ATFX Market Outlook 17th March 2025 

ATFX Market Outlook 17th March 2025 

Gold Tops $3,000, Retreats; U.S. Consumer Data in Focus

Market HighlightU.S. consumer confidence dropped to its lowest level in March in nearly two and a half years, driven by concerns over Trump's tariffs, which could raise prices and harm the economy. Despite this, U.S. stocks rebounded as investors seized bargains after a turbulent week marked by recession fears.

The dollar gained against some currencies, buoyed by rising inflation expectations, indicating the Federal Reserve might hold off on rate cuts. The euro rose 0.27% against the dollar following a fiscal deal in Germany aimed at boosting growth.Gold surpassed $3,000 for the first time, hitting a record $3,004.86 as investors sought safe-haven assets amid economic uncertainty. Oil prices also rebounded 1%, reflecting concerns over the ongoing war in Ukraine impacting energy supplies.Key OutlookThe US retail sales report was released in the early US session, and with recent weakening confidence in the economic outlook, the market is eager for a positive consumer report. Attention is whether February's monthly retail sales rate can rise, with expectations at 0.6% (previously -0.9%). The New York Fed Manufacturing Index and the NAHB Housing Market Index for March will also be released.

[Financial Data and Events of Significant Concern]

20:30 US Core Retail Sales FEB *** 

22:00 US NAHB Housing Market Index MAR & Retail Inventories JAN **

Tomorrow

18:00 EU ZEW Economic Sentiment Index MAR ** 

20:30 US Housing Starts & Building Permits Prel FEB **

20:30 CA Core CPI FEB *** 

21:15 US Industrial Production FEB ** 

EURUSD

·       Resistance: 1.0933/1.0980 

·       Support: 1.0857/1.0810

The EUR/USD pair benefits from improved sentiment amid US- Russia ceasefire talks. The Euro rose due to Germany's debt overhaul and increased state spending after Chancellor Merz's coalition talks. A decline in the University of Michigan's Consumer Sentiment Index raised expectations for a Federal Reserve rate cut by June. ECB Vice President de Guindos voiced concerns over Trump's policies, creating economic uncertainty. Currently, the EUR/USD hovers around 1.0880, while the US dollar faces challenges ahead of Monday’s retail sales data.

GBPUSD

·       Resistance: 1.2986/1.3057 

·       Support: 1.2873 / 1.2817

The GBP/USD pair trades around 1.2930, peaking at nearly 1.2990. The US dollar is at a multi-month low due to tariff concerns and sluggish inflation, likely leading to multiple Federal Reserve rate cuts, which will benefit GBP/USD. Despite the UK economy contracting by 0.1% in January, expectations of slower Bank of England rate cuts support GBP bulls. Traders are focused on upcoming US economic data and this week's FOMC and BoE meetings.

USDJPY

·       Resistance: 149.27/149.59

·       Support: 148.22/147.89

USD/JPY closed higher last Friday, breaking through the 10-day moving average at 148.33, which now acts as support. It continued rising this morning, targeting the key resistance at the 20-day moving average near 149.18.

US Crude Oil Futures (APR)

·       Resistance: 68.51/68.86

·       Support: 67.41/67.07

Crude prices rebounded last week, marking a modest weekly increase for the first time in nearly two months amid ongoing Russia- Ukraine ceasefire negotiations. The upward trend continued after closing above the 10-day moving average, reaching its highest level since March 7. The 20-day moving average above $68.40 may become a target, but resistance is expected.

Spot Gold

·       Resistance: 3003/3017

·       Support: 2970/2956

Spot Silver

·       Resistance: 34.14 / 34.41

·       Support: 33.49 / 33.21

Gold prices (XAU/USD) remain steady at nearly $2,985, recovering from a peak of $3,005, bolstered by a weaker US Dollar and trade war uncertainties. Traders are anticipating the February Retail Sales data from the US. Tensions escalated as President Trump threatened a 200% tariff on European alcohol, adding 25% tariffs on steel and aluminum. Furthermore, a decline in the University of Michigan Consumer Sentiment Index enhances gold's appeal. Geopolitical tensions continue to be high, but the easing of Russia- Ukraine tensions may exert downward pressure on gold prices.

Dow Futures

·       Resistance: 42333/42702

·       Support: 40639/40277

The Dow Futures rose by 520 points on Friday after a two-week decline of 3,373 points (-7.66%). However, this rebound may be premature as the March University of Michigan Consumer Sentiment Index fell to 57.9, its lowest in two years, due to concerns over a global trade war and rising inflation. The 5-year inflation outlook increased to 3.9%, the highest in 40 years, while one-year expectations hit 4.9%. Despite gains, the DJIA remains below the 200-day Exponential Moving Average near 42,000, with traders hoping to maintain a bullish trend after touching levels below 41,000.

NAS100

·       Resistance: 20141/20344

·       Support: 19297/19101

Last Friday, U.S. technology stocks rose sharply after the Senate passed a spending bill, reducing the government shutdown risk. The Nasdaq started low but recorded its most significant single-day gain since November. We'll see if it can maintain upward momentum and challenge the 10-day moving average resistance near 19,900.

BTC

·       Resistance: 86682/88686 

·       Support: 78187/76216

Bitcoin (BTC) traded within a narrow 8% range between $76,000 and $84,472 this week, closing above $83,300 on Friday for a 3% weekly gain from approximately $80,700. This recovery follows an 8% sell-off linked to President Trump's trade tariffs, which resulted in over $900 million in liquidations. Bitcoin briefly fell below the $80,000 support for three days, and any further declines could weaken this support, as traders may adjust stop losses or close long positions to minimise losses.

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