US Dollar Index

The US dollar index rose slightly on Tuesday, approaching the 99.00 level, after recovering somewhat amid stable market sentiment despite disappointing economic data and escalating trade tensions. Data on Monday showed that US manufacturing activity contracted more than expected in May, reflecting the headwinds of continued trade uncertainty under the Trump administration. Trump's threat to double steel import tariffs to 50% has triggered harsh criticism from major trading partners, exacerbating trade concerns. Tensions with China have also escalated, with Beijing rejecting Trump's claims that it has violated the interim trade agreement and promising retaliatory measures to defend its interests. Despite these headwinds, the dollar has strengthened, especially against the yen, Australian dollar and euro.

From the daily chart, the current trend of the US dollar index is temporarily suppressed by the moving average system. The US dollar index continues to run below all key moving averages (9-day: 32/100-day: 103.54/200-day 104.14), showing a standard short arrangement. The current price of 98.85 deviates from the 200-day moving average by 5.0%, indicating that the medium- and long-term trend is still dominated by sellers. The 14-day relative strength index (RSI) of the technical indicator is close to the 40 level, which has shifted the focus to the bearish trend, while the MACD indicator strengthens the downward signal. This pattern conforms to the characteristics of "accelerated downward momentum" and forms a technical resonance with the test demand of the April low of 97.92. If it falls below 98.60 {early week low}, it will verify the following technical logic: the daily level descending channel continues, and the April 22 low of 98.15 becomes the next short target. It will eventually test below the previous low of 97.91. As for the bullish situation, if it holds 98.60 {early week low} and recovers 99.00 {integer mark}, and 99.66 (May opening price), it may trigger short covering and rebound to 100 {market psychological mark} level.

Today, consider shorting the US dollar index around 99.40, stop loss: 99.50, target: 98.90, 98.80

WTI spot crude oil

Oil prices fell in early European trading on Tuesday, with US oil trading above $62 per barrel. Oil prices climbed nearly 4% on Monday. Although the oil-producing group OPEC+ insisted on its production increase plan, wildfires burning in Canada's oil-producing provinces threatened supply, and President Trump's new tariff threats put pressure on the US dollar, and there was still a high degree of uncertainty in the US-Iran negotiations. In addition, the US dollar fell across the board on Monday due to concerns that Trump's new tariff threats could hurt economic growth and stimulate inflation, which also supported oil prices. The rise in geopolitical risk premiums after the Ukrainian drone attack on Russia over the weekend also provided support for oil prices. At the same time, the mixed signals sent by Iran's negotiations with the United States made market participants uneasy. Iran is ready to reject a US proposal to end the decades-long nuclear dispute, an Iranian diplomat said on Monday, calling the proposal "not viable" as it neither meets Iran's interests nor softens Washington's stance on uranium enrichment.

From a technical perspective, WTI is showing early signs of bullish momentum but has yet to see a decisive breakout. It is attempting to break out of the consolidation range that has restricted price action since mid-May. After failing to break above the psychological $60 support on multiple occasions, the price rebounded sharply and bulls are currently testing $63.88 {70-day simple moving average}, and $64.04 {May 21 high}. The short-term structure is biased towards the positive side, although a clear break above the 89-day SMA at $65.55 remains crucial for further gains. On the other hand, a rejection at $63.25 {Monday's high} could trigger profit-taking by short-term traders and reinforce a broader consolidation pattern that drags the price back to $61.31 {9-day simple moving average}, and then towards the $60.00 psychological support zone.

Consider going long on crude oil near 62.60 today, stop loss: 62.40; target: 63.80; 64.00

Spot gold

Gold fell below $3,360 an ounce on Tuesday, but remained close to its highest level in nearly four weeks, supported by strong safe-haven demand. On Monday, gold surged 2.8%, the strongest single-day gain since May 6, as investors reacted to escalating trade and geopolitical tensions. U.S. President Donald Trump's threat to double tariffs on steel and aluminum starting Wednesday further strained relations with trading partners. Meanwhile, Trump claimed that China violated its trade agreement with the United States, further escalating tensions between Washington and Beijing. The market is now expecting President Trump and Chinese President Xi Jinping to confirm at the White House that the two leaders may hold talks later this week. Meanwhile, Russia and Ukraine held a second round of direct peace talks on Monday after a significant escalation in hostilities, but failed to make any progress in ending the conflict.

