January 2025 saw continued market recalibration following Donald Trump’s inauguration, with monetary policy shifts, trade policy uncertainty, and evolving risk appetite driving asset class performance. Below is an updated analysis incorporating the latest macroeconomic developments and market trends.
In this comprehensive asset class summary, we break down the key market movements in December, highlight the best and worst performers, and provide insights into how macroeconomic events shaped trading outcomes. Our detailed analysis offers a snapshot of market trends and performance metrics, empowering traders with actionable insights for the months ahead.
Asset Class Summary
Forex
In January 2025, the U.S. dollar exhibited notable strength, appreciating against major currencies. This appreciation was driven by the Federal Reserve’s hawkish pause on interest rates and reduced expectations for aggressive rate cuts throughout the year. The DXY index rose 1.8%, with EUR/USD falling to 1.0450 (-2.3%) and USD/JPY climbing to 152.50 (+3.1%). The GBP/USD also faced pressure, declining 1.5% amid ongoing recession risks in the UK.
Indices
U.S. blue-chip indices experienced volatility in January 2025, with the S&P 500 declining by 1.8% as tariff concerns overshadowed optimism surrounding economic growth. The Dow Jones Industrial Average fell 2.1%, while the Nasdaq 100 decreased by 1.3%. In contrast, European markets showed mixed results; the DAX gained 0.7% due to discussions around potential ECB stimulus, while the FTSE 100 dropped 1.9% amid currency fluctuations.
Commodities
Commodity markets faced challenges in January 2025, particularly due to the strengthening U.S. dollar, which made dollar-denominated commodities more expensive for holders of other currencies. Brent crude stabilized near $82/barrel, reflecting a slight decline of 0.4%, while gold prices rose by 3.8% to reach $2,140/oz as real yields softened and safe-haven demand increased. Industrial metals like copper fell 2.1% due to concerns over slower growth in China.
Cryptocurrencies
Cryptocurrency markets in January 2025 were characterized by heightened volatility and significant gains. Bitcoin surged to a record high of $115,400, reflecting a robust increase of 14.5%, driven by substantial inflows into spot Bitcoin ETFs totalling $4.2 billion for the month. Ethereum also performed well, gaining 18.3%, as anticipation built around a potential SEC decision on spot ETFs.
January marked a promising beginning to the new year for our trading signals, delivering a positive return of 12.66% with a maximum drawdown of 9.28%. This success extended the strong gains we experienced in December 2024. The increased volatility allowed our analysts to identify trade setups with excellent risk/reward ratios. Favorable price movements enabled several trade ideas to reach their initial and secondary targets throughout the month. These conditions have been beneficial for our strategy, and we expect this momentum to provide a solid foundation for early 2025, enabling us to continue offering high-quality results for traders.
The simulated performance statistics provided are based on the assumption of risking 1% of trading capital per trade. It is crucial to understand that past performance, whether actual or simulated, is not indicative of future results.
12 month simulated performance statistics
| Feb 24 | Mar 24 | Apr 24 | May 24 | Jun 24 | Jul 24 | Aug 24 | Sep 24 | Oct 24 | Nov 24 | Dec 24 | Jan 25 |
| 40.86% | 5.88% | 10.92% | 15.15% | -2.77% | -7.69% | -8.92% | 20.16% | -18.47% | -15.68% | 27.29% | 12.66% |
FX Crosses delivered the strongest performance this quarter with a return of 11.45%, the highest win rate of 52.48%, and the lowest drawdown of -3.09%. FX Majors followed, achieving a return of 4.43% with a win rate of 46.03% but faced the largest drawdown among all asset classes at -9.43%. Cryptocurrencies posted a positive return of 1.55%, with a win rate of 41.38% and a moderate drawdown of -4.51%. Commodities, while generating a smaller return of 2.68%, had a win rate of 44.87% and a drawdown of -8.53%. Indices underperformed this quarter, delivering a negative return of -3.85%, a win rate of 44.32%, and a drawdown of -5.78%.
