US Dollar Index

On Wednesday, the US Dollar Index (DXY) rose by as much as 0.7%, reaching 102.88—its highest level since April 2025. The latest inflation data reinforced market expectations for further monetary tightening by the Federal Reserve. The Consumer Price Index (CPI) for September climbed 0.6% month-on-month, marking the largest increase in five months, while the year-on-year inflation rate rose to 3.7%—surpassing the market forecast of 3.6%. Furthermore, the core CPI increased by 0.3% month-on-month and 2.6% year-on-year, fueling concerns that elevated energy costs continue to exert upward pressure on prices. Consequently, the market-implied probability of another Federal Reserve rate hike later this month jumped to approximately 50%, up from 22.1% the previous day. Nevertheless, despite persistent inflation, Federal Reserve Governor Bowman stated that, following last month’s rate hike, she does not see an immediate need for further increases. Meanwhile, escalating hostilities between Saudi Arabia and the Iran-backed Houthi rebels have deepened concerns regarding potential supply disruptions in the Middle East, driving oil prices higher.

From a technical perspective, the pullback in the US Dollar Index over the past week can be characterized as a technical correction within a strong, overarching uptrend; the medium-term bullish structure remains intact. The index continues to trade steadily above both the 20-day and 100-day simple moving averages. The 14-day Relative Strength Index (RSI) stands at approximately 64.47—situated in positive territory without reaching overbought levels—suggesting that buying momentum remains dominant and there is still room for further gains before the trend becomes overextended. The MACD indicator shows a waning, yet still positive, upward momentum. Regarding overhead resistance, the 102.61 level (last week’s high) serves as the immediate ceiling; repeated failed attempts to break through this level have resulted in an accumulation of profit-taking sell orders. Should buying pressure intensify and lead to a decisive breakout above this zone, the pair could potentially challenge the 103.00 psychological level. On the downside, the 14-day moving average at 101.90 serves as the first line of defense—a level that previously acted as resistance before turning into support following a breakout. Further down, the 20-day moving average, located near 100.52, acts as a key threshold for determining medium-term trend strength.

For today, one might consider shorting the US Dollar Index (DXY) at 102.65, with a stop-loss at 102.75 and targets at 102.10 and 102.15.

AUD/USD

On Wednesday, the Australian Dollar (AUD) climbed toward the $0.70 level—its highest point in over two weeks—bolstered by hawkish signals from the Reserve Bank of Australia (RBA) and a broad weakening of the US Dollar. Minutes from the RBA’s latest meeting highlighted persistent cost-of-living pressures and the ongoing risk of further price increases, leaving the door open for additional interest rate hikes. The market currently assigns a 28% probability to an RBA rate hike at the November 3rd meeting, with the likelihood rising to approximately 50% for a hike in December. Investors are now looking ahead to Thursday’s employment data, which is expected to show the addition of 20,000 jobs—a decline from the 39,500 jobs added in August—while the unemployment rate is projected to remain steady at 4.6%. Also in focus is the third-quarter Consumer Price Index (CPI), due later this month; core inflation risks remain elevated, sitting above the RBA’s target range of 2% to 3%. Meanwhile, the US Federal Reserve has signaled only one more rate hike for this year and no further tightening for 2027, which has weighed on the US Dollar and provided additional support for the AUD.

On the daily chart, the AUD/USD pair is trading near 0.6980, maintaining a bearish short-term bias as the price remains below both the 200-day and 100-day simple moving averages (at 0.7041 and 0.7044, respectively). The 14-day Relative Strength Index (RSI) sits at approximately 46, suggesting that downward pressure persists and the current bearish trend remains relatively strong. Initial resistance lies in the 0.7041–0.7044 range—between the 200-day and 100-day moving averages—followed by resistance at the 0.7079 level and the 50-day simple moving average (SMA) at 0.7085. Further up, a more significant supply zone emerges around the 0.7100 psychological level. On the downside, immediate support is found near the 10-day SMA at 0.6968, with deeper support located at 0.6932 (the low from October 8). Should selling pressure persist, the 0.6900 level marks a further structural support point.

Consider going long on the AUD at 0.6970 today; stop-loss: 0.6960; targets: 0.7020, 0.7030.

