Dollar Holds Steady, All Eyes On US GDP Release 

Amidst positive US economic indicators, the Dollar Index remains stable, dampening expectations for a Federal Reserve rate cut.

Amidst positive US economic indicators, the Dollar Index remains stable, dampening expectations for a Federal Reserve rate cut. Robust US equity markets, fueled by strong corporate results, counter rising Treasury yields. Gold faces downward pressure due to improved US economic data. Crude oil surges on a significant inventory draw, highlighting strong demand amid supply challenges. The Canadian Dollar experiences bearish momentum as the Bank of Canada holds rates steady, shifting focus to potential rate cuts. Market sentiment hangs delicately on the precipice, awaiting crucial cues from upcoming data releases, most notably the impending US GDP data, and pivotal decisions from central banks.

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Current rate hike bets on 31 January Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (98%) VS -25 bps (2%)  

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Market Overview

Economic Calendar

(MT4 System Time)

Source: MQL5 

Market Movements

DOLLAR_INDX, H4

The Dollar index remains steady despite a series of positive economic indicators from the US, dampening expectations for a Federal Reserve rate cut. With a keen eye on critical data, including the upcoming US GDP release, investors are gauging the trajectory of the Dollar. Recent upbeat US Manufacturing and Services PMI data have caused a shift in rate cut probabilities, with the market now pricing in a 40% chance, down from 80% two weeks ago.

The Dollar Index is trading flat while currently near the support level. MACD has illustrated diminishing bullish momentum. However, RSI is at 58, suggesting the index might extend its gains since the RSI stays above the midline. 

Resistance level: 103.95, 104.70

Support level: 103.20, 102.30

XAU/USD, H4

Gold prices continue to face downward pressure amid better-than-expected US economic data, prompting investors to reevaluate expectations for a rate cut in March. The flattening of US Treasury yields adds to the challenges for the gold market. As market participants await fresh catalysts, the focus turns to key releases such as Personal Consumption Expenditures (PCE) and the preliminary Q4 Gross Domestic Product (GDP), shaping market sentiment and offering insights into the Fed’s easing calendar.

Gold prices are trading lower following the prior breakout below the previous support level. MACD has illustrated increasing bearish momentum, while RSI is at 42, suggesting the commodity might extend its losses since the RSI stays below the midline.  

Resistance level: 2020.00, 2035.00

Support level: 1985.00,  1955.00

GBP/USD，H4

GBP/USD pair faced a predominantly upward trajectory influenced by the resolute strength of the US Dollar, with the UK market lacking significant catalysts in recent times. As the US delivered a series of positive economic data, investors shifted their portfolios away from the UK, contributing to the appreciation of the US Dollar.

GBPUSD is trading lower while currently testing the support level. MACD has illustrated diminishing bullish momentum, while RSI is at 50, suggesting the pair might extend its losses after breakout since the RSI retreated sharply from overbought territory. 

Resistance level: 1.2785, 1.2815

 Support level: 1.2710, 1.2610

EUR/USD，H4

The Euro remains in consolidation, navigating between support and resistance levels as investors await crucial monetary policy decisions from the European Central Bank (ECB). Disappointing economic sector data, including PMIs below the 50-mark contraction threshold, tempers optimism. While the ECB is expected to maintain interest rates, all eyes are on President Christine Lagarde’s statements for insights into potential future rate cut decisions.

The EUR/USD is trading lower following the prior retracement from the resistance level. MACD has illustrated diminishing bullish momentum, while RSI is at 48, suggesting the pair might extend its losses since the RSI stays below the midline. 

Resistance level: 1.0945, 1.1005

Support level: 1.0850, 1.0755

USD/CAD，H4

The Canadian Dollar experiences significant bearish momentum as the Bank of Canada holds its key overnight interest rates unchanged at 5%. Despite underlying inflation concerns, the focus shifts to potential rate cuts rather than hikes. The Bank of Canada’s decision to trim its growth outlook adds uncertainty, leaving the timing of rate cuts open-ended, impacting the Canadian Dollar.

USD/CAD is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 61, suggesting the pair might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 1.3535, 1.3620

 Support level: 1.3450, 1.3345

HK50, H4

The Hang Seng Index and broader Chinese equity market experienced a robust surge, propelled by aggressive stimulus initiative from Beijing policymakers. In response to a recent share rout, Chinese authorities are mobilising substantial funds from state-owned enterprises, instilling confidence among investors and fostering a bullish momentum for HK50

HK50 is trading higher while currently near the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 57, suggesting the index might extend its gains since the RSI stays above the midline. 

Resistance level: 16180.00, 16560.00

Support level: 15710.00, 14945.00

Dow Jones, H4

The US equity market remains robust despite an increase in US Treasury yields. Positive financial results from major corporations, notably Netflix, contribute to the market’s resilience. Netflix’s impressive subscriber growth of 13.12 million in Q4 boosts the company’s stock by over 10%, while the semiconductor sector sees positive gains, propelled by Advanced Micro Devices Inc’s rise after analysts upgrade the chipmaker on expectations of increased chip demand in the AI revolution.

Dow Jones is trading flat while currently near the resistance level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 62, suggesting the index might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 37750.00, 40000.00

Support level:  36600.00, 35805.00

CL OIL, H4

Crude oil prices surged, propelled by a remarkable 9.233 million barrel decline in US inventories, surpassing market projections of a 2.150 million barrel decrease, as reported by the Energy Information Administration (EIA). This substantial drawdown not only exceeded expectations but also serves as a robust indicator of the prevailing strength in oil demand. Simultaneously, the oil market faced additional supply constraints due to severe cold weather, resulting in the closure of multiple oilfields. 

Oil prices are trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 62, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 75.25, 78.65

Support level: 70.25, 67.40