Dollar index
As measured by the U.S. Dollar Index, the greenback showed no signs of recovery, falling to around 100.92 during Wednesday's trading session. This is due to strong dovish bets on the Federal Reserve (Fed) and U.S. Treasury yields continuing to struggle. Additionally, minutes from the July Federal Open Market Committee (FOMC) meeting showed that most participants were open to a rate cut in September. The U.S. dollar, benchmarked against the U.S. Dollar Index, hit a seven-month low, in line with falling Treasury yields and strongly dovish bets on the Federal Reserve. The U.S. dollar index extended its decline and is close to its year-to-date low near 101.30. Federal Reserve Governor Michelle Bowman said on Tuesday she was cautious about any policy changes because she believed there were still upward risks to inflation. She warned that taking too much action on any one economic data could jeopardize the progress that has been made.
Despite the continued efforts of buyers, the technical outlook for the U.S. Dollar Index shows a more clearly bearish trend. The index ended the consolidation phase in the range of 101.87-102.87, while the former was 87.6% and the latter was 61.8% from 100.61 to 106.51 Fibonacci retracement level}, which may add fuel to the fire for the bears and push the US dollar index towards 101.00 {market psychological barrier}, and 101.61 {low on December 28 last year}. The momentum-oriented 14-day relative strength index (RSI) took a beating, slipping into oversold conditions, while the moving average convergence divergence (MACD) showed increasing red bars. This firmly demonstrates that bearish dominance on the US Dollar Index is firmly entrenched. On the other hand, the upward resistance can be considered at 101.87 {78.6% Fibonacci retracement level from 100.61 to 106.51}, and if the level is broken, it will test 102.87 {61.8% Fibonacci retracement level}, and 102.70 {10-day moving average} resistance. level.
Today you can consider shorting the US dollar index near 101.35, stop loss: 101.45, target: 101.00, 100.95
WTI spot crude oil
Oil trading traded sideways on Wednesday after three sessions of sharp selling after several news outlets reported that an oil tanker had been hit by Houthi rebels in the Red Sea. Delta Tankers has confirmed that one of its vessels, Sounion, was attacked and suffered minor damage. The trend was mildly bearish and still within striking distance of the two-week low hit the day before. Israeli Prime Minister Benjamin Netanyahu has accepted a proposal to resolve differences that have blocked a ceasefire in Gaza, easing concerns about disruptions to Middle East crude supplies. In addition, the unexpected increase in U.S. crude oil inventories continues to have an adverse impact on crude oil prices. Meanwhile, investors remain concerned about the ongoing conflict between Israel and Hamas despite ongoing ceasefire talks. Beyond that, as more investors believe the Federal Reserve will initiate a rate-cutting cycle in September, the dollar's overall downward bias could bring some support to crude oil prices and help limit further losses. Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole symposium on Friday should provide clues about the path of the U.S. central bank's policy. This will therefore push the dollar stronger and provide new impetus to crude oil prices.
As seen on the daily chart, the 14-day relative strength index (RSI), a technical indicator, continues to fall from 40.00, and the MACD indicator has just broken below the signal line, indicating that oil prices will continue to have adjustment pressure. The lower support is expected to be $72.62 {low on June 4}, and $73.48 {low on the 2nd of this month}. , support will then refer to the 71.67 level, the low seen earlier this month. The key medium-term support will refer to $70.00 {market psychological mark}. As for the upper resistance level, the first target is estimated to be $75.08 {23.6% Fibonacci rebound level from 84.73 to 72.10}, and the next level will point to $76.92 {38.2% Fibonacci rebound level} and $77.04 { 9-day moving average} mark. While important key resistance is the 200-day simple moving average at the $78.10 level.
Today you can consider going long crude oil near 73.00, stop loss: 72.80; target: 74.30; 74.50
Spot gold
Gold prices retreated from all-time highs above $2,530 and tested $2,500 during Wednesday's U.S. trading session. Ahead of the FOMC minutes, the benchmark 10-year U.S. Treasury yield held steady near 3.8%, leaving gold struggling to maintain its bullish momentum. In mid-week, gold prices climbed to a record high near $2,531-2,532 as more investors believed that the Federal Reserve would soon start an easing policy cycle. Currently, the market believes that the probability of the Federal Reserve cutting interest rates by 25 basis points in September is relatively high, which in turn stimulates market demand for gold, a zero-yielding asset. Nonetheless, the market's latest optimism that tensions in the Middle East are easing have restrained further gains in gold prices. Bulls appear to be less active, preferring to wait for Federal Reserve Chairman Jerome Powell to attend the Jackson Hole symposium on Friday. This, along with the minutes from the July Fed meeting, will provide clues about the path of Fed policy, which in turn will play a key role in driving demand for the dollar in the near term and provide some clear boost to gold prices.
