Market Overview
- The forex market witnessed significant movements with the USD/JPY pair falling by 0.21% to 143.13 due to the US's refusal to provide special tariff treatment to Japan during recent talks.
- The EUR/USD pair rose to around 1.1335 as concerns over Trump's tariffs eased, putting pressure on the USD.
- The AUD/JPY pair is trading near the 91.00 zone, showing a slight bounce within Wednesday's range, but the overall trend remains bearish.
- Gold prices dropped over 2.50% to $3,288 as risk appetite improved due to easing US-China tensions and Trump's statement that he won't fire Fed Chair Powell.
Fundamental Analysis
- Major economic events included statements from Federal Reserve Bank of Cleveland President Beth Hammack supporting ongoing reductions in the central bank's balance sheet and some active management of market liquidity through Fed interventions.
- US President Donald Trump stated that the 25% tariff on cars imported from Canada to the United States could increase, aiming to boost U.S. auto production and reduce reliance on foreign-made vehicles.
- The Mexican Peso weakened by 0.29% against the USD due to a return of Greenback strength and improved market sentiment.
Technical Analysis
- EUR/USD shows support and resistance levels at 1.1322 and 1.1454 respectively, indicating a bullish bias unless it drops below key short-term averages.
- GBP/USD shows support at 1.3250 with potential resistance at 1.3423, indicating a bullish tilt unless it drops below 1.3250.
- USD/JPY shows support at 143.11 with resistance at 144.72, indicating a bearish outlook due to uncertainties over Fed's independence and mixed macro data.
- Gold (XAU/USD) shows support at $3,200 with resistance at $3,400, indicating a bullish outlook despite the recent retreat below $3,300.
Conclusion
- The market outlook remains volatile due to ongoing US-China trade tensions, central bank statements, and economic data releases.
- Potential trading opportunities may arise from these market movements, but traders should monitor for confirmation as pairs trade within narrowing ranges.
