Market Overview
- The USD/CAD pair remains steady near 1.3955, with the Bank of Canada (BoC) expected to keep interest rates unchanged.
- US President Trump considers exemptions for auto industry tariffs, easing recession concerns and supporting the US Dollar in the short term.
- Gold prices surged due to safe-haven demand amid US-China tensions and falling Treasury yields.
- The EUR/USD pair remains steady near 1.1285, with the US Dollar trading at a three-year low against the Euro.
- The US President Donald Trump administration plans to pressure US trading partners to limit their dealings with China during ongoing tariff negotiations.
Fundamental Analysis
- Major economic events include potential rate cuts by the BoC due to cooler Canadian inflation data and Trump's tariff threats.
- The US-China trade war has resurfaced with Trump's return to office in 2025, promising 60% tariffs on China, impacting global supply chains and leading to reduced spending and inflation.
- Central banks are the largest buyers of Gold, adding to their reserves in 2022. Gold is inversely correlated with the US Dollar and risk assets, rising during geopolitical instability.
Technical Analysis
- EUR/USD: Support levels are at 1.1128 and 1.1087, while resistance is near 1.1415. Momentum indicators are mixed.
- GBP/USD: Key resistance levels are at 1.3250, 1.3300, and 1.3330, and support levels at 1.3200, 1.3170, and 1.3100.
- USD/JPY: Support is at 142.41, while resistance levels are at 145.79 and 146.62.
- Gold (XAU/USD): Technical outlook remains bullish, with a potential new record high.
Conclusion
- The market outlook remains cautious due to ongoing US-China trade tensions and potential central bank rate cuts.
- Gold prices are expected to remain high due to safe-haven demand.
- The EUR/USD pair is expected to continue its upward trend, but volatility could arise from changing risk sentiment and trade developments.
- The GBP/USD pair is expected to maintain its strength, supported by improving risk sentiment and steady UK unemployment rate.
- The USD/CAD pair's technical backdrop leans bearish despite a recent rebound, with softer Canadian inflation and Powell's tariff warnings affecting the Canadian Dollar outlook.
