DeepSeek Euphoria Propels HSI

● The Hang Seng Index jumped at today's opening after recovering from a technical retracement last week.

● The U.S. Dollar was pushed to a new low as it was hammered by last Friday's soft Retail Sale reading.

● XRP surged last week on renewed optimism of the XRP-ETF launch.

Market Summary

Wall Street struggled for direction as risk appetite remained muted, with several asset classes trading subdued. However, Hong Kongs Hang Seng Index bucked the trend, surging over 300 points at the start of the week as capital poured into the local equity market, fueled by DeepSeek euphoria.

In the forex market, the U.S. dollar remained under heavy downside pressure, pushing the Dollar Index to a fresh two-month low. Last Fridays weaker-than-expected Retail Sales data added to the dollar's woes, reinforcing market concerns about slowing economic momentum. Traders now shift their focus to the upcoming RBA and RBNZ interest rate decisions, scheduled for Tuesday and Wednesday, respectively. The Reserve Bank of Australia is widely expected to initiate its easing cycle with a 25 bps rate cut, a move that could weigh on the Australian dollar.

In the commodity market, gold prices plunged more than 1.5% last Friday, retreating from their all-time highs. Beyond profit-taking, sentiment was further dampened by the peace talks in Saudi Arabia, which could lead to a resolution of the prolonged Russia-Ukraine conflict. Meanwhile, oil prices struggled to find traction, with WTI hovering near $70.35. Crude prices remain sensitive to geopolitical developments and could react sharply to any progress in the Saudi-led peace negotiations.

In the crypto space, Bitcoin (BTC) and Ethereum (ETH) continued to trade sideways amid a lack of clear catalysts. However, XRP surged 14% last week after the U.S. SEC acknowledged that XRP ETF applications are under review, fueling optimism about potential institutional adoption.

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

Source: CME Fedwatch Tool

0 bps (98%) VS -25 bps (2%)

Market Movements

DOLLAR_INDX, H4

Global risk appetite improved as markets closely monitored the potential for a ceasefire deal between Russia and Ukraine. Former U.S. President Donald Trump commented that he and Russian President Vladimir Putin had agreed to initiate negotiations for peace, suggesting a shift in geopolitical expectations. This development led to a retreat in safe-haven assets such as the U.S. dollar, as investors shifted their focus toward higher-risk assets.

The Dollar Index is trading lower while currently testing the support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 26, suggesting the index might enter oversold territory.

Resistance level: 107.95, 108.90

Support level: 107.05, 106.45

XAU/USD, H4

Gold prices dropped sharply, driven by speculation over a potential ceasefire deal between Russia and Ukraine. As investors moved toward higher-risk assets, demand for gold waned. However, the outlook remains uncertain, with key risks such as potential tariffs by President Trump and upcoming market-moving events, including Fed meeting minutes and Trumps speeches, keeping the possibility of a gold rebound alive.

Gold prices are trading lower while currently testing the support level. Nonetheless, MACD has illustrated diminishing bearish momentum, while RSI is at 42, suggesting the commodity might extend its gains since the RSI rebounded sharply from oversold territory.

Resistance level: 2915.00, 2935.00

Support level: 2880.00, 2855.00

GBP/USD，H4

The British pound extended its gains against the softening U.S. dollar, with GBP/USD surging to its highest level in 2025. Sterling's strength was underpinned by stronger-than-expected GDP and Retail Sales data, reinforcing optimism about the UK economy's resilience. Meanwhile, the dollar came under renewed pressure as shifting market sentiment eroded confidence in the greenback. Persistent concerns over U.S. economic stability and the prospect of a less hawkish Fed further weighed on the dollar, paving the way for GBP/USD to sustain its upward trajectory in the near term.

GBP/USD surged sharply after the pair traded above its critical resistance level at 1.2500. The RSI continued to gain, while the MACD edged higher after breaking above the zero line, suggesting that the pair's bullish momentum remained strong.

Resistance level: 1.2730, 1.2850

Support level: 1.2485, 1.2375