Dollar Stall Ahead of GDP

Market Summary

The Dollar Index continues to trade within a narrow range, exhibiting minimal change with a marginal increase of 0.02% in the last session. Concurrently, U.S. equity markets find themselves in a state of indecision as investors await the release of U.S. GDP data scheduled for today and Thursday's PCE. Market sentiment anticipates a potential easing in GDP growth due to the impact of aggressive monetary tightening policies since March 2022. A softer GDP figure could place pressure on the strength of the U.S. dollar while potentially providing support for equity markets.

On the other hand, the New Zealand dollar (Kiwi) experienced a significant decline of nearly 1% during the Asia market opening session. Despite the Reserve Bank of New Zealand (RBNZ) maintaining the interest rate at the expected level of 5.50%, a dovish narrative in the governor's statement weighed down on the Kiwi's strength.

Furthermore, oil prices are holding steady at recent high levels, with attention turning to the forthcoming China PMI readings scheduled for Friday. These Chinese PMI figures are crucial for traders as they offer insights into the economic conditions in China, which, in turn, relate to the demand for crude oil.

  Current rate hike bets on 20th March Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (89.5%) VS -25 bps (10.5%)  

Market Movements

DOLLAR_INDX, H4

The Dollar Index faced continued headwinds against a basket of major currencies, grappling with a cascade of lacklustre economic data. A notable dip in the US CB Consumer Confidence, slipping from 110.9 to 106.7, underscored a prevailing sense of economic pessimism. The aggressive decline in last month's US Durable Goods Orders, plunging from -0.30% to -6.1%, missed market expectations, collectively dimming the outlook on the United States' economic trajectory and exerting downward pressure on the demand for the Dollar.

The Dollar Index is trading lower while currently testing the support level. However, MACD has illustrated increasing bullish momentum, while RSI is at 45, suggesting the index might experience technical correction since the RSI rebounded sharply from oversold territory. 

Resistance level: 104.50, 104.95

Support level: 103.70, 102.90

XAU/USD, H4

As the US Dollar weakened, gold prices saw an extension of their gains, delicately hovering around a critical resistance level. Despite this, investors maintained a cautious stance in anticipation of pivotal economic data slated for later in the week. Market participants are poised to scrutinise pivotal economic indicators, notably the GDP and Core PCE data, eagerly seeking cues that could decisively shape the market's trajectory.

Gold prices are trading higher while currently testing the resistance level. However, MACD has illustrated increasing bearish momentum, while RSI is at 51, suggesting the commodity might experience technical correction since the RSI retreated sharply from overbought territory. 

Resistance level: 2035.00, 2060.00

Support level: 2015.00, 1985.00

 GBP/USD，H4

The GBP/USD currency pair is witnessing a dissipation in its bullish momentum as it approaches resistance levels around 1.2710. Ahead of the anticipated release of U.S. GDP data today, the Dollar Index has managed to hold above its key support level at 103.75, suggesting a potential stabilisation in the dollar's value. Conversely, the Sterling appears devoid of significant catalysts to drive its strength further, leading to a period of consolidation within a narrow trading range for the pair.

The GBP/USD pair on the brink of breaking out from its prominent uptrend channel suggests a potential trend reversal for the pair. The RSI maintained at above 50 level while the MACD is easing and moving lower, suggesting an easing in bullish momentum. 

Resistance level: 1.2710, 1.2785

Support level:1.2635, 1.2530

EUR/USD，H4

The EUR/USD pair has moderated its upward trajectory, encountering resistance near the 1.0866 level. Today's forthcoming U.S. GDP data stands as a critical determinant for the currency pair's direction. A GDP growth rate surpassing expectations could exert downward pressure on the EUR/USD, whereas a weaker performance might buoy the pair. Additionally, the release of the Eurozone CPI data scheduled for this Friday will be closely monitored, as it holds the potential to significantly influence the euro's valuation against its counterparts.

EUR/USD has been consolidating for the past few sessions with signs of easing in bullish momentum, suggesting a potential trend reversal for the pair. The MACD is flowing flat above the zero line while the RSI has slightly eased from near the overbought zone, suggesting the bullish momentum remains intact. 

Resistance level: 1.0865, 1.0954

Support level: 1.0775, 1.0770

 Nasdaq，H4

While the US equity market continues its ascent to new highs, driven by optimism in Artificial Intelligence and robust corporate performance, a shadow of uncertainty looms. Investor sentiment, predominantly bullish, confronts concerns ahead of imminent economic data releases. The focus shifts to crucial reports, including US GDP and Core PCE Price index, with a potential uptick in inflation prompting speculation about the Federal Reserve's stance on rate cuts and impacting the market's allure.

Nasdaq is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 59, suggesting the index to extend its gains after breakout the resistance level since the RSI stays above the midline. 

Resistance level: 18150.00, 19255.00

Support level: 17280.00, 16670.00

 USD/JPY, H4

The Japanese Yen experienced a boost from its positive CPI data released yesterday, although the initial momentum has tapered, leaving the currency pair in a consolidation phase at recent highs. The upcoming release of U.S. GDP data later today is highly anticipated, poised to be a significant economic indicator that could steer the direction of the currency pair. Moreover, market participants are also keenly awaiting the U.S. PCE reading, scheduled for Thursday, adding another layer of anticipation to the week's economic calendar.

The pair has formed a higher high, and an ascending triangle price pattern suggests a potential bullish trend for the pair. The RSI is hovering near the 50 level while the MACD declines to near the zero line, suggesting the bullish momentum has drastically eased.

Resistance level: 151.85, 154.90

Support level: 149.50, 147.60

 CL OIL, H4

Oil prices rebounded on concerns about supply disruptions in the Middle East following attacks by Iran-aligned Houthis. On the other hand, The market's focus remains on the OPEC+ producer group, with analysts expecting them to maintain production cuts at least until their March meeting, potentially providing additional support for oil prices.

Oil prices are trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 60, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 78.65, 81.20

Support level: 75.20, 71.35