ATFX Market Outlook 5th February 2025

ATFX Market Outlook 5th February 2025

Gold Climbs as the US Dollar Declines and Rising Trade Tensions 

Opinion Today:

U.S. job openings declined in December as the labor market slowed, with the Federal Reserve expected to cut interest rates by June. Major U.S. stock indexes closed higher, boosted by energy stocks and optimism over U.S.-China trade after Trump postponed tariffs on Canada and Mexico. The Dow rose 0.3%, the S&P 500 gained 0.72%, and the Nasdaq climbed 1.35%.

The dollar weakened as Trump's tariff threat seemed more a negotiating tactic; the dollar index fell 0.56%, while the offshore yuan rose 0.23% to 7.287. The euro gained 0.37% to 1.038 against the dollar, and the dollar rose 0.3% against the yen to 154.290.

Gold prices reached and closed a record high amid investor demand for safe-haven assets after China's retaliation to U.S. tariffs. Crude oil prices fluctuated, with U.S. crude closing higher as Trump intensified pressure on Iran to cut its oil exports.

Monitor the Eurozone's PPI growth rate for December today to detect any significant slowdown. This evening, the US January ADP employment figure is projected to rise to 150,000, an increase from the previous figure of 122,000, which will be vital for this week's employment report. Furthermore, pay attention to the US ISM non-manufacturing PMI for January, which is anticipated to remain steady.

Key Data:

16:55 EU GERMANY Services & Composite PMI Final JAN **

17:00 EU Services & Composite PMI Final JAN **

17:30 GB Services & Composite PMI Final JAN ** 

18:00 EU PPI DEC **

21:15 US ADP Employment Change JAN *** 

23:00 US ISM Services PMI JAN *** 

Tomorrow

New Zealand Holiday

18:00 EU Retail Sales DEC ** 

20:00 BoE Interest Rate Decision *** 

21:30 US Initial Jobless Claims *** 

EUR/USD

1.0449/1.0486 Resistance

1.0334/1.0287 Support 

EUR/USD rose 0.8% on Tuesday, ending a six-day losing streak but remaining below 1.0400. The rebound followed reduced concerns over US tariffs after concessions from the Trump administration. Key US data, including the ADP Employment Change and Nonfarm Payrolls, is anticipated to drop significantly. Despite the bounce, EUR/USD remains below the 50-day EMA at 1.0440, with a sideways trend expected between 1.0500 and 1.0300.

GBP/USD

1.2556/1.2589 Resistance

1.2418/1.2385 Support 

GBP/USD rose by over 0.6% to 1.2480, following eased US tariff concerns after President Trump postponed implementation for 30 days. With limited economic data ahead, the pair is capped below 1.2500 by the 50-day EMA. A breakout could reach the 1.2600 level, but a pullback to around 1.2300 is possible as bullish momentum wanes.

USD/JPY

154.29/154.55 Resistance

153.21/152.88 Support

The USD/JPY pair witnessed two declines yesterday, driven by the market's preference for the yen as a safe haven. Following positive economic data from Japan, the rate fell to its lowest point since December 18, breaking through the 153.70 range low. Short positions may continue to exert downward pressure towards 153.

USD/CAD

1.4400/1.4463 Resistance

1.4259/1.4197 Support 

Trump has postponed tariffs, declining the USD/CAD pair from its recent highs. The daily moving average beneath 1.4400 is now a crucial level of resistance. The exchange rate will test whether the January low, close to 1.4260, can serve as support; otherwise, it may dip below 1.4200.

U.S Crude Oil Futures (March)

74.00/74.92 Resistance

71.91/70.89 Support 

Crude prices reversed course from a decline to an increase as the market anticipated Trump's tough stance on Iran's oil exports. Having fallen to their lowest level since late December, they found support near $70.70 and climbed to $73. To alleviate downward pressure and target $74, they need to break through the 10-day moving average resistance at $73.33.

Spot Gold

2855/2861 Resistance

2827/2822 Support

Spot Silver

32.52/32.64 Resistance

31.73/31.57 Support 

Spot gold reached a new peak of $2,840 on Tuesday, while spot silver surpassed $32 per ounce for the first time since December, fueled by a weakening US Dollar and declining Treasury yields amid rising US-China trade tensions. While a rally towards $2,850 and $2,900 is possible, comments from Federal Reserve officials may cap gains. Recent data show declining job openings and factory orders, leading to expectations of 48 basis points of easing from the Fed. Investors consider the significant US data release tonight for further guidance.

US30

44811/45043 Resistance

44279/44042 Support

On Tuesday, the three major U.S. stock indices closed higher as the U.S. suspended additional tariffs on Canada and Mexico, easing market concerns. The Dow futures continued its mild rebound but faced resistance from the 10-day moving average for two days. It needs positive news to break through; otherwise, it may drop below 44,200.

NAS100

21785/21950 Resistance

21409/21242 Support

Large tech stocks, including Apple, Tesla, and Google, rose by over 2% on Tuesday, contributing to the Nasdaq's recovery from a one-week low. The index closed above both the 10-day and 20-day moving averages. If it maintains this position, it may enter a higher range, but caution is warranted due to the downward trend line resistance from January's high.

BTC (Bitcoin)

102548/104633 Resistance

95728/93586 Support

Bitcoin (BTC) fell around $98,000 after above $100,000. This drop is linked to US-China trade tensions and significant liquidations, estimated at $10 billion. Technical indicators show bearish momentum, with an RSI of 44 and a MACD crossover suggesting further declines. If BTC drops further, it may test the $95,000 and $92,000 support zone, while recovery above $100,000 could lead to a retest of the 102,548/104,633 resistance zone. 

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