ATFX Market Outlook 16th January 2025

ATFX Market Outlook 16th January 2025

U.S. Stock Futures Climb on Soft Inflation Data and Strong Bank Earnings 

Opinion Today:

U.S. consumer prices steadied in December, while core inflation fell for the first time in six months, boosting the stock market. The Dow was up 1.65%, the S&P 500 was up 1.83%, and the Nasdaq was up 2.45%.

The dollar weakened as lower core inflation data raised expectations for two potential Fed rate cuts. The dollar index fell to 109.07, with the dollar at 156.49 yen, the sterling at 1.2229, and the euro near 1.03.

Gold prices rose 0.7% to $2,695.82 an ounce, and oil prices increased by over 3% due to a drop in U.S. crude inventories and concerns over supply disruptions from new U.S. sanctions on Russia.

UK's November GDP data revealed two consecutive months of contraction in October, prompting the Bank of England to potentially reassess its paused interest rate cuts, with three cuts expected this year.

Key Data:

15:00 EU GERMANY CPI DEC *** 

15:00 GB GDP & Trade Balance NOV **

15:00 GB Manufacturing & Industrial Production NOV ** 

18:00 EU Trade Balance NOV ** 

21:30 US Weekly Initial Jobless Claims & Retail Sales DEC *** 

Tomorrow

10:00 CN GDP YoY Q4 ** 

10:00 NBS Press Conference *** 

15:00 UK Retail Sales DEC ***

18:00 EU CPI Prel DEC ***

EUR/USD

1.0330/1.0356 Resistance

1.0223/1.0198 Support 

The euro rose due to a weaker US dollar, hitting a one-week high above 1.0344. However, it fell below the 10-day moving average, suggesting a drop below 1.0300. Investors await Germany's December CPI data to guide ECB rates and euro direction. 

GBP/USD

1.2297/1.2324 Resistance 

1.2158/1.2125Support 

Sterling rose slightly against the US dollar yesterday, gaining over 0.3%. It approached the 10-day moving average, and we should monitor whether it can maintain a three-day high, potentially retesting the average. Otherwise, it could fall below 1.2200. Today's focus is on the latest UK GDP and production data.

USD/JPY

156.23/156.62 Resistance

155.22/154.91 Support 

On Wednesday, the Governor of the Bank of Japan announced that a decision regarding interest rate changes would be made next week, prompting increased speculation about a potential rate hike. Consequently, the USD/JPY pair experienced a significant decline, marking its most notable one-day drop since late November and falling below crucial support levels. As a result, short-term pressure is anticipated to remain below the 156 mark.

USD/CAD

1.4362/1.4382 Resistance

1.4301/1.4276 Support

The USD/CAD pair experienced a three-day decline, the first since last November. A late recovery created a trend line support from January's low, potentially easing pressure as the pair approaches 1.4300. Resistance lies between the daily moving averages of 1.4362 and 1.4382.

U.S Crude Oil Futures (Feb)

80.75/81.00 Resistance 

79.73/79.48 Support

The EIA predicts an oil surplus by 2025. Despite a three-day rise, crude oil prices dipped overnight but surged twice over 3% in the last four days due to a significant drop in US crude inventories. Prices hit a new high in July 2024, surpassing $80. The next resistance level is above $82, with potential profit-taking likely causing consolidation around $80 in the short term.

Spot Gold

2703/2708 Resistance

2692/2687 Support

Spot Silver

30.86/31.03 Resistance

30.46/30.33 Support 

Spot gold is rising due to U.S. inflation data and a weakening dollar. It almost hit $2,700 overnight but fell short. This morning, it aims for $2,720, needing to surpass resistance at $2,703 and $2,708 first.

US30

43486/43862 Resistance 

42643/42260 Support 

U.S. inflation data and large bank financial reports lifted the market. Dow futures saw three straight gains, hitting their highest since December 26. Breaking this level may end the recent adjustment pattern, though resistance could occur at the previous high.

NAS100

21520/21708 Resistance

20913/20723 Support 

Large tech stocks rose overnight, leading the Nasdaq to open higher and end its losing streak. It crossed the 10-day moving average and paused before the 20-day average. Breaking through today is crucial for reaching 21,500, with support at 21,100.

BTC (Bitcoin)

102775/104351 Resistance

97584/95981 Support

On Wednesday, Bitcoin's price rose 3.6% to $100,686 due to a weakening dollar after US inflation data. Following VanEck's recent filing, the proposed Onchain Economy ETF aims to invest in digital transformation companies and digital assets. However, thin liquidity makes Bitcoin susceptible to sharp price fluctuations due to fewer active traders.

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