Dovish Fed Pressures Dollar 

* The dollar Index (DXY) continues to plunge due to persistent dovish messages from Jerome Powell.

* Gold prices continue to break their all-time high level and currently face strong resistance at the $2160 mark.

* BTC has rebounded and is back to $67000 territory.

---

Fundamental Overview

In recent market developments, the U.S. dollar is facing downward pressure, responding to signals of an imminent shift in the Federal Reserve’s monetary policy. Federal Reserve Chair Jerome Powell’s recent testimony, expressing confidence in U.S. inflation aligning with the central bank’s target rate, has contributed to this trend. Consequently, gold prices have surged to an all-time high, reaching $2160. 

On a parallel front, the European Central Bank (ECB) has opted to maintain its interest rates at the current levels, aligning with market expectations. This decision, coupled with the potential divergence in the monetary policy trajectory from the Federal Reserve, has fortified the euro’s position against the dollar. 

In the cryptocurrency sphere, Bitcoin (BTC) demonstrated resilience by reclaiming its position in the $67,000 range subsequent to a significant drop earlier in the week. This fluctuation in BTC’s value is attributed to robust profit-taking sentiments temporarily overshadowing the prevailing bullish momentum within the crypto market. 

---

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

Source: CME Fedwatch Tool

0 bps (95%) VS -25 bps (5%) 

Market Overview

(MT4 System Time)

Source: MQL5 

Market Movements

DOLLAR_INDX, H4

The Dollar Index has undergone a substantial decline for a second consecutive session. This can be attributed to the messaging from the Federal Reserve chief during the testimony, indicating that the U.S. central bank is approaching its targeted inflation rate of 2%, and the Fed is on the verge of adjusting its monetary tightening policy. This development has heightened speculation about a potential rate cut in June, significantly impacting the strength of the dollar, causing it to depreciate.

The dollar index has broken another support level, suggesting the dollar is trading with strong bearish momentum. The Relative Strength Index (RSI) has broken into the oversold zone, while the Moving Average Convergence Divergence (MACD) is moving lower and diverging, suggesting the bearish momentum is gaining.

Resistance levels: 103.70, 104.50

Support levels: 102.00, 101.35

---

XAU/USD, H4

Gold prices are sustaining their bullish rally and are currently testing another resistance level at the $2160 mark. The surge in gold prices is primarily attributed to the weakening of the dollar, influenced by the dovish message delivered by Jerome Powell during the testimony. However, the prevailing optimism in equity markets and the cryptocurrency market suggests a growing risk appetite among traders, which could potentially limit the continued rally of gold.

Gold prices have been trading with strong bullish momentum but are currently held near $2160, another resistance level. The Relative Strength Index (RSI) remains in the overbought zone this week, while the Moving Average Convergence Divergence (MACD) flows flat at elevated levels, suggesting the bullish momentum is easing.

Resistance levels: 2190.00, 2210.00

Support levels: 2140.00, 2117.90

---

CL OIL, H4

Oil prices have faced challenges in sustaining upward momentum, despite factors that traditionally might boost prices, such as the easing strength of the dollar and potential dovish policy shifts from the Federal Reserve. However, there was a slight rebound in oil prices in the latest trading session, attributable to a temporary supply disruption. A critical pipeline, which facilitates the transport of oil from Canada to the U.S., experienced a temporary shutdown, causing a brief uptick in prices due to the immediate impact on supply.

Oil prices have found support at their crucial liquidity zone at near $78.70. The Relative Strength Index (RSI) hovering near the 50 level while the Moving Average Convergence Divergence (MACD) flowing flat close to the zero line suggests a neutral signal for oil.

Resistance levels: 81.20, 84.10

Support levels: 78.65, 75.20

---