| Asset Class | Trades | Win Rate | Returns | Drawdown |
| FX Majors | 63 | 46.03% | 4.43% | -9.43% |
| FX Crosses | 101 | 52.48% | 11.45% | -3.09% |
| Commodities | 78 | 44.87% | 2.68% | -8.53% |
| Indices | 88 | 44.32% | -3.85% | -5.78% |
| Cryptocurrencies | 29 | 41.38% | 1.55% | -4.51% |
The chart below illustrates the differing conditions between the Dollar Index (Blue) and the S&P 500 Index (Black). We observe an inverse relationship between these two markets, with price fluctuations occurring in both directions. The indices experienced increased volatility due to the new Presidential administration's takeover, making them particularly sensitive to news and unpredictable announcements following the inauguration. While the currency markets also faced turbulence, our analysts were more successful in forecasting FX outcomes compared to the global indices we monitor. Overall, we achieved a 15.88% return in the FX markets, contrasting with a negative return of -3.85% in indices.
AUDUSD delivered the highest return at 6.66%, with a solid win rate of 66.67% across 12 trades, primarily short positions (10 short vs. 2 long), while maintaining a drawdown of -3.02%.
PALLADIUM followed closely, achieving a return of 5.76% with a win rate of 56.25% across 16 trades, showing a strong bias toward long positions (13 long vs. 3 short) but with a slightly higher drawdown of -3.20%.
GBPNZD also performed well, with a return of 4.53% and a strong win rate of 75.00% over 4 trades, predominantly long positions (3 long vs. 1 short), with no drawdown.
Overall, AUDUSD led in terms of returns and consistency, while PALLADIUM and GBPNZD showcased strong performances with favourable win rates and controlled risk exposure.
| Best | Trades | Long | Short | Win Rate | Returns | Drawdown |
| AUDUSD | 12 | 2 | 10 | 66.67% | 6.66% | -3.02% |
| PALLDIUM | 16 | 13 | 3 | 56.25% | 5.76% | -3.20% |
| GBPNZD | 4 | 3 | 1 | 75.00% | 4.53% | -0.00% |
PLATINUM was the weakest performer, delivering a negative return of -6.39% with a low win rate of 23.08% across 13 trades, all of which were short positions, and a high drawdown of -6.35%, reflecting significant challenges in bearish strategies.
COPPER also struggled, posting a return of -3.88% with a win rate of 20.00% over 10 trades (4 long vs. 6 short), and a nearly matching drawdown of -3.83%.
GBPUSD recorded a return of -3.49%, a win rate of 16.67%, and a drawdown of -2.51% over 6 trades (2 long vs. 4 short), showing difficulty in achieving positive momentum.
Overall, these assets demonstrated low win rates, negative returns, and significant drawdowns, underscoring challenging market conditions and elevated risks.
| Worst | Trades | Long | Short | Win Rate | Returns | Drawdown |
| GBPUSD | 6 | 2 | 4 | 16.67% | -3.49% | -2.51% |
| COPPER | 10 | 4 | 6 | 20.00% | -3.88% | -3.83% |
| PLATINUM | 13 | 0 | 13 | 23.08% | -6.39% | -6.35% |
AUDUSD delivered the strongest overall performance, even though the price action was mostly flat throughout the month. The analyst in charge excelled in short trades, aligning with the prevailing long-term trend. Conversely, the performance of Platinum fell short of expectations. The metal moved higher in January, contrary to its bearish long-term trend. The analyst did not anticipate this reversal and chose to sell during the strength, which turned out to be an incorrect strategy in this instance.
