ATFX Market Outlook 21st February 2025

ATFX Market Outlook 21st February 2025

Gold Shines Bright, U.S. Stocks Sell Off After Rally

Opinion Today:

More Fed officials are increasingly concerned that uncertainty surrounding Trump's policies will impact expectations for interest rate cuts. U.S. stocks declined on Thursday, driven by tariff worries and Walmart's negative earnings forecast. The downturn affected all three major indices, with the Dow Jones Industrial Average experiencing the most significant drop.

The dollar weakened against major currencies as investors reacted to Trump's latest tariff strategy. The euro rose by 0.76% to $1.0500, while the dollar fell by 1.21% against the yen, settling at 149.63.

Gold prices reached a record high amid fears of a potential global trade war, with spot gold climbing to $2,938.70 an ounce and peaking at $2,954.69. Oil prices increased for the third consecutive day, supported by a decline in U.S. gasoline and distillate stocks, alongside supply concerns from Russia.

Today, Europe and the US released February's manufacturing, service, and comprehensive PMI data. The US figures are crucial, with expectations for continued expansion. January's manufacturing PMI hit a 7-month high, suggesting an optimistic outlook for the US economy. Tonight's data is expected to remain stable. If the data beats expectations, the momentum will strengthen the US stock and USD. 

Key Data:

15:00 GB Retail Sales JAN *** 

16:30 EU GERMANY Manufacturing & Services PMI Flash FEB **

17:00 EU Manufacturing & Services PMI Flash FEB **

17:30 GB Manufacturing & Services PMI Flash FEB ** 

21:30 CA Retail Sales DEC ** 

22:45 US Manufacturing & Services PMI Flash FEB *** 

23:00 US Michigan Consumer Sentiment Final FEB *** 

Key Data and Events Next Week

German Federal Election and EU JAN CPI Final on Monday

ECB Minutes and US GDP & PCE Prices 2nd Est Q4 on Thursday

EU GERMANY FEB CPI Prel and US Core PCE Price Index JAN on Friday 

EUR/USD

1.0528/1.0542 Resistance

1.0470/1.0456 Support 

EUR/USD Holds at 1.0500 Amid Tariff Concerns and Jobless Claims Rise. The pair remains steady as Trump's tariff announcements loom, potentially pressuring the Euro. Recent US jobless claims data suggests the Federal Reserve may keep its current stance while the European Central Bank considers interest rate cuts, increasing the Euro's vulnerabilities. Traders await Friday's advanced HCOB Manufacturing and Services PMIs for Germany and the eurozone.

GBP/USD

1.2713/1.2739 Resistance

1.2603/1.2576 Support 

Sterling rose against the US Dollar, with GBP/USD reaching 1.2616, up 0.25%, as a weak US jobs report weighed on the Dollar. Traders are watching for UK Retail Sales data, while inflation above 3% lowers the chance of further rate cuts by the Bank of England. GBP/USD holds a neutral to slightly bullish outlook, needing to break the 100-day SMA at 1.2664 for more upward momentum. A drop below 1.2600 could indicate a bearish trend.

USD/JPY

150.50/150.94 Resistance

149.02/148.57 Support 

Japan's January CPI inflation reached a two-year high of 4.0%, up from 3.6% in December, fueled by strong consumer spending and rising food prices. Core CPI rose to 3.2%, surpassing the expected 3.1%. The Bank of Japan raised rates by 25 basis points and may increase them to 1% by 2025. Strong wage growth and reduced government subsidies support ongoing inflation, giving the BOJ room for additional rate hikes amid a resilient economy, bull JPY.

USD/CAD

1.4260/1.4339 Resistance

1.4134/1.4054 Support

The USD/CAD pair dropped to around 1.4200 on Thursday as crude prices increased, and the US dollar softened after US weak data. Canada’s December Retail Sales data, expected to show a 1.6% month-on-month increase, is forthcoming. More substantial retail sales data may lead the Bank of Canada's interest rate to steady, bull CAD. 

U.S Crude Oil Futures (APR)

73.22/73.82 Resistance

72.03/71.30 Support 

Oil prices increased for a third day on Thursday, buoyed by U.S. gasoline and distillate drawdowns and concerns about supply disruptions in Russia.  The April WTI contract climbed 0.35% to $72.50. The Energy Information Administration noted a slight rise in U.S. crude stockpiles, with fuel inventories down due to seasonal refinery maintenance, which may further limit the crude price gain.

Spot Gold

2957/2967 Resistance

2921/2913 Support

Spot Silver

33.15/33.40 Resistance

32.57/32.31 Support 

Gold prices rose to nearly $2,939 on Thursday, down from a peak of $2,954 as traders took profits. Factors driving the increase included trade war concerns, a weak US Dollar, and falling Treasury yields. The Federal Reserve's Meeting Minutes highlighted worries about rising prices from Trump's policies, leading to a decision to maintain rates. Atlanta Fed President Bostic predicts two rate cuts this year. Gold support levels are at $2,921 and $2,913, while resistance levels are at $2,957 and $2,967.

US30

44278/44569 Resistance 

44808/44573 Support

U.S. stock index futures were essentially unchanged on Thursday evening amid President Trump's threats of new trade tariffs and signals from the Federal Reserve indicating fewer interest rate cuts. However, Trump proposed a 25% duty on various goods, raising fears of a global trade war. The Dow retreated from its peak and fell 1% to 44,176.90 points. The outcome of tonight's U.S. manufacturing and services PMI and consumer sentiment may influence investor sentiment, guiding the Dow's forthcoming performance. A failure to hold above 43,900 could lead to declines toward the 100-day SMA around 43,480, while a recovery above 44,200 is needed to ease selling pressure.

NAS100

22174/22320 Resistance

21802/21689 Support

NASDAQ dropped 0.5% to 19,962.36 points on Thursday as investors reacted to mixed economic data and cautious comments from Federal Reserve officials. Signs of weakness in the labour market contributed to the decline. The outcome of tonight's U.S. manufacturing and services PMI and consumer sentiment may influence investor sentiment, guiding NAS100's forthcoming performance. 

BTC (Bitcoin)

99058/100150 Resistance

96873/95521 Support

Bitcoin (BTC) traded above $98,000 on Thursday, maintaining its range-bound movement. Since the February 3 market crash linked to trade tensions and tariffs, BTC hasn't reclaimed the $100,000 level. If market conditions improve, it could recover. The $100,000 mark is short-term resistance; breaking it may lead to further gains. Conversely, if it falls below $97,000, the following targets are $96,000 and $95,000.

About ATFX 

ATFX is a leading global fintech broker with a local presence in 23 locations and licenses from regulatory authorities, including the UK's FCA, Cypriot CySEC, UAE's SCA, Australian ASIC, South African FSCA, and Hong Kong SFC. With a strong commitment to customer satisfaction, innovative technology, and strict regulatory compliance, ATFX provides exceptional trading experiences to clients worldwide.