The dollar hovers above 104, the Fed sends an important signal

On March 24, early trading in the Asian market on Monday, Beijing time, the US dollar index hovered around 104.03. Last Friday, the U.S. dollar index recorded its weekly gains for the first time this month, eventually closing up 0.34% to 104.15 as Fed officials said they were not in a hurry to cut interest rates. The benchmark 10-year U.S. Treasury yield closed at 4.2580%; the two-year U.S. Treasury yield closed at 3.9670%, which is more sensitive to monetary policy. Affected by the strengthening of the US dollar and the profit-taking of investors, spot gold fell below the US $3,000 mark for a time, pulling back about $40. However, due to the lingering uncertainty in geopolitics and the US economy, it finally recovered the 3020 mark and closed down 0.71% to $3,022.79/ounce. Spot silver finally closed down 1.57% at $33.02 per ounce. International oil prices have fallen slightly due to market concerns about global economic growth and tariff risks. WTI crude oil closed down 0.09% at $68.25 per barrel; Brent crude oil closed down 0.15% at $72.13 per barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovers around 104.03. The Federal Reserve kept interest rates unchanged and reiterated its forecast for two rate cuts in 2025. Federal Reserve Chairman Powell downplayed the impact of tariffs on inflation, saying it was only temporary, but admitted that it was difficult to assess its broader impact. Although Powell said the risk of a recession is still relatively low at present, the risk of a recession is still rising. The number of initial unemployment claims in the United States was lower than expected, pushing the dollar to break through 104.00. Technically, the most recent resistance level of the US dollar index is 104.30–104.50interval. A breakout above the 104.50 level will push the US dollar index to the next resistance level, which is in the 105.50–105.70 range.

Euro: As of press time, the euro/dollar hovers around 1.0835. The currency pair puts pressure on the US dollar (USD) driven by President Donald Trump's trade policy, driven by concerns about the U.S. economy. Investors are now paying attention to preliminary March Purchasing Managers Index (PMI) data for the euro zone, Germany and the United States, to be released later that day. Technically, if the EUR/USD falls below the support level of 1.0760–1.0775, it will move to the next support level of 1.0630–1.0650.

GBP: As of press time, GBP/USD is hovering around 1.2933. The GBP fell about 0.29% against the US dollar (USD) last Friday and is expected to remain unchanged this week after monetary policy decisions by major central banks were dominated by the Federal Reserve (Fed) and the Bank of England (BoE). As of press time, GBP/USD was traded at 1.2931, hitting a daily high of 1.2969. The UK economic schedule will include the Consumer Price Index (CPI) and a Spring Budget Statement. At the same time, the Fed's preferred inflation indicator, the core personal consumption expenditure (PCE) price index, will also attract attention. Technically, if GBP/USD closes below the 1.2900 level, it will move towards the next support level 1.2810–1.2830.

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On the Asian session on Monday, gold trading around 3022.37. Precious metals fell slightly after hitting an all-time high on Thursday due to hopes for a peace deal in Ukraine. However, potential interest rate cut signals from the Federal Reserve (Fed) and ongoing economic uncertainty may limit the upside potential of gold. Ukrainian and U.S. officials held talks in Riyadh, Saudi Arabia on Sunday to resume efforts to end the three-year war as President Donald Trump pushes for a ceasefire. Ukrainian Defense Minister Rustem Umerov said the weekend's discussions were "productive and focused".

Technical: Last Friday, the Relative Strength Index (RSI) on the daily chart slightly fell below 70, indicating that the recent retracement was a technical pullback, not the beginning of a bearish reversal. In addition, gold is still in the third placewithin the month's upward channel. If the gold price confirms that $3030/oz (middle point of the upward channel) is the resistance level, it may continue the correction and fall to $3000/oz (integral level). Gold's daily closing price below the latter support level may attract technology sellers and open the door for gold prices to fall further to $2960-2950 per ounce (lower limit of the upward channel, 20-day simple moving average). On the upside, short-term resistance seems to have formed at $3050 per ounce (static level). If gold prices stabilize above this level, $3,100 per ounce (upper limit of the upward channel, psychological level) may be set as the next bullish target.

2) Analysis of crude oil market trends

On Monday, the market near crude oil trading at 68.17 was drawing strength from new geopolitical risks and the supply discipline of major producers restarting, which strengthened bullish sentiment despite the general downward trend of moving averages. The U.S. Treasury Department imposed sanctions on a Chinese refinery and its CEO accusing it of buying Iranian crude oil. In addition, the United States has also sanctioned several tankers suspected of belonging to the "Shadow Fleet". These ships are accused of specializing in transporting Iranian crude oil and evading international sanctions.

Technical: Crude oil rebounded from intraday lows as traders remained concerned about new sanctions related to Iran and the OPEC+ plan to cut production for member countries that had previously exceeded quotas. If WTI oil prices close above the recent high of $68.70, it will move towards an important psychological level of $70.00.

Forex market trading reminder on March 24, 2025

①To be determined Russian and Ukrainian delegations met with the US delegation respectively

②16:15France March manufacturing PMI preliminary value

③16:30Germany March manufacturing PMI preliminary value

④17:00Eurozone March manufacturing PMI preliminary value

⑤17:30 UK March manufacturing PMI Initial value

⑥17:30 The initial value of the UK service industry PMI in March

⑦21:45 The initial value of the US S&P Global Manufacturing PMI in March

⑧21:45 The initial value of the US S&P Global Service Industry PMI in March

⑨The next day, the Bank of England Governor Bailey made a speech

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