Major Macroeconomic Data
Here is a snapshot of how our trade ideas performed on the day of key macroeconomic data.
| Event | Date | Trades Triggered | Win Rate | Return |
| Non Farm Payrolls | 10/01/2025 | 11 | 27.27% | -4.58% |
The January Non-Farm Payrolls report surpassed expectations, with an actual figure of 256K against a forecast of 155K. This robust data caused a notable increase in the US Dollar, which was already on an upward trend before the release but appeared vulnerable to a downward correction. We were somewhat surprised by the significant forecast beat. While we saw substantial gains in Palladium, other markets offered minimal positive returns.
| Event | Date | Trades Triggered | Win Rate | Return |
| US CPI (YoY) | 15/01/2025 | 20 | 50.00% | 6.29% |
The US CPI data exceeded expectations, and before its release, the US Dollar experienced a sharp decline, which swiftly reversed upon the announcement. We executed a significant number of trades that day, achieving substantial gains in EURUSD, Palladium, Natural Gas, EURGBP, GBPCHF, and XRP.
| Event | Date | Trades Triggered | Win Rate | Return |
| US Interest Rate Decision | 29/01/2025 | 22 | 59.09% | 3.39% |
The US Interest Rate decision met expectations, but as usual, the nuances of the press conference were crucial. Despite the US Dollar's relatively stable price, we initiated a significant number of trades. We experienced notable success with Litecoin, Palladium, Bitcoin, CHINA A50, FTSE, EURCHF, GBPJPY, and SP500.
Our team of expert analysts conducts daily market evaluations to identify high-quality trading opportunities. Each analyst brings a unique perspective, leveraging their extensive experience to produce accurate market forecasts. In January, our trade of the month centered on AUDUSD. Noticing the persistent downtrend affecting the pair in recent months, our analyst identified a corrective upward move that seemed unsustainable, presenting a chance to counter the short-term rise. Predicting a failure at the previous swing high, they employed classical technical analysis to pinpoint precise entry and exit points. This strategic method underscores our team's capability to anticipate potential market reversals, which, although risky, can offer significant rewards when successful.
Here's a graphical depiction illustrating the trade setup and the analytical process behind AUDUSD.
AUDUSD reached our targeted entry point at 09:02 (UK) with a drawdown of 3.3 pips. The price swiftly declined from the peak of 0.6288. Selling pressure increased after a series of executive orders from President Trump, significantly boosting the dollar. This sharp decline pushed AUDUSD towards our take profit targets for the day. However, the trade did not achieve the intended take profit level of 0.6205 within the expiration period. The pair closed at 0.6231 (21:00 UK), resulting in a profit of 54 pips or 2.68R.
Following Trump's inauguration, the US Dollar exhibited considerable strength, causing other currencies to depreciate against it. While our trade setup didn't hit its intended target within the specified timeframe, the price eventually reached the first target of 0.6205 at 11:31 (UK) on January 8, 2025. Subsequently, the pair hit the second target of 0.6190 just 9 minutes later at 11:40 (UK) as the selling pressure continued.
Published: 06:50 UK (7th January 2025)
Triggered at: 09:02 UK (7th January 2025)
Exit at: 21:00 UK - Expiry Time (7th January 2025)
Duration: 14 Hours and 10 minutes
Outcome: 2.68R
January 2025 marked a significant start to the year as markets adjusted to new macroeconomic realities, including Donald Trump’s inauguration and evolving monetary policy. Despite challenges like dollar strength and volatility in indices, traders found opportunities in various asset classes, with FX markets and cryptocurrencies standing out as top performers.
Our trading signals delivered strong results, with a 12.66% return in January and momentum carried over from December’s gains. Asset class highlights included AUDUSD’s robust performance, Bitcoin’s record surge, and gold’s resilience amid market uncertainty. On the flip side, Platinum and Copper faced headwinds, demonstrating the need for caution in certain markets.
As we look ahead, the year is poised to offer exciting opportunities for traders. Elevated volatility and a clear focus on macroeconomic trends provide fertile ground for identifying trade setups with strong potential. Building on recent successes, we remain committed to delivering actionable insights and high-quality signals to help traders navigate the months ahead with confidence.
Thank you for your continued trust in Acuity Trading. Stay tuned for more updates and insights in the coming months.