ATFX Market Outlook 17th January 2025

ATFX Market Outlook 17th January 2025

Market Shifts: Gold Soars as Stocks Pause and Dollar Declines 

Opinion Today:

U.S. retail sales grew in December, and initial jobless claims indicated a strong labor market. However, U.S. stocks dipped, with the Dow down 0.16%, the S&P 500 down 0.21%, and the Nasdaq down 0.89%, as investors evaluated corporate earnings and economic data for clues on Federal Reserve interest rate cuts. Treasury yields and the U.S. dollar weakened, falling to a low against the yen. Gold prices surged to a one-month high at $2,724.55, driven by declining yields and dovish Fed expectations, while oil prices fell amid easing geopolitical tensions.

Key Focus Today: Eurozone's December CPI Data. On Friday, attention will be on the final Eurozone December CPI, which preliminarily indicated a 2.4% year-on-year increase from 2.2% in November due to rising energy costs. This supports the ECB's gradual interest rate reduction strategy but does not significantly alter its overall policy stance.

Key Data:

10:00 CN GDP YoY Q4 ** 

10:00 CN NBS Press Conference *** 

15:00 UK Retail Sales DEC *** 

18:00 EU CPI YoY Prel DEC *** 

21:30 US Building Permit and Housing Starts DEC **

22:15 US Industrial Production DEC ** 

Key Data and Events Coming Week

The 60th Presidential Inauguration on Monday

NYMEX Crude Oil February Futures Expires on Wednesday

US Initial Jobless Claims on Thursday

BoJ Interest Rate Decision and BoJ Press Conference, 

US Manufacturing & Services PMI and Michigan Consumer Sentiment on Friday

EUR/USD

1.0356/1.0387 Resistance

1.0255/1.0223 Support 

ECB minutes indicated a cautious approach to rate cuts due to muted price pressures, suggesting further easing is likely. Despite this, the euro gained support against the US dollar, closing higher and holding near 1.0260 for two days. It now needs to break through the 10-day moving average resistance to solidify its rebound. Today's focus is on the eurozone's December CPI report.

GBP/USD

1.2338/1.2395 Resistance 

1.2155/1.2100 Support 

The GBP/USD pair experienced fluctuations yesterday, ultimately closing unchanged as the decline in the USD offered some support. A moderate range pattern has persisted this week and is anticipated to continue until new guidance is available. Traders are advised to monitor the range between 1.2200 and the 10-day moving average at 1.2297.

USD/JPY

155.60/155.92 Resistance

154.60/154.29 Support 

The yen has strengthened for two days due to market confidence in a Bank of Japan interest rate hike, pushing the US dollar to a one-month low. The dollar, holding above 155.10 yesterday, faces technical pressure that could make it below 155 and into a lower trading range.

USD/CAD

1.4437/1.4464 Resistance

1.4351/1.4324 Support

The USD/CAD pair saw its first three-day decline since November but rebounded overnight due to a sharp fall in crude oil prices. The pair is above the moving average resistance and may continue trending above 1.4400.

U.S Crude Oil Futures (Feb)

78.87/79.83 Resistance 

76.78/75.85 Support

With a temporary easing of Middle East tensions, crude oil prices have fallen from highs since July to around $79-$80, erasing the previous day's gains. The Gaza ceasefire starting Sunday may push prices lower, potentially testing the 10-day moving average support at $76.50.

Spot Gold

2724/2729 Resistance

2703/2698 Support

Spot Silver

30.94/31.11 Resistance

30.49/30.36 Support 

Boosted by the declining US dollar and bond yields, spot gold rose for three days, surpassing $2,700 and briefly hitting $2,720. This level nearly matches the December 12 high. Breaking through $2,726 is crucial for further gains, but this resistance has appeared twice since last November so that a short-term top could happen again.

US30

43379/43555 Resistance 

42976/42796 Support 

The U.S. stock market declined yesterday. The Dow futures did not extend its three-day winning streak and turned around at the previous high of December 26. This suggests it may test the 43,000 mark during the day due to key technical resistance.

NAS100

21332/21520 Resistance

20913/20723 Support 

Yesterday, NAS100 tested the upper resistance of the 20-day moving average and then reversed direction, returning to seek support at the 10-day moving average. It remains to be seen if it can maintain this level during the day's opening; otherwise, it may face further downward pressure.

BTC (Bitcoin)

102775/104351 Resistance

97584/95981 Support

Bitcoin recently approached the $100,000 mark but saw resistance at $100,866 as traders moved to altcoins. After four days of outflows, Bitcoin ETFs experienced a $755 million inflow, indicating potential accumulation before January 20. Investor confidence has increased due to anticipated crypto-friendly policies from the new administration. Analysts have optimistic projections about Bitcoin's price growth leading up to the inauguration.

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