Market Overview
- The forex market is on edge as investors await the announcement of new tariffs by US President Donald Trump. The uncertainty surrounding the details and potential impact of these tariffs has led to cautious trading across major currency pairs and Gold.
- The Australian Dollar (AUD) and New Zealand Dollar (NZD) are under pressure due to trade balance concerns and potential Fed rate cuts, respectively. Meanwhile, the Euro (EUR) and British Pound (GBP) are holding steady despite looming tariff threats.
- The US Dollar (USD) is facing downward pressure ahead of the tariff announcement, despite better-than-expected ADP employment data. The Canadian Dollar (CAD) is also weakening due to potential tariffs and falling oil prices.
- Gold prices remain stable as investors seek safe-haven assets amidst global trade tensions.
Fundamental Analysis
- Australia's trade surplus decreased in February, with falling exports and rising imports. This, along with other key factors such as interest rates set by the Reserve Bank of Australia and the health of the Chinese economy, is influencing the AUD/USD pair.
- The NZD/USD pair is weakening due to new tariffs imposed by Trump on China, causing uncertainty and potential trade war. Traders are betting on Fed rate cuts in June, which could weaken the USD and support the pair.
- In Europe, markets reacted calmly to tariff announcements from the Trump administration. However, the upcoming Nonfarm Payrolls (NFP) report is anticipated to have a significant impact on EUR/USD.
- In Canada, Trump's tariffs on Canadian and Mexican imports raised concerns about a trade war, leading to countermeasures from Canada. This, along with lower crude oil prices, weakened the CAD.
Technical Analysis
- EUR/USD: The pair briefly hit 1.0900 before returning to familiar levels. Key resistance lies at 1.0954 while support can be found at 1.0731.
- GBP/USD: The pair reached new six-month highs, currently testing the 1.3000 handle. The Pound Sterling is influenced by decisions of the Bank of England and economic data releases.
- USD/JPY: The pair traded within the 149.09 – 150.48 range during Trump's speech, with potential to rise above 150.00 or drop over 35 pips as traders sought safety in the Japanese Yen.
- Gold (XAU/USD): Gold price remains stable after a rally, with potential to rise above $3,149 or drop below $3,100 amid global trade tensions.
Conclusion
- The forex market is bracing for potential turbulence as Trump prepares to announce new tariffs. This could significantly impact global trade and financial assets, leading to increased volatility in currency pairs and Gold.
- Investors should closely monitor the details of the tariff announcement and its implications for global trade and economic growth. This could provide potential trading opportunities amidst the expected market volatility.
- Key economic data releases, including the Nonfarm Payrolls report in the US, should also be watched closely for their potential impact on currency movements.
