The FED’s week has not given any substantial changes to the markets: Bitcoin had tried to take off from the 200-day moving average but failed to cross the area of $87,000, Gold had bounced off the $3050 area, and currency markets have been wobbling in narrow coils without any meaningful development.
Jerome Powell hadn’t surprised the markets, claiming that the FED would monitor for the new information to come in before making any decisions in May. Probabilities of interest rate decline for a quarter a point in June have slightly grown roughly from 50% to 60%.
The rotation in stock markets has started to happen – Hang Seng and Dax indices have tumbled from previously achieved peaks, getting in sync with overall bearish trends of S&P 500 and Nasdaq. Tariffs remain to be the most threatening factor for global markets weighing on sentiment.
CNN’s Fear and greed index remains to indicate low readings for both strength and breadth, but volatility also remains low (VIX is balancing around 20), which makes this market not really bearish in a classical way, but it rather sinks in “ooze”, not being able to move up or down.
Currency markets are probably moving in technical swings, so a short-term rotation of current trends would be logical.
Inflation in Japan was slightly lower than anticipated that pressures the Yen early on Friday, March 21st.
As the FED’s week is over, two next big events in the economic calendar are final GDP for the US on March 27th, and PCE index (FED”s inflation) on Friday, March 28th. Economic agenda is not in the main focus now, as investors are more concerned about political statements, tariffs e t.c. But markets will finally get used to that and focus on the fundamental conditions back again.
Gold
Gold has been the biggest runner in Q1, 2025, pulling in much capital from institutional investors, which was seen in a form of growing open interest for GC futures and increasing net position of commercial traders in Commitment of traders report.
Technically, it might have reached the problematic area for growth: the upper boundary of the Bollinger Bands indicator, with the price action being exhausted at $3050 area.
Price is locked in a narrow coil on the 4-hour chart – a small head-and-shoulders formation: should the price retest the middle area of this formation and fails to proceed higher, it might give a decent opportunity for a short position with a limited risk. Though, it’s a counter-trend situation, so be careful and protect your position at all times!
Crude oil
Crude oil has developed the upswing having hit the neckline of cup-and-handle formation. Currently, the price action is muted, but should the price come to test this area again, it might develop the upswing with a target of $70, as it is still considered a fair price from a supply/demand point of view.
OPEC+ has announced plans for several member countries to reduce output by between 189,000 and 435,000 barrels per day until June 2026 to address previous overproduction and tighten supply, so that’s a bullish factor.
Demand from China has slightly decreased, but the situation looks balanced for now and technical factor would probably dominate the action.
