ATFX Market Outlook 15th January 2025

ATFX Market Outlook 15th January 2025

Market Watch: US PPI Dip, Signal Shifts in Tonight's CPI

Opinion Today:

December's PPI in the U.S. was lower than expected, signaling a continued decline in inflation. On Tuesday, U.S. stocks were volatile as investors reviewed inflation data and prepared for earnings reports. Dow Futures rose 0.52%, S&P 500 increased 0.11%, while Nasdaq dropped 0.23%.

The U.S. dollar index fell 0.14% to 109.25 points but stayed near a two-year high. The euro gained 0.51% against the dollar to 1.0297, and the pound rose 0.11% to 1.2212.

Gold climbed 0.6% to $2,677.16 per ounce due to hopes for continued Fed rate cuts. Oil prices declined slightly, though new sanctions on Russian exports cushioned losses.

Tonight, the U.S. financial market awaits its first inflation report of the year, with December's annual inflation rate expected to increase to 2.9% from 2.7%. This would be the third consecutive monthly rise, the highest since July, possibly affecting the likelihood of significant Fed rate cuts this year.

Key Data:

15:00 GB CPI & PPI DEC ***

17:00 IEA Monthly Report ***

20:00 OPEC Monthly Report *** 

21:30 US CPI YoY DEC *** 

23:00 FOMC Member Kashkari Speaks *** 

TBD EU German Parliament Vote of Confidence *** 

Tomorrow

21:30 US Weekly Initial Jobless Claims & Retail Sales DEC *** 

EUR/USD

1.0368/1.0399 Resistance

1.0237/1.0205 Support 

EUR/USD jumped over 0.8% due to optimism about a possible French government deal and slower US PPI inflation at 3.3% YoY. Despite the rally, the pair remains bearish, recently falling below 1.0200 to a 265-month low. Wednesday's CPI is expected to rise to 2.9% YoY, still above the Fed's target. Traders are eyeing recovery signs, with 1.0200 possibly acting as support.

GBP/USD

1.2262/1.2296 Resistance 

1.2156/1.2123 Support 

As key US and UK inflation data approaches, GBP/USD consolidates near 1.2200, while UK CPI is forecasted to stay at 2.6% YoY. Despite a recovery to 1.2200, GBP/USD remains in a downward trend, recently reaching a 15-month low and declining nearly 4% in January, which could result in four consecutive months of losses.

USD/JPY

158.35/158.58 Resistance

157.66/157.37 Support 

The USD/JPY pair rose yesterday after four days, bouncing off the 20-day moving average. The 10-day moving average suggests a potential rebound but must exceed 158 to gain momentum, facing resistance above 158.50.

USD/CAD

1.4407/1.4428 Resistance

1.4321/1.4301 Support

USD/CAD is pressured around 1.4350 due to weak US December PPI data. Focus shifts to upcoming US CPI data and Fed speeches. Possible tariff threats and fewer Fed cuts could support USD, while rising crude oil prices, driven by US sanctions on Russian oil, boost CAD as Canada is a major oil exporter.

U.S Crude Oil Futures (Feb)

78.78/79.23 Resistance 

76.84/76.38 Support

The EIA expects an oil surplus by 2025. After a three-day rise, crude oil prices dipped overnight but remained near a four-month high. Bulls aim to keep prices above $78; otherwise, they may fall below $77. Short-term prices will likely stabilize at this level, depending on tonight's U.S. CPI report.

Spot Gold

2687/2692 Resistance

2662/2656 Support

Spot Silver

30.02/30.16 Resistance

29.46/29.32 Support 

The US Producer Price Index (PPI) was lower than expected, leading spot gold to rebound above $2,670 before returning this morning. The market now awaits tonight's US Consumer Price Index (CPI) report, which may temper Federal Reserve rate cuts expectations. Gold needs to maintain the 10-day moving average support at $2,662, with resistance near last week's high of $2,690. A significant CPI drop is necessary for a breakthrough above this range.

US30

42954/43360 Resistance 

42150/41641 Support 

The U.S. stock market opened high but declined overnight as investors shifted to utilities, financials, and materials stocks. The Dow futures have recovered for two days and are currently testing the 10-day moving average resistance. Depending on the outcome of the U.S. inflation report released tonight, it may break through this level and target the next resistance at the 20-day moving average, around 42,794.

NAS100

21013/21228 Resistance

20586/20317 Support 

Technology stocks fell again as the Nasdaq dropped for the fifth straight day, closing near 21,000. The low around 20,500 could offer temporary support. Recovery will depend on tonight’s US inflation data and its impact on interest rates.

BTC (Bitcoin)

99188/100764 Resistance

94377/92393 Support

The dollar's rally stalled as traders awaited a U.S. inflation report. Meanwhile, Bitcoin surged over 5% to $97K due to increased risk appetite. The Fed's hawkish signals on interest rates raised market sensitivity, with a higher CPI potentially pressuring Bitcoin by strengthening the dollar and reducing liquidity.

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