GBP/USD

The British pound is hovering near $1.3200, attempting a recovery from recent lows. Investors are weighing several factors, including a pause in the rally of oil prices, persistent inflation concerns, and the prospect that interest rates may remain elevated for a longer period. The International Monetary Fund (IMF) has provided some support to the pound by raising its growth forecast for the UK economy; it now expects the UK economy to grow by 1.3% this year, up from its July projection of 1.0%. Regarding monetary policy, Megan Greene—a hawkish policymaker at the Bank of England—has suggested that stronger-than-expected economic growth and a resilient labor market may necessitate keeping interest rates above the current 3.75% to bring inflation under control. While the market is currently pricing in four rate hikes over the next twelve months, many analysts view this expectation as overly aggressive, noting that several policymakers have already indicated that the current policy rate is above the neutral level. From a technical perspective, the breakout above the 100-period simple moving average (SMA) at 1.3246 on the 4-hour chart supports the potential for further intraday gains. Furthermore, the Moving Average Convergence Divergence (MACD) indicator has turned positive—with the MACD line above the zero axis and the histogram expanding—reinforcing a constructive tone, provided that GBP/USD remains above the support of the 100-period SMA. Meanwhile, the Relative Strength Index (RSI) stands at 60.78, approaching the overbought zone; this suggests strong upward momentum, though it may be slightly overextended. Consequently, any further advance is likely to encounter initial resistance near the 23.6% Fibonacci retracement level at 1.3298, followed by hurdles at the 38.2% retracement level (1.3371) and the 50.0% retracement level (1.3429)—creating a series of ascending resistance levels that could cap further gains. On the downside, the 1.3150 mark and the 1.3180 area (the low from October 1st) provide immediate support. A decisive break below these levels would serve as a fresh trigger for bearish traders, potentially opening the path toward the 1.3100 round-number mark.

For today, one might consider going long on GBP at 1.3180, with a stop-loss at 1.3170 and targets at 1.3220 and 1.3230.

USD/JPY

On Wednesday, the Japanese yen weakened against the US dollar to around 158.30, reversing the gains made in the previous session. This follows reports indicating that the Bank of Japan (BoJ) is reluctant to implement consecutive interest rate hikes this month—a rare move—though it remains open to the possibility of a hike in December. It is reported that the central bank sees little justification for back-to-back rate increases unless there are clear signs of a significant rise in upside inflation risks. Meanwhile, Bank of Japan Governor Kazuo Ueda stated that policymakers would continue to closely monitor bond yields, reiterating that long-term interest rates should be determined by market forces. His remarks suggest a cautious approach to monetary policy as the central bank moves further away from strict yield controls. Rising oil prices have also continued to weigh on the Japanese yen; escalating hostilities involving Saudi Arabia and the Iran-backed Houthi rebels have heightened market concerns regarding potential supply disruptions in the Middle East.

USD/JPY Outlook: Buying Support Remains Amid Short-Term Pullbacks. Although long positions in the US dollar have become somewhat crowded, this alone does not signal an imminent reversal. It remains unclear whether the dollar will embark on a new leg higher that could push the USD/JPY pair to challenge the 160 level once again. Over the past few trading sessions, the pair has hovered just below its 200-day moving average of 158.57, with a notable lack of downward momentum. The bulls have not yet conceded; should the bears lose their grip here, the pair could see a significant rally in the coming days. Undoubtedly, a large volume of stop-loss orders is clustered above the recent highs of 158.75–159.00. Triggering these stops would likely propel the price rapidly toward the 160.00 mark. Intraday support lies near 158.00; based on the upper and lower shadows of the daily candlesticks, the 157.00 level represents an area of ​​high trading activity. Further down, the next support level to watch is 156.38 (the low from September 30).

For today, one might consider shorting the US dollar at 158.50, with a stop-loss at 158.65 and targets at 157.70 and 157.80.

EUR/USD

During Wednesday’s trading session, the EUR/USD pair was quoted near 1.1160. The US dollar has undergone a pullback as the rally in US Treasury yields paused—a trend that persisted ahead of the release of the September Consumer Price Index (CPI) data—thereby attracting buying interest in this major currency pair. The yield on the 10-year US Treasury note has retreated from a multi-decade high of 5.36% to around 5.20%. Meanwhile, the US Dollar Index has pulled back from the year-to-date high of 102.61 reached on Monday. According to the CME FedWatch tool, traders are confident that the Federal Reserve will keep interest rates unchanged at its policy meeting later this month, with expectations pointing toward a rate hike in December. At the same time, fiscal risks stemming from France’s ballooning public debt, combined with a firm market conviction that the European Central Bank (ECB) will hold rates steady this month, may limit the upside potential for the euro. A Reuters survey conducted between October 5 and 8 revealed that 70 out of 73 economists expect the ECB to maintain its deposit rate at 2.50% on October 29.

On the daily chart, EUR/USD is trading at 1.1160, maintaining a short-term bearish bias as the spot price remains below the 20-day simple moving average (SMA) of 1.1311. The pair continues to face pressure from this dynamic resistance level, reinforcing the broader downward tone. The Relative Strength Index (RSI) sits at 32.15—hovering just above the oversold territory—suggesting that selling pressure remains dominant but has not yet been fully exhausted. On the upside, initial resistance is located at 1.1256, near the 14-day SMA. A daily close above this level would help alleviate the current bearish pressure and open the door for a deeper correction toward the 1.1300 psychological mark and the 20-day SMA at 1.1311. On the downside, the low of 1.1153 reached on October 12 serves as immediate support. A decisive break below this level would open the door for the pair to test the 1.1100 mark.
For today, one might consider going long on the EUR at 1.1145, with a stop-loss at 1.1135 and targets at 1.1185 and 1.1190.