From the technical trend this week, gold bulls are putting pressure on the key resistance level of $3,399 (Monday high) and $3,400 (round mark). If this level is broken, it will mark the end of the recent correction phase of 3,325 (equilateral triangle upper track)-3,327 (9-day moving average). The 14-day relative strength index (RSI) of the daily chart rebounded above 57 and turned to a comprehensive bullish pattern, which further boosted the short-term outlook for gold prices. The target is $3,439.60 (April 7 high) and is expected to become the focus. Then the previous historical high of $3,500 is expected. Due to the rapid rise this week, a correction trend is expected in the short term, but under the current strong bullish sentiment, the correction may be shallow. The broken triangle upper trendline of 3,325{equilateral triangle upper line}, and 3,327{9-day moving average} turned into initial support, followed by the support of $3,300{May market psychological barrier} area, which should effectively contain the correction and maintain the integrity of the new long position.

Today, you can consider going long on gold before 3,350, stop loss: 3,345; target: 3,375; 3,380

AUD/USD

The Australian dollar weakened to around $0.650 on Tuesday, reversing the sharp rise in the previous trading day after the Reserve Bank of Australia revealed that it had considered an over-the-top rate cut last month. At the May policy meeting, the central bank hinted that policymakers had considered a bold 50 basis point rate cut as an "insurance" against the growing global trade risks, but ultimately chose a more cautious 25 basis point rate cut. Nonetheless, the market is now pricing in about a 70% chance of another rate cut at the next RBA board meeting, although many analysts expect the central bank to wait for Q2 inflation data before taking further action. On the domestic front, data showed that Australia's current account deficit narrowed to A$14.7 billion in the first quarter of 2025 from a revised A$16.3 billion in the fourth quarter of 2024, although it was larger than the market's expectations of a A$12 billion deficit. On the external front, the Australian dollar is also under pressure from a rebound in the US dollar despite mixed economic data and rising trade tensions.

The Australian dollar surged 1.0% against the US dollar at the beginning of the week, hitting a high of $0.6500, and although it subsequently fell back slightly to around $0.6480, it still stood firmly above the 200-day simple moving average of 0.6438. This key moving average has been the focus of the Australian dollar's long and short battles many times in the past month. If it can continue to hold, it may mean that the Australian dollar has entered a new upward channel. The Australian dollar has risen by 0.5% in May. If it can further break through the psychological level of 0.65 US dollars this week, it may attract more technical buying and push the currency pair further up to 0.6537 {high on May 26}, then 0.6587 {high last November}, and the 0.6600 area level of the round mark. However, if global stock markets fall due to worsening trade tensions, the Australian dollar's rise may face challenges. Therefore, the downward trend should focus on the 200-day simple moving average of 0.6438, and a break will point to the 0.6400 {round mark} level.

Today, we suggest going long on AUD before 0.6450, stop loss: 0.6440, target: 0.6500, 0.6510

GBP/USD

GBP/USD attracted some selling during the Tuesday session, giving back some of the gains from the strong overnight rally to the 1.3560 area, or multi-day high, to the 1.3515 area, or a new daily low. Despite the dollar's modest rise, the fundamental backdrop remains cautious for bearish traders. The U.S. dollar index, which tracks the performance of the greenback against a basket of currencies, rebounded from the six-week low hit on Monday and became a key factor exerting downward pressure on GBP/USD. However, any significant dollar appreciation seems elusive against the backdrop of growing acceptance that the Federal Reserve will further reduce borrowing costs this year. In addition, concerns about the deteriorating fiscal situation in the United States and the re-heating of U.S.-China trade tensions should limit the dollar's upside. On the other hand, the pound is likely to continue to be supported by market expectations that the Bank of England will pause its rate hikes at its next meeting on June 18 and adopt a cautious approach before further rate cuts. This could further help limit losses in GBP/USD.

