ATFX Market Outlook 19th February 2025

ATFX Market Outlook 19th February 2025

Record High for S&P 500: All Eyes on Fed Meeting Minutes 

Opinion Today:

Positive sentiment surrounding technology stocks and a robust earnings season contributed to market optimism despite ongoing negotiations between the U.S. and Russia regarding Ukraine being a focal point. The S&P 500 reached a record high, closing 0.3% higher at 6,129.62. However, expectations of interest rate cuts from the Federal Reserve limited further gains. The NASDAQ rose by 0.1%, while the Dow remained steady.

The Federal Reserve is set to release the minutes from its January meeting on Wednesday, which will clarify its stance on interest rates. Several Fed officials are also scheduled to speak this week. Additionally, upcoming PMI data for February is expected to provide insights into the economy amid persistent inflation concerns and trade tensions, particularly in light of President Trump's tariffs on steel and aluminium. The dollar gained against major currencies, particularly the euro, with the dollar index increasing by 0.3% to 107.08. The euro fell by 0.35% to 1.0445, and the dollar appreciated by 0.36% to 152.05 against the yen. The pound declined by 0.1% to 1.2611.

Gold prices rose over 1% amid concerns over U.S. President Trump’s tariff plans, with spot gold increasing by 1.3% to $2,935.58 an ounce. Oil prices also climbed due to supply disruptions from Russia and the U.S., although potential peace talks in Ukraine limited gains.

Today, there are no major data releases in the market; the only significant figures are the GB CPI and PPI for January, which sterling traders are closely monitoring. At midnight, the FOMC minutes will also capture attention.

Key Data:

15:00 GB CPI & PPI JAN *** 

17:00 EU Current Account DEC ** 

21:30 US Building Permits & Housing Starts JAN ** 

Tomorrow

03:00 FOMC Minutes *** 

05:30 US API Crude Oil Stock Change *** 

08:30 AU Unemployment Rate JAN ** 

09:00 CN 1-Yr and 5 Yrs Loan Prime Rate ** 

15:00 EU GERMANY PPI YoY JAN ** 

21:30 CA PPI YoY JAN **

21:30 US Initial Jobless Claims *** 

EUR/USD

1.0498/1.0529 Resistance

1.0400/1.0370 Support 

The Euro declined by over 0.30% against the U.S. dollar, trading at 1.0445, as risk appetite improved despite President Trump's 25% tariffs on imported cars. The EUR/USD had recently benefitted from progress in Ukraine-Russia peace talks, although Zelenskiy postponed his visit to Saudi Arabia. On Wednesday, the EU has no major releases, while the U.S. will publish the FOMC meeting minutes and January housing data. A positive result may lead to a strengthening of the dollar, putting pressure on the EUR.

GBP/USD

1.2662/1.2688 Resistance

 1.2576/1.2551 Support 

GBP/USD fell 0.16% to 1.2605 on Tuesday after a strong rally, but the outlook remains positive as it targets the 100-day SMA at 1.2660. Momentum indicators suggest a temporary pullback, with the RSI at 62 and a flat MACD. Fresh volatility is expected on Wednesday with key UK economic data, including inflation and retail sales, which could impact Bank of England policy and the pair's direction.

USD/JPY

152.42/152.88 Resistance

151.52/150.95 Support 

February has seen notable volatility for USD/JPY, with profit-taking followed by a rebound after a stronger-than-expected Q4 Japanese GDP report, which pushed the pair down to nearly 151.00. JPY strength is anticipated to continue, with a year-end target for USD/JPY at 145.00 and potential downside risks. In the short run, a break below 151 could see the pair decline toward December's low of about 148.65.

USD/CAD

1.4260/1.4340 Resistance

1.4134/1.4054 Support

The USD/CAD pair is under pressure around 1.4200 as the Canadian Dollar strengthens following January's CPI report, which showed a 1.9% year-over-year increase. Month-on-month inflation rose 0.1%, remaining below the Bank of Canada's 2% target, potentially leading to further rate cuts. Meanwhile, the U.S. dollar is stable, with the dollar index recovering to nearly 107.00. Investors are awaiting the FOMC minutes for insights on the Fed's interest rate policy amidst strong economic growth and high inflation, which could impact the pair's momentum.

U.S Crude Oil Futures (March)

72.21/72.77 Resistance

70.94/70.39 Support 

Crude prices rose for two consecutive days due to the attack on a Russian oil pipeline and reduced supply from North Dakota's cold weather. Prices have surpassed the 10-day moving average and, if sustained, could test the 20-day moving average resistance at $72.33. This resistance also aligns with trend line resistance from early February, potentially limiting further gains.

Spot Gold

2948/2957 Resistance

2921/2913 Support

Spot Silver

33.15/33.40 Resistance

32.57/32.31 Support 

Gold prices rose by 1.2% to $2,932.94 an ounce on Tuesday, driven by strong seasonal demand from central banks and uncertainty surrounding trade tariffs despite a stronger dollar. Moreover, interest in gold as a safe-haven asset remained high amid concerns over President Trump's postponed trade tariffs and the potential for the EU to impose import controls on U.S. goods. These factors are likely contributing to gold's ongoing upward momentum.

US30

44735/44870 Resistance 

44323/44153 Support

U.S. stocks rose in late trading on Tuesday as the three major indexes turned positive. The Dow initially fell but then rebounded, ultimately recording a slight gain. It tested a three-day low during the session but regained lost ground after finding key support near 44,300. It is currently trading within the daily moving average range. Whether it breaks through will establish the short-term long-short boundary.

NAS100

22320/22431 Resistance

21945/21801 Support

Large tech stocks fluctuated overnight, with Meta dropping 2.76% and ending its winning streak. Despite this, the Nasdaq closed at a record high above 22,100, marking four consecutive days of gains. Attention is now on potential tariff risks and the Fed minutes for further opportunities.

BTC (Bitcoin)

97068/98474 Resistance

94456/93172 Support

Bitcoin fell 0.3% to the $95,000 mark, marking its third consecutive day of decline amid concerns over U.S. trade tariffs and the Federal Reserve's interest rate outlook. The possibility of new tariffs raises fears of slower global growth, which impacts risk assets. Persisting inflation above the Fed's target could lead to a prolonged hawkish stance, reducing the appeal of non-yielding assets such as Bitcoin. On the technical front, Bitcoin struggles to recover the $98,000 mark, and the downward momentum may continue, testing lower support. 

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