From a technical perspective, before the end of last week, gold prices broke through the triple tops, namely: 2,483.70{17/7}; 2,479{2/8} US dollars), and the resistance area formed by 2,480 US dollars (14/8} US dollars. And then broke through 2,500 US dollars The strength of the psychological barrier is seen as a new trigger for bullish traders. Additionally, the daily oscillators are holding within positive territory and have yet to enter overbought territory, thus suggesting that there is minimal resistance to the upside. This will help gold move above the resistance breakout level of $2,531.80 (Tuesday's high). Some follow-through buying later may support gold prices to climb directly towards the $2,548.90 (150.0% Fibonacci rebound level) level. The price is initially at US$2,500 {market psychological mark}, and then falls to US$2485.70 {this Monday's low} area. If it falls below the latter, gold prices will fall to around US$2,474.20, the 10-day simple moving average, which provides dynamic support.
Today you can consider going long gold before 2,508.00, stop loss: 2,505.00; target: 2,525.00; 2,530.00
AUD/USD
Further losses in the U.S. dollar have provided additional support to the Australian dollar's already strong rebound, with AUD/USD rising to fresh multi-week highs around 0.6760 ahead of Thursday's key PMI releases. The Australian dollar strengthened against the U.S. dollar midweek, looking to extend its gains. AUD/USD strength strengthened after minutes from the Reserve Bank of Australia's (RBA) August meeting suggested the cash rate may remain unchanged for an extended period. The minutes of the RBA meeting also showed that the board considered raising interest rates earlier this month, but ultimately decided that maintaining the current interest rates would better balance risks. In addition, RBA members unanimously believe that a rate cut is unlikely in the near future. The dollar sought to break its losing streak as traders turned cautious following the release of minutes from the Federal Reserve meeting on Wednesday. In addition, traders are also awaiting a speech by Federal Reserve Chairman Jerome Powell at Jackson Hole on Friday.
Technically, the Australian dollar was trading around 0.6750 midweek. AUD/USD remains strong above the 0.6700 {psychological threshold}, and 0.6701 {78.6% Fibonacci bounce from 0.6798 to 0.6347} areas, reinforcing the bullish bias. Additionally, the 14-day Relative Strength Index (RSI), a technical indicator, is just below 67, supporting continued bullish momentum. Therefore, the upward resistance can be focused on the 7-month high of 0.6798 hit in July, and if it breaks, it can look to the 0.6840 {highest price this year} level. However, further upside in AUD/USD could indicate that the pair is overbought, potentially leading to a consolidation. If below 0.6700 {AUD/USD is likely to test the support level at 0.6575, followed by the next support level at 0.6700 (the psychological barrier}, with the next level pointing towards the 0.6643 key support level at the 50-day moving average.
Today you can consider going long Australian dollar before 0.6728, stop loss: 0.6710; target: 0.6770; 0.6775.
GBP/USD
An apparent sell-off in the US dollar helped sterling and other risk-related assets gain further on Wednesday, with GBP/USD trading above 1.3100 for the first time since the summer of 2023. GBP/USD rallied again mid-week, hitting a fresh 13-month high of 1.31200, closing in the green for a third day in a row as the pound received a boost from dollar weakness. Sentiment remained elevated ahead of key business activity surveys and the upcoming Jackson Hole Economic Symposium. Results of the U.S. Purchasing Managers Index (PMI) business activity survey will be released on Thursday, and the annual Jackson Hole symposium kicks off this weekend. The U.S. S&P Global Manufacturing Purchasing Managers' Index (PMI) is expected to remain stable at 49.6 in August, while the Services Purchasing Managers' Index (PMI) will fall 1.0 to 54.0 from 55.0. The opening of the Jackson Hole symposium is expected to attract a lot of investor attention on Thursday, but a speech by Federal Reserve Chairman Jerome Powell on Friday is expected to set the overall tone for market sentiment next week.
