The US Dollar has broken out beyond a key resistance level, suggesting it may be close to establishing a new long-term bullish trend.

1. One of the most interesting assets today is the US Dollar, which has always been and remains the major driver of the entire Forex market. The greenback tends to trend, and we are seeing the start of what might be a new long-term bullish trend. We see the US Dollar Index (DXY) having bottomed out and now breaking above a very key resistance level at 98.60. However, the price action is not strongly bullish, so it may be that markets are waiting for the Federal Reserve to meet next week before making a more decisive move. Another bullish factor is that we seem to be seeing a bottom in US treasury yields. This means that the USD is relatively strong and so some of the best trades right now, even over the short-term, are long USD.
2. In the Forex market, the Australian Dollar has been the strongest major currency since today’s Tokyo open, while the Japanese Yen has been the weakest. The USD/JPY currency pair is in some focus after triggering a long trade entry at most trend-following funds several days ago and is looking bullish as long as it holds up above its support level at ¥152.18.
3. Precious metals remain volatile after the amazing long-term bullish trends in Gold and Silver seemed to “blow off” a few days ago, evidenced by a very sharp drop and a massive surge in volatility, which will have knocked out most trend traders from their long positions in these precious metals. Gold and Silver have gained a bit during today’s Asian session, but I expect ranging price action and high volatility – I doubt we will see fresh record high in precious metals any time soon.
4. Stock markets have been mixed over the Asian session, with some nervousness creeping into markets as traders start to focus on the fact that President Trump’s deadline for the new 100% Chinese tariff is only one week away. However, today’s Asian session has seen major US indices gain a bit, and it is still very much a bull market in stocks. If a US/China deal is announced to the market’s taste, we can expect to the US stock market shoot high and probably go on to trade at new all-time high prices.
5. WTI Crude Oil is gaining quite firmly, rising by more than $1 per barrel yesterday, as the United States imposed sanctions on Russian oil companies Rosneft and Lukoil over the Ukraine war. WTI is trading near a 2-week high above $60.
6. There are no high-impact economic data releases scheduled today, so it might be a relatively quiet day in the markets.