Powell Hawkish Statement Bolsters Dollar’s Strength

*Fed’s Hawkish stance on FOMC interest rate remark bolstered the dollar’s strength.

*Bank of Canada cut the rate by 25 bps as expected weighing on Canadian dollar.

*Fed’s hawkish stance hammered oil prices at 2 weeks low.

Market Summary

The U.S. dollar remained firm at its weekly high after the Fed’s decision to hold interest rates unchanged, aligning with market expectations. However, Jerome Powell’s hawkish post-FOMC statement signaled that the central bank is in no rush to cut rates until inflation declines and the job market softens. This stance exerted pressure on Wall Street amid concerns over prolonged high borrowing costs. In contrast, the Bank of Canada (BoC) cut rates by 25 basis points to 3%, weighing on the Canadian dollar.

In the commodity market, gold remains volatile as the Fed’s hawkish stance looms, while oil prices hold near recent highs. However, the long-term outlook for oil remains bearish, with Trump’s administration pushing for increased supply alongside the Fed’s restrictive policy. Meanwhile, Bitcoin has rebounded above $103,000 after briefly dipping below $100,000, supported by strong trading volume, suggesting a bullish short-term outlook.

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Current rate hike bets on 19th March Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (77.0%) VS -25 bps (23%)

Market Movements

DOLLAR_INDX, H4

The U.S. dollar held firm after the FOMC’s decision to keep interest rates unchanged, in line with market expectations. Additionally, Fed Chair Jerome Powell’s hawkish remarks following the announcement reinforced the dollar’s strength, signalling that rate cuts are unlikely until inflation shows a clear decline and the labour market softens.

The Dollar Index has returned to the critical liquidity zone at near 10.8 after dipping to its one-month low. The RSI has climbed to above the 50 level, while the MACD is poised to break above the zero line, suggesting that the bearish momentum has vanished. 

Resistance level:109.80, 111.60

Support level: 106.80, 105.75

XAU/USD, H4

Gold prices have been trading sideways, pressured by the Fed’s hawkish stance on future monetary policy, which has added volatility to the precious metal. However, gold remains firm near recent highs as market uncertainty persists, driven not only by Trump’s policy agenda but also by concerns over China’s DeepSeek AI development, which has unsettled Wall Street and fueled demand for safe-haven assets.

Gold prices remain supported at above their long-term support level, suggesting a bullish bias for gold. The RSI remains above the 50 level, while the MACD has been sideways lately, suggesting a neutral signal for gold. 

Resistance level:  2788.00, 2830.00

Support level: 2720.00, 2689.00

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EUR/USD，H4

The EUR/USD pair has broken below its uptrend support level, signaling a bearish bias as the strengthening U.S. dollar gains momentum following the Fed’s hawkish stance in the latest FOMC decision. Euro traders are now focused on today’s Eurozone GDP data and the ECB’s interest rate decision, with expectations of a continued rate cut. If the ECB meets these expectations, the pair could face further downside pressure.

The EUR/USD has declined by 1% from its recent peak and has dropped below the uptrend support level, suggesting a bearish bias for the pair. Should the pair fail to defend above its short-term support level at 1.0400, it may be a bearish signal for the pair. The RSI has declined from near the overbought zone while the MACD is about to break below the zero line, suggesting that a bearish momentum is forming. 

Resistance level: 1.0458, 1.0530

Support level: 1.0345, 1.0230

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AUD/USD，H4

The recent strengthening of the U.S. dollar has led the pair to trade in a downtrend since the beginning of the week. However, the pair found support above the 61.8% Fibonacci retracement level, suggesting a potential technical rebound. On the fundamental side, Australia’s CPI came in below market expectations, which has weighed on the Aussie dollar and could lead to a continuation of the pair’s downtrend.

The AUD/USD pair has rebounded above the 61.8% Fibonacci retracement level, suggesting a potential short-term technical rebound. The RSI is hovering below the 50 level, while the MACD has dipped below the zero line, suggesting that bearish momentum is forming. 

Resistance level: 0.6275, 0.6345

Support level: 0.6205, 0.6130

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Nasdaq, H4: 

Nasdaq has managed to recover from the sharp decline caused by the “DeepSeek threat,” but the tech-heavy index continues to face headwinds. The recovery paused in the last session, with the index negatively impacted by the Fed’s hawkish stance, as it remains determined to keep interest rates high to tackle inflation. Additionally, disappointing earnings from both Microsoft and Meta Platforms have further hindered the index, stopping its previous technical rebound.

Nasdaq has yet to reach its previous high after its sharp decline in the earlier session, suggesting a bearish bias for the index. The RSI remains low, while the MACD is moving toward the zero line from above, suggesting that the bullish momentum is vanishing. 

Resistance level: 21810.00, 22140.00

Support level: 21200.00, 20765.00

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Gasoline (GAS), H4

Gasoline prices have been on a downtrend for the past two weeks, falling by more than 6% from their recent peak. The EIA reported that gasoline stockpiles are now at a one-year high, indicating ample supply in the market. Additionally, Russia’s decision to extend gasoline exports and refine more crude domestically could further increase global gasoline supply, which may put additional downward pressure on gasoline prices.

Gasoline prices have dropped from their previous FVG,suggesting a bearish bias for gasoline. The RSI has been keeping below the 50 level while the MACD has kept below the zero line, suggesting that gasoline remains trading with bearish momentum. 

Resistance level: 2.0735, 2.1125

Support level: 2.0010, 1.9765

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