ATFX Market Outlook 17th April 2025

ATFX Market Outlook 17th April 2025

Gold Surges Over $100 as Fed Dismisses 'Bottoming Out' Fears

Market Highlight

U.S. March retail sales saw their most significant increase over two years as households boosted purchases to counter tariff-related price hikes. Despite Federal Reserve Chairman Powell noting a slowdown in economic growth and denying a "Fed put," traders are betting on a potential one-percentage-point rate cut starting in June. U.S. stocks fell sharply after Nvidia warned about costs from new chip export restrictions to China. 

The dollar declined, with safe-haven and risk-sensitive currencies gaining ground; EUR/USD rose 0.84% to 1.1376, while USD/JPY fell 0.71% to 142.22. Gold prices surged over $3,300 per ounce, climbing 3.58% to $3,343.22, driven by a weaker dollar and escalating U.S.-China trade tensions. Oil prices also rose nearly 2% to a two-week high amid concerns over global supply due to new U.S. sanctions on Chinese importers of Iranian oil.

Key Outlook

The European Central Bank will announce its interest rate decision tonight, likely reducing rates by 0.25 percentage points for a seventh time. Policymakers are responding to a worsening growth outlook in the eurozone amid global trade tensions. The ECB's statement will influence the euro's recent rally and could trigger market volatility today, the last trading day before a long holiday in Europe and the U.S.

Key Data and Events Today:

14:00 EU GERMANY PPI YoY MAR ** 

20:15 ECB Interest Rate Decision *** 

20:30 US Initial Jobless Claims *** 

20:45 ECB Press Conference *** 

Tomorrow

US, Europe, Hong Kong, Australia and New Zealand Holiday

07:30 JP CPI MAR *** 

EURUSD

· Resistance: 1.1473 / 1.1498

· Support: 1.1311 / 1.1286

EUR/USD hovers around 1.1400. Markets focus on Trump's trade deals. Powell cautions that tariffs may negatively impact the USD. The ECB is expected to reduce rates by 25 bps; a dovish tone could push the euro to the 1.1260 support level, while a hawkish tone targets the 1.1500 resistance. Keep an eye on the ECB conference.

GBPUSD

· Resistance: 1.3267 / 1.3327

· Support: 1.3134 / 1.3076

The GBP/USD extended its rally for the seventh consecutive day, reaching its highest since early October last year. This follows the release of UK inflation data, which indicated a larger-than-expected drop. However, technically, the momentum is slowing down, so attention should be paid to support below the 1.3200 level.

USDJPY

· Resistance: 143.47 / 143.97

· Support: 141.81 / 141.30

U.S. President Trump unexpectedly engaged in direct tariff negotiations with Japanese officials, stating "significant progress" but without detailing the talks. USD/JPY reached its lowest point since early October last year but managed to maintain key support at 141.65, focusing on potential short-term rebound opportunities.

US Crude Oil Futures (MAY)

· Resistance: 63.88 / 64.90             

· Support: 60.53 / 59.50

Due to new U.S. sanctions on Iran's oil exports, crude oil prices initially dropped but rose slightly overnight, closing above the 10-day moving average. If US oil remains above this level, the US crude price may target last week's high above $63, with initial resistance at $63.88.

Spot Gold

· Resistance: 3380 / 3404

· Support: 3324 / 3299

Spot Silver

· Resistance: 33.29/ 34.16

· Support: 31.92 / 31.23

Federal Reserve Chairman Powell recently ruled out immediate action due to the weakening US dollar and rising trade tensions. Spot gold surged overnight, hitting a record high above $3,340, with $3,400 now as a potential target. If the ECB highlights the negative impact of the trade war on the economy in its resolution today, it could further bolster gold prices.

Dow Futures

· Resistance: 40450 / 41183

· Support: 38984/ 38076

Fed Chair Powell's tariff concerns pushed U.S. stocks lower, with the Dow hitting a three-day low above the 10-day moving average. A rebound above 40,000 is possible, but position adjustments ahead of the U.S. holiday may increase volatility.

NAS100

· Resistance: 18870/ 19314

· Support: 17980 / 17429

On Wednesday, the NASDAQ fell by 3.1% as Fed Chair Powell indicated that no imminent rate cuts would occur, and Nvidia dropped more than 6% due to China export curbs. AMD also declined, putting pressure on tech stocks. Investors should monitor developments in the tech sector and US-China trade relations.

BTC

· Resistance: 85846/ 87070

· Support: 83155 / 81972

Bitcoin (BTC) is stabilising around $83,500 after being rejected at the 200-day EMA of $85,000. A breakout above this level could indicate a bullish trend, supported by easing trade tensions as China talks with the Trump administration. CryptoQuant reports a decline in BTC sales from large investors and increased miner activity. On Tuesday, BTC fell 1.12% after failing to break $85,000, with the RSI at 50, reflecting trader indecision.

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