ATFX Market Outlook 21st January 2025

ATFX Market Outlook 21st January 2025

US Stock Futures Soar While Dollar Dips as Trump Assumes Office

Opinion Today:

US stock futures increased after President Trump took office, with the S&P 500, Nasdaq 100, and Dow Jones futures rising by 0.6%. Trump's initial executive orders addressed immigration, fossil fuel production, and environmental regulations, reflecting his "America First" agenda. Investors are cautiously evaluating potential policy impacts. This week, major corporate earnings reports are anticipated, including those from Netflix, GE Vernova, Johnson & Johnson, Procter & Gamble, American Express, and Verizon.

On his first day in office, Trump signed several executive orders, fulfilling many campaign promises. The dollar index decreased by 1.2% on Monday, marking its biggest daily drop since late 2023, closing at $155.59. Gold prices increased due to the weaker dollar as the market assessed the expected economic impact of subsequent policies, including strategic reserves and energy exports to the United States.

The UK released its latest employment report, focusing on whether the ILO unemployment rate for November remains at 4.3%. Mixed November data led to a short-term decline in the pound. If the unemployment rate remains high, the Bank of England may adopt a more dovish stance, leading to increased market expectations for a rate cut in February, which could negatively impact sterling's pairs.

Key Data:

15:00 GB Unemployment Rate NOV ** 

18:00 EU & GERMANY ZEW Economic Sentiment Index JAN **

21:30 CA CPI DEC ** 

Tomorrow

NYMEX Crude Oil February Futures Expires ***

05:30 API Crude Oil Stock Change *** 

05:45 NZ CPI Q4 **

23:00 US Leading Index DEC ** 

23:15 ECB President Lagarde Speaks *** 

EUR/USD

1.0435/1.0465 Resistance

1.0305/1.0275 Support 

The euro recorded its biggest gain since September 2023 against the US dollar yesterday due to the decline of the US dollar and refreshed its high since 7 January. Unfortunately, it lacked momentum and encountered resistance at the previous high. Even though it relaunched a test of 1.0430 in today's Asia trading session, it turned back again. Investors pay attention to re-pointing to the initial support of the daily moving average to defend the 1.0300 level during the day.

GBP/USD

1.2336/1.2398 Resistance 

1.2209/1.2151 Support 

Sterling rose sharply against the US dollar yesterday, following the dollar's declines, and recorded its biggest one-day gain since November 2023. After reaching a new high last week, it faced resistance from yesterday's peak and has given back some of its gains. Currently, Sterling is testing the support level of the 10-day moving average, which is around 1.2250. Maintaining this high level depends on the outcome of the latest UK jobs report, as it could influence the likelihood of a rate cut in February.

USD/JPY

156.23/156.62 Resistance

154.91/154.60 Support 

USD/JPY declined with the U.S. dollar yesterday but stayed within the prior two-day range. It opened slightly lower today and attempted to recover. Following fluctuations, it hit a low not seen since December 19 last year. With resistance above 156, a key focus will be on maintaining 154.60.

USD/CAD

1.4512/1.4540 Resistance

1.4312/1.4285 Support

The USD/CAD pair experienced a significant drop overnight, hitting a three-week low, but it rebounded sharply early today, reaching a high not seen since March 2020. Although it's given up some gains, key support near the daily moving average of around 1.4380 may keep it in a high range. Later today, watch for Canada's December CPI to see if it maintains growth or declines, which could guide the Bank of Canada to cut interest rates further.

U.S Crude Oil Futures (Mar)

77.72/78.88 Resistance 

74.92/74.00 Support

Trump's commitment to increasing U.S. crude oil production and postponing tariffs caused crude oil prices to drop to approximately $75. This decline marks three consecutive days of falling prices, the first occurrence since early December. The price fell below the 10-day moving average, confirming a target below $75.

Spot Gold

2725/2733 Resistance

2699/2691 Support

Spot Silver

30.80/30.97 Resistance

30.06/29.88 Support 

Spot gold experienced a sharp decline yesterday but rebounded in the Asian market. It fluctuated in the U.S. trading session before closing slightly higher, driven by a weaker U.S. dollar. From a technical standpoint, it needs to maintain support at $2,689 to allow for potential gains, with the possibility of testing last week's high of $2,725.

US30

43739/43968 Resistance 

43380/43154 Support 

The Dow futures closed high overnight due to Trump's inauguration speech. After last week's rebound, today's focus is on whether it will face resistance near 43,600, the highest level since December 18, but require news support to break through, such as more substantial major corporate earnings reports.

NAS100

21707/21892 Resistance

21333/21145 Support 

Trump's latest inaugural speech did not provide a boost, leaving the market to react to disappointment when trading resumes potentially. The lack of tariff mention might offer some support. Technically, the Nasdaq should watch the 20-day moving average near 21,200, as it faces downward trend line resistance since December's highs.

BTC (Bitcoin)

105991/108104 Resistance

95981/94373 Support

Bitcoin reached a record high of $109,588, driven by expectations of crypto-friendly regulations from President-elect Trump. This surge followed the volatile launch of Trump's memecoin, $TRUMP, which initially soared over 7000% before dropping due to profit-taking. 

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