Gold Retreat after Breaking New High

Market Summary

The market’s attention remained squarely on Federal Reserve Chair Jerome Powell’s semi-annual testimony before the Senate, where he reiterated that the Fed has already cut interest rates by 100 basis points from their peak. Powell emphasized that while the U.S. economy remains resilient, persistent inflationary pressures justify a patient approach to further rate cuts. His hawkish tone bolstered the dollar, with the Dollar Index (DXY) reclaiming ground above the 108.00 mark, reversing its prior bearish trend.

Equities struggled under Powell’s cautious outlook, with all three major U.S. indices trading flat for the week as investors digested the Fed’s stance. Market participants now turn their focus to today’s U.S. Consumer Price Index (CPI) release and the second day of Powell’s testimony for further insights into the Fed’s monetary policy trajectory and the dollar’s price action.

In commodities, gold briefly surged past $2,900 for the first time, driven by strong safe-haven demand, before succumbing to profit-taking, which dragged prices back below the key psychological level. The metal is expected to hover around $2,880 as traders await a fresh catalyst to extend the rally.

Meanwhile, oil prices rebounded sharply, gaining over 3% from recent lows. The surge came as the U.S. intensified sanctions on Russian and Iranian oil, targeting shipments in an effort to maximize pressure on both countries’ exports. Additionally, escalating tensions in the Middle East, exacerbated by disputes over hostage negotiations, further fueled supply concerns and lifted crude prices.

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

Source: CME Fedwatch Tool

0 bps (91.50%) VS -25 bps (8.5%)

Market Overview

Economic Calendar

(MT4 System Time)

Source: MQL5 

Market Movements

DOLLAR_INDX, H4

Federal Reserve Chair Jerome Powell reiterated that the Fed is in no hurry to cut interest rates, emphasizing a patient approach before lowering borrowing costs. Following his testimony, Treasury yields remained elevated, while stocks fluctuated. Market participants largely maintained their expectations, with a first rate cut not fully priced until September and fewer than two cuts projected for 2025. Given the lack of surprises, the U.S. dollar remained flat, testing key support levels.

The Dollar Index is trading lower following the prior retracement from the resistance level. MACD has illustrated increasing bearish momentum, while RSI is at 45, suggesting the index might extend its losses since the RSI stays below the midline. 

Resistance level: 108.35, 109.90

Support level: 107.35, 106.50

XAU/USD, H4

Gold prices retreated due to profit-taking and technical corrections after hitting record highs. Rising U.S. Treasury yields also pressured bullion, as Powell’s comments suggested the Fed may keep rates elevated for longer. However, the long-term outlook for gold remains resilient, especially amid ongoing trade war uncertainties. Investors are now shifting focus to the U.S. Consumer Price Index (CPI) inflation report, which could trigger significant volatility in gold and the dollar.

Gold prices are trading lower while currently testing the support level. MACD has illustrated increasing bearish momentum, while RSI is at 56, suggesting the commodity might extend its losses after breakout since the RSI retreated sharply from overbought territory. 

Resistance level:  2960.00, 3000.00

Support level: 2875.00, 2755.00

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GBP/USD，H4

The GBP/USD pair has recovered from its weekly low but is encountering strong resistance at the 1.2450 level. A decisive break above this threshold could signal a bullish continuation for the pair. However, upside momentum remains fragile as traders brace for today’s U.S. Consumer Price Index (CPI) release. Markets anticipate a strong inflation reading, which could reinforce expectations of a cautious Federal Reserve and strengthen the dollar, limiting further gains for GBP/USD. Adding to the pressure, Fed Chair Jerome Powell is set to conclude his two-day testimony today. Any hawkish remarks reinforcing the Fed’s patient stance on rate cuts could provide further support for the dollar and weigh on the pound’s outlook.

GBP/USD has rebounded and traded past the previous high, suggesting a potential trend reversal for the pair. The RSI is rebounding while the MACD is flirting with the zero line, suggesting that the bearish momentum is vanishing. 

Resistance level: 1.2460, 1.2610

Support level: 1.2375, 1.2300

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EUR/USD，H4

The EUR/USD capitalized on a weaker dollar in the last session, as the Dollar Index (DXY) slipped nearly 0.5%. However, the pair remains constrained below its long-term downtrend resistance, reinforcing its bearish trajectory. Investor sentiment toward the euro has taken a hit following President Trump’s renewed tariff threats targeting the Eurozone, raising concerns over potential trade disruptions. Additionally, the Federal Reserve’s hawkish stance has fueled fears of a widening interest rate differential between the U.S. and the Eurozone, further pressuring the pair. 

EUR/USD has rebounded, but the pair remains in its long-term downtrend trajectory. The RSI is hovering close to the 50 level, while the MACD is also flowing close to the zero line. Both momentum indicators suggest a neutral signal for the pair. 

Resistance level: 1.0458, 1.0594

Support level: 1.0260, 1.0150

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USD/CAD，H4

USD/CAD is expected to rebound, supported by expectations of U.S. dollar appreciation. With the Fed signaling no urgency in cutting interest rates, sentiment remains favorable for the dollar. Meanwhile, Canada faces additional economic pressure from recently announced U.S. trade tariffs, which could weigh on the Canadian dollar. Given dollar strength and potential CAD weakness, USD/CAD remains tilted toward a bullish outlook.

USD/CAD is trading lower while currently testing the support level. MACD has illustrated diminishing bullish momentum, while RSI is at 40, suggesting the pair might extend its losses after breakout since the RSI stays below the midline. 

Resistance level: 1.4450, 1.4595

Support level: 1.4280, 1.4140

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USD/JPY, H4: 

The USD/JPY staged a strong recovery, nearly erasing last week’s losses as the dollar gained momentum on the back of the Federal Reserve’s hawkish stance and renewed trade tariff threats from President Trump. However, speculation over a potential rate hike by the Bank of Japan (BoJ) in March is intensifying, fueled by signs of economic resilience in Japan. Should the BoJ move toward further tightening, downside pressure on the pair could build, capping further gains for the dollar against the yen.

The USD/JPY pair has surged more than 1.5% since Monday, signaling a potential trend reversal. However, the pair faces a critical resistance zone near the 154 mark, where a confluence of the downtrend resistance line and previous support level could cap further upside. Meanwhile, RSI has risen sharply, while the MACD crossover at the bottom indicates fading bearish momentum.

Resistance level: 154.10, 156.25

Support level: 152.20, 149.30

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Crude Oil, H4

Crude oil prices surged to a two-week high, driven by U.S. sanctions on Russian and Iranian oil supplies and escalating Middle East tensions. U.S. measures targeting oil tankers, producers, and insurers have disrupted Russian oil shipments to China and India, while fresh sanctions on Iranian exports have further tightened supply. Despite concerns that trade tariffs could dampen global growth and fuel inflation, supply-side risks continued to support crude prices.

Crude oil prices are trading lower while currently testing the support level. MACD has illustrated diminishing bullish momentum, while RSI is at 62, suggesting the commodity might extend its losses after breakout since the RSI retreated from overbought territory. 

Resistance level: 74.30 75.45

Support level: 72.85, 70.55