The daily chart shows that GBP/USD continues to hold firm on the bullish side despite a short-term pullback. Bids have moved beyond the rising trendline and the short-term 20-day simple moving average of 1.3391, and the pair still has momentum to trade above the 14-day simple moving average of 1.3448. The pair rose again on Monday, while the technical indicator 14-day relative strength index (RSI) indicator remained above 60, reflecting a bullish bias in the short term. If GBP/USD can hold above 1.3500 to close, bids are only a step away from new highs near 1.3593 {May 26 high}, and 1.3600 {market psychological barrier}. Looking down, support may be at 1.3500 (round mark), and a break below will test the 14-day simple moving average of 1.3448, and the round mark of 1.3400 respectively.

Today's recommendation is to go long GBP before 1.3505, stop loss: 1.3500, target: 1.3560, 1.3570

USD/JPY

The yen weakened to below 143 yen per dollar on Tuesday, breaking a three-day rally, even though Bank of Japan Governor Kazuo Ueda said he was willing to raise interest rates if economic and price momentum strengthens. Ueda stressed that despite some weaknesses, Japan's economy is gradually recovering, supported by solid business confidence and improving corporate profits. As the dollar rebounded, the yen also came under external pressure, with the market mostly shrugging off weak US economic data and a rebound in global trade tensions. President Trump's recent threat to double steel and aluminum import tariffs to 50% - effective June 4 - has added concerns, especially to Japan's steel industry. Investors are now looking forward to labor market and household spending data due later this week for further insights into the state of the Japanese economy.

From a technical perspective, the overnight break below the 143.65-143.60 horizontal support (coinciding with the 100 hourly simple moving average) is seen as a key trigger for USD/JPY bears. This area should now limit any further intraday gains. However, a sustained strong breakout could trigger a short-term covering rally that could push the pair towards the 144.00 level. Nonetheless, the momentum could extend further but it could face the risk of fading around the 144.40-144.45 resistance zone.

On the other hand, a pullback below 143.00 could find some support near the Asian session lows, around the 142.40-142.35 area. Next up is the 142.10 area, or last week’s swing low, below which the USD/JPY pair could resume its recent decline since the monthly swing high in May. Spot prices could weaken further towards the next relevant support around 141.60 and eventually below 141.00.

Today's recommendation is to short the US dollar before 144.20, stop loss: 144.40; target: 143.10, 143.00

EUR/USD

The euro fell below $1.1400 against the US dollar, pressured by softer-than-expected inflation data, a downgrade of the global growth outlook by the Organization for Economic Cooperation and Development (OECD), and rising political uncertainty in the Netherlands. The annual growth rate of the eurozone consumer price index (CPI) was 1.9% in May, lower than the forecast of 2.0%, reinforcing market expectations that the European Central Bank will cut interest rates by 25 basis points later this week - which is likely to be the last rate cut before the easing cycle pauses. In the Netherlands, political instability worsened after the government collapsed over a dispute over immigration policy, causing far-right leader Geert Wilders to withdraw his party from the ruling coalition. Trade policy uncertainty remains a focus, with reports that the United States has asked for a final offer in the ongoing negotiations by Wednesday - just days after former President Trump threatened to double steel and aluminum tariffs.

Observing from the daily chart, EUR/USD hit a six-week high of 1.1450 at the beginning of the week, but failed to consolidate above the resistance area of ​​1.1440 to 1.1450, which has been supporting bulls since mid-April. However, the pair still maintains its positive trend as the general weakness of the US dollar has temporarily suppressed the bears. The immediate resistance is now at the inverse trend line of 1.1440–1.1450, which blocks the path to 1.1500{round mark}, and the April 22 high of 1.1545. On the contrary, if the closing fails to hold above 1.1400, it may bring the opening price of 1.1348 at the beginning of the week and the low of 1.1310 on May 30 back into focus.

Today, it is recommended to go long on EUR before 1.1360, stop loss: 1.1350 target: 1.1420, 1.1430

Disclaimer: The information contained herein (1) is proprietary to BCR and/or its content providers; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely; and, (4) does not constitute advice or a recommendation by BCR or its content providers in respect of the investment in financial instruments. Neither BCR or its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.