ATFX Market Outlook 20th March 2025

ATFX Market Outlook 20th March 2025

Fed Holds Steady: Markets Soar as Gold Hits Record High, Eyes on BoE!

Market Highlight

U.S. equities rallied on Wednesday after the Federal Reserve maintained interest rates as anticipated. Fed Chair Jerome Powell emphasised that policymakers would await further clarity on President Trump’s policies and would not act hastily. Officials projected a total rate cut of 0.5 percentage points by the end of the year. The Dow increased by 0.9%, the S&P 500 rose by 1.08%, and the Nasdaq advanced by 1.4%.  

The U.S. Dollar Index recovered most of its intraday losses after the Fed’s decision. EUR/USD declined by 0.3% to 1.0912 after briefly reaching 1.0860 earlier. USD/JPY fell by 0.3% to 148.85, while GBP/USD rose by 0.02% to 1.3003.  

Gold prices surged to a new all-time high following Powell’s remarks and the Fed’s indication to reduce borrowing costs by 0.5 percentage points by year-end. Spot gold increased by 0.4% to $3,047.18 per ounce, reaching a record high of $3,051.99. Oil prices posted modest gains, supported by a decline in U.S. fuel inventories, although the Fed’s decision to hold rates limited the potential for further increases. 

Key OutlookThe Bank of England is poised to announce its interest rate decision today. Following three rate cuts in six months, the central bank is anticipated maintaining rates at their current level to gather more economic and inflation data and assess the impact of previous cuts. Some BoE officials have already advised caution regarding further easing. Should the decision reflect this viewpoint, it may support the recently strengthened British pound.

Key Data and Events Today:

Japan Holiday

15:00 GB Unemployment Rate JAN ** 

15:00 EU GERMANY PPI FEB ** 

16:30 SNB Interest Rate Decision *** 

20:00 BOE Interest Rate Decision ***  

20:30 US Initial Jobless Claims *** 

02:30 NYMEX Crude Oil April Futures Expires **

07:30 JP Core CPI YoY FEB *** (Forecast 2.9%, Previous 3.2%) 

20:30 CA Retail Sales JAN *** (Forecast -0.4%, Previous 2.5%) 

23:00 EU Consumer Confidence Flash MAR ** (Forecast -13, Previous -13.6) 

EURUSD

· Resistance: 1.0947 / 1.0961

· Support: 1.0914 / 1.0899

The EUR/USD fluctuated after the Fed maintained its interest rates, indicating a slower balance sheet runoff starting in April. One Fed member dissented despite rising inflation forecasts and lowered GDP and job outlooks. The pair fell to 1.0862.

GBPUSD

· Resistance: 1.3039 / 1.3049

· Support: 1.2977 / 1.2968

Despite the Fed’s somewhat hawkish tone, a slower balance sheet runoff is considered dovish. GBP/USD could test 1.2968, with further gains likely should expectations for Fed rate cuts rise. However, investors must consider the BoE's interest rate decision and rate path.

USDJPY

· Resistance: 149.10 / 149.50

· Support: 147.82 / 147.41

USD/JPY hovers around 149.10 following the Fed’s cautious tone. Should expectations for rate cuts increase the pair decline towards 147.82. However, if the BoJ continues to adopt a dovish stance, the downside might be restrained. 

US Crude Oil Futures (MAY)

· Resistance: 67.74 / 68.18

· Support: 66.37 / 65.95

Oil prices have rebounded due to renewed tensions in the Middle East and declining fuel inventories in the U.S. WTI has risen above $67 following the EIA data, with support at $66.12 and resistance close to the 20-day moving average at $67.82. 

Spot Gold

· Resistance: 3061 / 3079

· Support: 3032 / 3018

Spot Silver

· Resistance: 34.13 / 34.41

· Support: 33.49 / 33.21

Gold surged past $3,050 to a record high after the Fed maintained interest rates and indicated a slower balance sheet reduction. Despite heightened inflation forecasts, Powell’s cautious tone fuelled easing expectations, thereby supporting gold. The breakout signifies strong bullish momentum, with safe-haven demand likely to endure amid policy uncertainty and geopolitical risks. Unless key support is breached, the bias remains upward.

Dow Futures

· Resistance: 42701 / 43075

· Support: 41496 / 41115

The Fed maintained interest rates and indicated a slower pace of balance sheet reduction, as Powell’s cautious tone alleviated concerns over rate hikes. This improved market sentiment and contributed to a rebound in Dow Futures. Anticipations of future rate cuts may continue to bolster equities, although short-term volatility is likely to persist.

NAS100

· Resistance: 20141 / 20343

· Support: 19496 / 19297

Driven by the Fed’s decision, major tech stocks rallied overnight, causing Nasdaq to open higher and approach the 20,000 mark. However, it encountered resistance near this week’s highs and retraced partially. The key target remains a breakout above the weekly high of approximately 19,940. If it fails to break through, the index may retreat below the 19,500 level.

BTC

· Resistance: 88522 / 90397

· Support: 84706 / 82799

Bitcoin remains supported as the Fed maintains steady rates, bolstering expectations for future easing. Whale wallets have contributed $1.3 billion to BTC over three days, signalling strong institutional interest. Continued accumulation and expectations of easing may sustain Bitcoin’s bullish momentum.

Enjoy trading! The content is for reference only. Please ensure that you understand the risk.

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