GBP/USD continues to move higher on the daily chart, with prices hitting a fresh 13-month high just above 1.3050 on Tuesday. In the past nine consecutive trading days, the currency pair has closed higher in all but one trading day {August 14th). However, if the bulls are unable to move further beyond current levels, a "double top" could form on the daily chart {1.3045 on 17/7; and 1.3050 on Tuesday}, creating a short pressure trap and if GBP/USD continues If it rises, it will encounter the latest technical resistance of 1.3125 {high on July 17 last year}, and 1.3200 {integer mark}. As for the support area, you can consider 1.2974 {Tuesday's low}. If the level is broken, it will point to the 8-day moving average of 1.2908. and levels near 1.2900 {market psychological barrier}.
Today it is recommended to go long GBP before 1.3075, stop loss: 1.3060, target: 1.3140, 1.3150
USD/JPY
USD/JPY was trading around 145.50 in early trading on Wednesday, maintaining a rebound from a two-week low of 144.95. The pair has recovered after Japan's merchandise trade deficit exceeded expectations, which has weighed on the yen despite risk aversion. The minutes of the Federal Reserve meeting are being watched. A weak U.S. dollar and expectations of a dovish speech by Federal Reserve Chairman Jerome Powell at Jackson Hole weighed on USD/JPY. Investors are confident that the Federal Reserve will cut interest rates this year, with the Fed expected to cut interest rates three times by 25 basis points each time in September, November and December. This has therefore put some selling pressure on the US dollar. Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole symposium on Friday will take center stage. In terms of the yen, improvement in Japan's gross domestic product (GDP) in the second quarter may prompt the Bank of Japan to raise interest rates this year, thus boosting the yen. Japan's economy grew 0.8% in the second quarter, compared with expectations for 0.5%. Traders will get further signals from Japan's July national consumer price index (CPI) due on Friday.
From a near-term technical perspective, USD/JPY is trading around 145.20. The pair is just below the 9-day exponential moving average (146.88), and 146.42 {23.6% Fibonacci bounce level from 161.80 to 141.68}, indicating a short-term bearish trend. Additionally, the 14-day relative strength index (RSI), a technical indicator, is just above 30 points, indicating that a pullback is possible. In terms of support, USD/JPY is likely to test the seven-month low of 143.61 hit on August 6. A breakout points to a seven-month low of 141.69 reached on August 5. On the upside, the USD/JPY pair is likely to encounter immediate resistance at the 9-day exponential moving average near the 146.88 level, followed by the 20-day EMA at 148.22.
Today it is recommended to short the US dollar before 145.50, stop loss: 145.70; target: 144.50, 144.40
EUR/USD
While the dollar's decline accelerated, EUR/USD managed to climb further and reach new 2024 highs in the 1.1170-1.1175 range as investors became more convinced that the Federal Reserve may start cutting interest rates at its September meeting. Further weakness in the US dollar allowed EUR/USD to extend its ongoing gains and break above the 1.1100 mark. EUR/USD extended its gains for a third consecutive day on the back of continued US dollar weakness, hitting a new 2024 high near 1.1175. The U.S. dollar accelerated its pullback and fell below the key 102.00 support level to hit fresh multi-month lows as investors continued to believe the Federal Reserve would begin an easing cycle in September. After the release of the inflation data, market expectations for a 50 basis point rate cut by the Federal Reserve next month have weakened, and it is appropriate to consider the possibility of a rate cut by the Fed in September, citing the increasing possibility of a weakening labor market. If the Fed chooses to launch deeper interest rate cuts, the policy gap between the Fed and the European Central Bank may narrow in the medium to long term, which may support further gains in EUR/USD,
In terms of recent technical trends, after further gains in EUR/USD, the 14-day relative strength index (RSI), a technical indicator, rose to 73.00, which is at a positive level, reflecting the strength of US dollar buyers. A test of the December 2023 top at 1.1200 (round number barrier) is likely. After breaking this level, the pair will head towards 1.1275 (last July 17 high). On the downside, EUR/USD's next target is 1.1070 {Tuesday's low}, followed by 1.1000 {round number} which forms an immediate support level.
Today it is recommended to go long USD before 1.1135, stop loss: 1.1120, target: 1.1180, 1.1190
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