Currency Market Technical Observation: The US Dollar, Gold, and Crypto Assets Under the Shift in Federal Reserve Policy

Market Background: Liquidity Release Triggers Asset Revaluation

The Federal Reserve recently announced the termination of its quantitative tightening plan and introduced the Reserve Management Purchase Program (RMP), committing to purchase $40 billion in short-term government bonds over the next month. Although this move nominally differs from traditional quantitative easing policies, its actual effect is no different from injecting new liquidity into the financial system. The global bond markets have responded—U.S. and many other countries’ long-term bond yields have risen, and global inflation expectations are gradually warming. Against this macro backdrop, various assets are facing re-pricing.

US Dollar Index: The Bull-Bear Boundary Emerges

The US Dollar Index closed down 0.3% on Thursday (December 11), with a daily low of 98.13. Since November 21, the USD Index has been weakening continuously, with a series of lows confirming the downward momentum. The 97.9 level has become a market focus.

If the USD Index can hold above 98.0, it may maintain broad oscillations in the short term, with the possibility of rebounding toward the 100 mark. Conversely, if increased liquidity in the gold market causes the USD Index to fall below 97.9, downside space will further expand, with attention needed on support levels at 97.6 and even 95.2.

Key Support and Resistance Levels: Support at 97.9, 97.6, 95.2; Resistance at 99.0, 99.5, 100.0

AUD/USD: Strong Bullish Signal

AUD/USD has only declined three times in the past fifteen trading days, reflecting strong bullish momentum. The exchange rate has stabilized at around 0.6600, with an upward tilt in technical patterns.

If 0.6600 can be maintained, subsequent rebounds may challenge 0.6700 and even 0.6800. If broken, watch out for pullbacks to 0.6520 and even 0.6450.

Key Levels: Support at 0.6600, 0.6520, 0.6450; Resistance at 0.6700, 0.6750, 0.6800

Gold: Upward Momentum Still Present

Gold rose 1.22% on Thursday, reaching a high of $4,285.9, hitting a near two-week high. The price broke through the upper boundary of the 3890-4225 historical range, with the AO momentum indicator showing bullish signals, indicating a potential challenge to the previous high of $4,381.

The daily candlestick chart shows that if gold stabilizes above $4,200, the rebound could target the previous high at $4,381. If it falls below $4,200, caution is needed for a retracement toward support around $3,900.

Levels: Support at 4200, 4130, 4050; Resistance at 4300, 4381, 4440

ETH: Critical Timing Window for Directional Shift

ETH declined 2.64% on Thursday, with the lowest price reaching $3,145.5. More importantly, the coin has again fallen below the $3,000 mark and reached a critical timing point, suggesting the market’s directional choice is imminent.

If ETH cannot rebound and recover above $3,400 in the short term, the risk of a correction toward the $3,000 level increases. Traders may view $3,400 as a short-term pivot point for bullish and bearish decisions.

Support and Resistance Levels: Support at 3200, 3000, 2675; Resistance at 3300, 3400, 3600

Summary

The liquidity expectations driven by the Fed’s policy adjustments are prompting deep adjustments in global financial markets. The USD Index, AUD/USD, gold, and ETH are all hovering around key support and resistance levels. Traders should closely monitor these critical points to determine subsequent position directions.