ATFX Market Outlook 20th January 2025

ATFX Market Outlook 20th January 2025

Trump 2.0 Era Kicks Off: U.S. Stocks Poised for a Boost

Opinion Today:

U.S. stocks rose, with the Dow up 3.69%, S&P 2.92%, and Nasdaq 2.43%, driven by optimism over incoming Trump policies. The U.S. dollar index rose 0.34% but fell 0.2% for the week, ending a six-week winning streak. Gold prices dipped due to a stronger dollar and Gaza ceasefire below $2,700 on Monday Asia trading session. But US trade policy and central bank dovish policy uncertainty the gold price hold $2,690. Oil prices flat with tighter supply cheer offset by Trump caution and supply concerns over Russian sanctions persist.

On Monday, global financial markets focused on Trump's inauguration as US president. US stocks and the dollar are expected to rise in an optimistic atmosphere. Typically, stock movements on Inauguration Day are positive, seen as a "barometer" for the market. However, due to Martin Luther King Jr. Day, the US stock market is closed and may react on Tuesday.

Key Data:

US Holiday

Trump’s Inauguration 

12:30 JP Industrial Production NOV ** 

15:00 EU GERMANY PPI DEC ** 

23:30 CA BoC Business Outlook Survey ** 

Tomorrow

15:00 GB Unemployment Rate NOV ** 

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

21:30 CA CPI DEC ** 

EUR/USD

1.0330/1.0356 Resistance

1.0223/1.0198 Support 

Last Friday, the euro briefly rose against the US dollar before falling. It faced resistance from the 10-day and 20-day moving averages on the daily chart, with 1.0289 as the initial resistance level. The key support level is last week's low at 1.0258 unless it can break above these moving averages.

GBP/USD

1.2228/1.2259 Resistance 

1.2101/1.2077 Support 

The sterling experienced its most significant decline in a week against the dollar on Friday, following the UK's GDP growth of 0.1% month-on-month in November, which was below expectations. Additionally, market participants have increased their speculation that the Bank of England will soon implement another interest rate cut. As the exchange rate falls below the 1.2200 mark, it may approach the low of 1.2100 observed a week ago.

USD/JPY

156.92/157.21 Resistance

155.21/154.91 Support 

USD/JPY rebounded last Friday, nearly recovering all losses from the previous day. In Asia trading session today, it fluctuated during intraday trading. The market is watching if the Bank of Japan will raise interest rates this week. Technically, breaking through the resistance at 157.10 is crucial to easing current pressure.

USD/CAD

1.4507/1.4535 Resistance

1.4416/1.4394 Support

USD/CAD showed strong performance last Friday, achieving the biggest increase since early December and reaching a high not seen since March 2020. Though it has rebounded significantly, the exchange rate is nearing the critical level of 1.4500. This could indicate a short-term consolidation in a high range as momentum might slow down.

U.S Crude Oil Futures (Feb)

78.88/79.83 Resistance 

75.85/74.92 Support

The Gaza ceasefire agreement took effect on the 19th. Crude oil prices fell last Friday but still ended higher for the fourth week in a row, hovering around $77. The key support is at $76.80, the 10-day moving average. If this level holds, it could climb back to recent highs. A drop below this level may indicate a trend reversal and threaten to fall below $76.

Spot Gold

2708/2716 Resistance

2675/2667 Support

Spot Silver

30.62/30.80 Resistance

29.88/29.71 Support 

Spot gold approached $2,720 last Friday but fell due to the stronger US dollar and Gaza ceasefire, losing most gains, it continued dropping in early Asian trading, testing $2,700. If it falls below this level, last week's rebound may reverse. The market awaits Trump's inauguration, pressuring gold downwards. Watch the 10-day moving average support at $2,681 for potential adjustments.

US30

43740/43969 Resistance 

43379/43154 Support 

U.S. stocks ended higher on Friday as the market looked forward to the start of the workweek with optimism. The Dow futures recorded its largest weekly gain since the November 2024 presidential election. Investors are now observing whether it can surpass the previous high's critical point.

NAS100

21707/21892 Resistance

21145/20913 Support 

Bond yields fell while major tech stocks, including Tesla and Nvidia, rose more than 3% last Friday. Despite an early decline, the Nasdaq retained most of its gains. It could face resistance from the downward trend line since December 17 unless Trump's inauguration boosts optimism.

BTC (Bitcoin)

104351/105991 Resistance

97584/95981 Support

Last Friday, Bitcoin surged to $105,983 due to anticipation of a Trump-led crypto initiative but fell to $99,412 by Monday. BTC/USD has been volatile, with key support at 91,735 and resistance at 104,091. Strategic buying is suggested between 98,631 and 97,272. Maintaining above 103,311 is crucial for gains, while dropping below may lead to bearish trends.

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