Dollar Hammers By Lower GDP

* U.S. GDP came short, putting pressure on the dollar’s Strength.

*The market is waiting for today’s PCE reading to gauge the dollar’s strength.

*BTC is on the way to reach its all-time high. 

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Fundamental Overview

The Dollar Index experienced significant fluctuations, oscillating within a 0.3% range in the latest session amid diverse economic indicators from the United States. The U.S. GDP growth for the last quarter was reported at 3.2%, missing the anticipated market forecasts. Conversely, the GDP price index was recorded at 1.7%, highlighting ongoing inflationary pressures within the economy. Meanwhile, U.S. equity markets are navigating through a period of uncertainty following a rally propelled by advancements in Artificial Intelligence (AI) technology last week. The market’s focus now shifts towards the forthcoming U.S. Personal Consumption Expenditures (PCE) data, expected later today, which could have a notable impact on equity market dynamics.

In the commodities sector, gold prices are maintaining a steady course, hovering just below the significant resistance level of $2040, indicating a phase of consolidation. On the other hand, oil prices encountered a decline, pressured by unexpectedly high U.S. crude stockpile figures that have sparked concerns over the demand outlook within the United States. In the cryptocurrency arena, Bitcoin (BTC) reached a new high, exceeding $64,000, before experiencing a pullback. Despite this correction, Bitcoin maintains a position above $60,000, underlining the volatile and dynamic nature of the cryptocurrency markets.

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

Source: CME Fedwatch Tool

0 bps (92%) VS -25 bps (8%)  

Economic Calendar

(MT4 System Time)

Source: MQL5 

Market Movements

DOLLAR_INDX, H4

The Dollar Index shows a modest retreat against major currencies, influenced by disappointing US Gross Domestic Product (GDP) data, revealing a decrease from 4.90% to 3.2%. Despite this, the Federal Reserve’s hawkish stance, as communicated by New York Fed President John Williams and Atlanta Fed President Raphael Bostic, indicates a commitment to maintaining a higher interest rate environment. This mixed signal leads to the Greenback continuing its consolidation. The market is eagerly anticipating the upcoming PCE Price Index data for additional insights into inflation and interest rate trajectories.

Currently, the Dollar Index is trading lower and testing a support level. Notably, the Moving Average Convergence Divergence (MACD) signals diminishing bullish momentum, and the Relative Strength Index (RSI) is at 50. This suggests the possibility of the index extending its losses after a breakout, especially as the RSI has sharply retreated from overbought territory.

Resistance level: 104.50, 104.95

Support level: 103.70, 102.90

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XAU/USD, H4

Gold prices have rebounded in response to a weakening US Dollar, driven by lackluster GDP data. The prevailing bullish momentum in the gold market is sustained by the challenges faced by the Greenback. The consolidation phase persists, and attention in the market is now directed towards the imminent US Core PCE Price Index. Investors are staying watchful, looking for cues from this pivotal data to navigate the gold market.

Currently, gold prices are trading higher and testing the resistance level. Notably, the Moving Average Convergence Divergence (MACD) indicates diminishing bearish momentum, and the Relative Strength Index (RSI) is at 55. This suggests the possibility of the commodity extending its gains after a breakout, particularly as the RSI remains above the midline.

Resistance level: 2035.00, 2060.00

Support level: 2015.00, 1985.00

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CL OIL, H4

Crude oil prices experienced a slight retreat following a bearish Energy Information Administration (EIA) inventory report, which disclosed a significant increase from 3.514M to 4.199M, surpassing market expectations. US stockpiles registered a fifth consecutive week of growth, attributed to unplanned refinery outages post a winter storm. Nevertheless, losses are contained as analysts speculate that OPEC+ may consider extending voluntary oil output cuts into the second quarter, acting as a mitigating factor for oil prices.

Presently, oil prices are trading lower, having retraced from the resistance level. Notably, the Moving Average Convergence Divergence (MACD) signals diminishing bullish momentum, and the Relative Strength Index (RSI) stands at 52. This suggests the possibility of the commodity extending its losses, especially as the RSI has sharply retreated from overbought territory.

Resistance level: 78.65, 81.20

Support level: 75.20, 71.35