Dollar Subdue Ahead of Tomorrow PCE

• Optimistic Nvidias earnings forecast boosted its share prices and may fuel Nasdaq's upward momentum.

• The dollar continues to struggle as the U.S. treasury yield continues to slide.

• BTC faced intense downside pressure and slid to below the $86,000 mark.

Market Summary

The market had its attention on Nvidia‘s earnings report, which was released after market close. The company’s optimistic forecast fueled a strong post-market rally in its share price, potentially setting the stage for a broader rebound in the U.S. equity market. Investors are now awaiting todays U.S. GDP data, which could provide further direction. While Wall Street has remained subdued and largely directionless, the Hang Seng Index (HSI) has shown strong bullish momentum, breaking above the 24,000 mark for the first time since 2022, signaling renewed investor confidence in Chinese equities.

In the foreign exchange market, the U.S. dollar continues to struggle, pressured by lackluster U.S. Treasury yields and fading investor confidence. The dollar index remains below the key 107.0 level, reinforcing a bearish bias for the greenback. Meanwhile, geopolitical developments remain in focus, with Ukrainian President Zelenskyy scheduled to meet with U.S. President Trump on Friday. Any positive developments from this meeting could help ease geopolitical tensions in the region, reducing safe-haven demand for gold and oil.

In the crypto space, digital assets remain under significant selling pressure. Bitcoin has slipped to a new low below $86,000, while Ethereum has fallen to its lowest level since last October. The sector continues to face headwinds, particularly in the wake of the recent Bybit hack, which has shaken market confidence in digital asset security.

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

Source: CME Fedwatch Tool

0 bps (95%) VS -25 bps (5%)

Market Movements

DOLLAR_INDX, H4

The Dollar Index remains below its previous high and the Fair Value Gap (FVG) zone, signaling a bearish bias for the greenback. While U.S. long-term Treasury yields remain elevated, a potential decline in yields could further weigh on the dollar‘s strength. Market participants are closely watching today’s U.S. GDP release, with expectations pointing toward signs of economic contraction. If the data confirms a slowdown, it could add further downside pressure on the dollar, reinforcing its current bearish trajectory.

The Dollar Index has been subduing, but it remains trading in a lower-high price pattern, suggesting a bearish bias for the pair. The RSI remains below the 50 level, but the MACD is forming a higher high, suggesting that the bearish momentum is easing.

Resistance level:107.35, 108.40

Support level: 105.50, 103.70

XAU/USD, H4

Gold prices have broken below the Fair Value Gap (FVG) and reached a new low in the recent session, reinforcing a bearish bias. If gold once again fails to sustain above the psychological support level of $2,900, it may continue its bearish trajectory. Meanwhile, the improving relationship between the U.S. and Russia, along with ongoing efforts to resolve the prolonged Ukraine-Russia conflict, could further reduce safe-haven demand for gold. Any positive developments on this front may accelerate golds decline as risk appetite strengthens in the broader financial markets.

Gold prices have slid below the critical $2900 mark after being capped at below the $2955 mark, suggesting a potential bearish trend reversal for gold. The RSI continues to slide while the MACD has gotten below the zero line, suggesting that bearish momentum is forming.

Resistance level: 2955.00, 3007.00

Support level: 2874.50, 2834.40

USD/JPY, H4:

USD/JPY continues to trade along its downtrend resistance level, indicating a bearish bias for the pair. Market sentiment remains tilted in favor of the Japanese Yen after a top Japanese financial official hinted that the Bank of Japan may share a similar view on an upcoming rate hike, reinforcing expectations of a more hawkish policy stance. Meanwhile, the U.S. dollar remains under pressure, and if todays U.S. GDP reading falls short of expectations, it could further weigh on the pair, accelerating its decline.

USD/JPY is resisting below the downtrend resistance line, which suggests a bearish bias for the pair. The RSI remains at the lower levels, while the MACD continues to flow below the zero line, suggesting that the pair remains trading with bearish momentum.

Resistance level: 151.35, 154.00

Support level: 146.95, 143.80