WTI Crude Oil

On Wednesday, U.S. WTI crude oil was trading near $94.00 per barrel. Escalating conflict involving the Houthis—highlighted by a missile attack on Saudi Aramco’s headquarters and accusations from Donald Trump that the Houthis are deliberately driving up oil prices—has fueled an upward trend, driven by concerns over the spillover of geopolitical risks. The market is currently navigating two competing narratives: risks to shipping lanes in the Middle East are providing a bullish boost to prices, while expectations for a U.S.-Russia diesel agreement and a potential energy-related ceasefire between Russia and Ukraine are weighing on refining margins for petroleum products. Even if the Middle East conflict persists, the upside for oil prices remains limited as long as crude oil continues to flow normally through the Persian Gulf. Furthermore, with Brent crude having surpassed $100 per barrel, the risk-reward ratio for long positions has deteriorated; traders should also remain wary of potential volatility stemming from U.S. policy interventions. Overall, low inventories, high shipping costs, and a tight balance in the diesel market provide fundamental support for oil prices, with the spread between futures and spot prices continuing to price in the "tail risk" of a disruption in the Strait of Hormuz. Despite recent warnings from various institutions regarding oil prices, the broader, range-bound dynamic remains unchanged: the U.S. is likely to intervene if prices rise too sharply, while Iran may step in if prices fall too far.

Crude oil is currently caught in a tug-of-war between a high "Middle East supply risk premium" and factors such as production increases by OPEC+ alongside weakening demand expectations. In the short term, price action will depend on the progress of restoring shipping through the Strait of Hormuz, the evolution of the geopolitical situation, and shifts in interest rate expectations. Should geopolitical risks continue to escalate, WTI crude oil may test the $100 level. Conversely, if the situation in the Middle East eases, or if CPI data reinforces expectations for higher interest rates—thereby weighing on risk assets—oil prices could retreat toward support below $90. From a technical perspective, WTI maintains a bullish structure on the daily chart; following five consecutive days of gains, it has reclaimed the $93–$94 range. Initial resistance lies between $95.60 and $96.00, aligning with recent highs and a psychological threshold. A breakout above this zone could lead to a short-term test of $96.50–$97.00, with stronger resistance situated at $100.00. On the downside, the first level of support is the $93.00 mark; a decisive break below this could trigger a pullback toward $92.00–$91.70, with more robust support found in the $90.50–$90.00 range.

For today, one might consider going long on crude oil at $93.88, with a stop-loss at $93.74 and targets at $95.50 and $96.00.

Spot Gold

On Wednesday, the price of gold fell below $4,100 per ounce, reaching its lowest level since early August. U.S. inflation data, which came in stronger than anticipated, prompted the market to reassess the Federal Reserve’s interest rate outlook. Driven by rising energy costs, the U.S. inflation rate for September climbed to 3.7% year-on-year—surpassing the 3.6% forecast. The Consumer Price Index (CPI) rose 0.6% month-on-month, marking its largest increase in five months. Core inflation also exceeded expectations, rising 2.6% year-on-year and 0.3% month-on-month. According to data from the London Stock Exchange Group (LSEG), the market now assigns a probability of approximately 50% that the Federal Reserve will keep interest rates unchanged at its October meeting—down from over 78% prior to the release of the report. Meanwhile, the market-implied probability of a Federal Reserve rate hike in December has risen to nearly 99%, up from a previous estimate of 88%. Although recent remarks from the Federal Reserve have offered little indication of another interest rate hike in October, a higher-than-expected core Consumer Price Index (CPI) has brought this possibility back into focus, further weighing on non-yielding gold.

After retreating from a high of $4,696.50 in late August, the price of gold found a floor at an interim low of $4,066 (on October 7). Downward momentum has clearly subsided, and the price has broken above a downward-sloping trendline, interrupting the prevailing short-term bearish trend. The market has since entered a rectangular consolidation phase between the 76.8% Fibonacci retracement level ($4,104.77) and the 61.8% Fibonacci retracement level ($4,231.20). Strong buying interest near $4,100 has established this area as a key short-term support level. Regarding technical indicators, the MACD has formed a "golden cross" below the zero line; however, the small size of the red bars merely signals a weakening of bearish momentum. On a larger timeframe, the market remains dominated by bears, and the upward rebound lacks significant strength. The RSI currently sits at 45.25—having moved out of oversold territory but failing to firmly establish itself above the 50-level neutral mark—indicating a state of equilibrium between bulls and bears. From a short-term trading perspective, the market is expected to remain range-bound between $4,100 and $4,231. A decisive move—supported by increased volume—above the $4,200 psychological level would open further room for a rebound toward the 61.8% Fibonacci retracement level of $4,231. Conversely, a clear daily close below the $4,100 support level would signal the end of this corrective phase, allowing the bears to regain control and potentially push the price back toward the October 7 low of $4,066, or even down to the $4,000 psychological level.

For today, one might consider going long on gold near $4,100, with a stop-loss at $4,095 and targets at $4,150 and $4,160.