five-month high of 1.0947, helped by hopes of a deal on Germany's spending plans and further weakness around the dollar. Germany's future chancellor, Friedrich Metz, is facing obstacles in his plans to push constitutional reforms to implement a debt brake before the new parliament takes office on March 25. The euro fell after the headlines, but quickly rebounded to above 1.09, its highest since November last year, when reports emerged that the Greens were still willing to negotiate and Christian Democratic Union (CDU) officials were optimistic about reaching a deal. The foreign exchange market continues to price in a best-case scenario for the euro, where the spending plans will continue to move forward. The eurozone calendar is light this week, so developments in German politics and Ukraine-Russia peace talks will remain quite important. However, EUR/USD will still be mainly affected by news from the United States. The US-Ukraine Saudi talks have raised hopes for an end to the Russian-Ukrainian war, and in the future, Ukraine's territorial issues, differences in the international community, and the game between the United States and Russia will continue to affect the peace process. Whether the talks will bring an end to the conflict remains to be seen.

Technical analysis of the daily chart shows that EUR/USD has broken below the ascending channel pattern, suggesting a shift in momentum from buyers to sellers, a bearish breakout. Moreover, the 14-day relative strength index (RSI), a key momentum indicator, is slightly above 70 (highest at 74.30), suggesting that EUR/USD is overbought and could see a downside correction. However, the pair remains above its 9-day and 14-day moving averages, reinforcing strong short-term momentum. A successful return to last week’s high of 1.0888 could strengthen the bullish bias and support EUR/USD to explore 1.0960, and 1.1000 (market psychological levels). On the downside, EUR/USD could find major support at the 1.0800 (psychological level), followed by the 200-day simple moving average at 1.0721. A break below this level would weaken short-term price momentum and exert downward pressure on the pair, causing it to hover around the 1.0700 level.

Today, it is recommended to go long on Euro before 1.0900, stop loss: 1.0885, target: 1.0950, 1.0960.

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