Trump calls for Fed to cut interest rates, gold hits new high, EU delays countermeasures

On March 21, early trading in Asian market on Friday, Beijing time, the US dollar index hovered around 103.82. On Thursday, the US dollar index reached the 104 mark at the beginning of the U.S. session, hitting a new high in the past two weeks, and finally closed up 0.331% to 103.81. Most U.S. Treasury yields closed lower, the yield curve continued to steeper, with the benchmark 10-year U.S. Treasury yields closed at 4.235%; the two-year U.S. Treasury yields, which are more sensitive to monetary policy, closed at 3.974%. Spot gold fell back after hitting an all-time high of $3057.25/ounce earlier in the session, and finally closed down 0.09% at $3044.73/ounce. Spot silver fell for the second consecutive day and finally closed down 0.64% at $33.57 per ounce. International oil prices rose as the United States issued new sanctions on Iran. WTI crude oil continued to rise during the US session, rebounding above the 68 mark, and finally closed up 1.94% at $68.32 per barrel; Brent crude oil closed up 1.81% at $71.84 per barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovers around 103.82. 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 Baoaihuaforex.comEr said that the risk of a recession is still relatively low at present, but 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 closest resistance level of the US dollar index is in the range of 104.30–104.50. A breakout above the 104.50 level will push the US dollar index toward the next resistance level 105.50–105.70.

Euro: As of press time, the euro/dollar hovers around 1.0853. The euro/dollar fell for the second straight day, down one-fifth of 1% on Thursday as the market continued to step up the safe haven dollar as tensions around U.S. tariffs remain fermenting. Fed Chairman Jerome Powell downplays the economic traps posed by U.S. President Donald Trump’s tariff threats that appear to exist in a quantum state where they exist and do not exist at the same time. According to Fed Chairman Powell, downside risks are certainly increasing due to the ongoing tariff threat, but Fed policymakers continue to insist that U.S. economic data remains healthy, albeit below recent highs. Technically, if the EUR/USD remains below the 1.0850 level, it will move towards the support level of 1.0760–1.0775.

GBP: As of press time, GBP/USD is hovering around 1.2960. The GBP (GBP) depreciated against the US dollar (USD) after the Bank of England (BoE) decided to keep interest rates unchanged and warned that interest rates could be cut due to “high current economic uncertainty”. Technically, the GBP/USD appears to have peaked around 1.3000. Thursday’s price movement formed a “bearish engulfing” candlestick chart pattern, indicating that buyers are reducing risks while sellers are starting to enter, driving spot prices down. Technically, if GBP/USD successfully closes below support level 1.2935–1.2950, ​​it will move to the next support level 1.2810–1.2830.

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On Friday, gold trading around 3043.37. Gold prices fell on Thursday as bulls took a breath after the latest monetary policy decisions from the Federal Reserve and the escalation of hostilities in the Middle East. Although the Fed held interest rates unchanged for the second consecutive meeting, gold traders failed to push up prices. Officials added that they will slow down quantitative tightening(QT) pace.

Technical: The upward trend of gold remains unchanged and is ready to expand its gains and challenge the $3,100 figure. Precious metals have hit an all-time high of $3,052, breaking the psychological barrier of $3,050, but it lacks the strength to decisively aim to reach new milestones. The Relative Strength Index (RSI) turned over to overbought, but it was still close to reaching the 80 level due to the strength of the uptrend. Conversely, if gold falls below $3,000, the first support level will be the February 20 high of $2,954, followed by the $2,900 mark.

2) Analysis of crude oil market trends

On Friday, crude oil trading was around 68.34. Affected by the United States' increased restrictions on crude oil exports to Iran, international oil prices have increased pressure on Tehran in negotiations on the new nuclear agreement. 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 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. Meanwhile, the Trump administration plans to extend Chevron Corp.'s operating license in Venezuela for at least 30 days, temporarily alleviating market concerns about supply shortages.

Technical: Prices rose as the United States recently imposed new Iran-related sanctions on an independent refinery in China and ships used to transport oil. If WTI crude oil closes above $68.00, it will move towards the $70.00 level. RSI is in a mild area and there is enough room to gain momentum in the short term.

Forex market trading reminder on March 21, 2025

17:00 Eurozone January seasonally adjusted current account

19:00 UK March CBI industrial order difference

19:00 UK March CBI retail sales difference

20:30 Canada January retail sales monthly rate

21:05 Fed Williams delivered a speech

23:00 Eurozone March consumer confidence index initial value

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