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4 March 2025,06:00
Daily Market Analysis
4 March 2025, 06:00
*President Trump announced the planned tariff policy, rattling the financial market.
*Gold prices rose higher in the last session amid heightened uncertainty in the market.
*BTC and ETH declined by more than 10% as optimism of Trump’s statement on National strategic reserves waned.
Market Summary
President Trump’s latest move to impose an additional 10% tariff on China, along with the planned levies on Canada and Mexico taking effect today, has rattled global markets. The Canadian dollar and Mexican peso tumbled to fresh lows, but the U.S. dollar failed to capitalize on the protectionist measures. Markets perceive that such aggressive trade policies could hurt U.S. economic growth, increasing the likelihood of further rate cuts by the Federal Reserve. As a result, the dollar erased most of last week’s gains.
The uncertainty triggered by Trump’s executive order, which could potentially escalate into a full-blown trade war, also weighed heavily on equities. All three major U.S. indices closed lower, with the Dow Jones leading losses, sliding over 600 points. Meanwhile, risk-off sentiment extended to the Oceania region, pressuring the Australian and New Zealand dollars as they are closely tied to China’s economic outlook.
In contrast, heightened market uncertainty has driven safe-haven demand, pushing gold prices higher in the last session. However, the threat of a trade war dampened the global economic outlook, sending oil prices to their lowest levels since last December.
The cryptocurrency market was also hit hard, with Bitcoin (BTC) and Ethereum (ETH) tumbling over 10%. Optimism surrounding Trump’s proposal to include digital assets in the national strategic reserve faded due to a lack of details, while the broader risk-off sentiment further curbed investors’ appetite for speculative assets.
Current rate hike bets on 19th March Fed interest rate decision:
Source: CME Fedwatch Tool
0 bps (95%) VS -25 bps (5%)
Market Movements
The U.S. dollar remains under pressure as escalating trade tensions with China, Mexico, and Canada weigh on investor confidence. President Trump’s decision to double tariffs on Chinese imports to 20% has fueled market uncertainty, making the dollar less appealing despite its typical safe-haven status. Mixed U.S. economic data further complicates the outlook, with the S&P Global Manufacturing PMI exceeding expectations at 52.7, while the ISM Manufacturing PMI fell short at 50.3. This divergence highlights the fragile state of the U.S. economy, leaving the dollar vulnerable to further downside risks as global trade disruptions intensify.
The Dollar Index is trading lower while currently testing the support level. MACD has illustrated increasing bearish momentum,while RSI is at 39, suggesting the index might extend its losses since the RSI stays below the midline.
Resistance level: 107.60, 108.40
Support level: 106.45, 105.65
Gold prices rebounded strongly as investors sought safe-haven assets amid growing trade tensions and geopolitical uncertainty. The failure of U.S.-Ukraine negotiations regarding the Russia-Ukraine war has further exacerbated risk aversion. Additionally, the risk of retaliatory measures from China in response to the latest U.S. tariffs has heightened fears of a prolonged global trade war, further supporting gold’s upside momentum. As economic and geopolitical uncertainties persist, gold remains a key hedge against market volatility, attracting strong investor demand.
Gold prices are trading higher following the prior breakout above the previous resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 52, suggesting the commodity might extend its gains since the RSI stays above the midline.
Resistance level: 2920.00, 2950.00
Support level: 2880.00, 2835.00
GBP/USD surged above the 1.2700 mark in the last session, signalling a bullish bias as the pair capitalized on a weaker U.S. dollar. The dollar came under pressure after President Trump announced that tariffs on China, Canada, and Mexico would take effect today. Markets perceive these aggressive trade measures as a potential drag on U.S. economic growth, increasing expectations that the Federal Reserve may adopt a more accommodative monetary stance. This dovish outlook has fueled a selloff in the greenback, allowing the pound to extend its gains.
The pair reached a new high in the last session, suggesting a bullish bias. The RSI has jumped significantly, while the MACD has broken above the zero line, suggesting that the pair is now trading with bullish momentum.
Resistance level: 1.2780, 1.2865
Support level: 1.2670, 1.2575
USD/JPY tumbled sharply in the last session as the dollar weakened following President Trump’s announcement that tariffs on China, Canada, and Mexico would take effect. The market is increasingly wary that these aggressive trade measures could trigger a broader trade war, dampening economic growth prospects and weighing on the greenback. Investors flocked to the safe-haven Japanese yen amid rising uncertainty, driving the pair lower.
The USD/JPY has declined to its recent low levels. A break below the short-term support level at 148.85 should be seen as a bearish signal for the pair. The RSI has eased while the MACD is hovering near the zero line, with both indicators giving a neutral signal for the pair.
Resistance level:149.48, 151.35
Support level: 147.00, 143.80
U.S. equities, particularly the tech-heavy Nasdaq, suffered a sharp decline as investors reacted to renewed trade concerns and skepticism over AI-related growth. NVIDIA shares dropped more than 8% following reports that Chinese buyers are bypassing U.S. export bans to acquire the company’s Blackwell chips. Intel also erased early gains, falling 4%, after news that Nvidia and Broadcom were testing Intel’s manufacturing capabilities. The escalating trade war and uncertainty surrounding the AI industry have dampened investor sentiment, leading to increased volatility in the broader equity market
Nasdaq is trading lower following the prior breakout below the previous support level. MACD has illustrated increasing bearish momentum. However, RSI is at 28, suggesting the index might enter oversold territory.
Resistance level: 20550.00, 21045.00
Support level: 19900.00, 19360.00
AUD/USD remains under pressure, struggling to find a bullish catalyst as it hovers near monthly lows. A break below the current consolidation range could signal further downside for the pair. The Aussie dollar weakened after the RBA meeting minutes, where policymakers highlighted downside risks to the Australian economy. Additionally, the U.S. imposing higher tariffs on Chinese imports has weighed on the Australian dollar, given its status as a Chinese proxy currency. With risk-off sentiment prevailing, traders will monitor broader market trends and upcoming U.S. data for further direction.
The AUD/USD pair failed to sustain above the price consolidation range after it broke above, suggesting a lack of bullish momentum. The RSI remains close to the oversold zone, while the MACD has a golden cross at the bottom, which gives a mixed signal for the pair.
Resistance level: 0.6300, 0.6370
Support level: 0.6115, 0.6020
Oil prices tumbled to a new low in the last session as the market reacted to the tariff policies announced by the Trump administration. The decision to impose tariffs on Canada and Mexico, along with higher levies on Chinese imports, has fueled concerns over slowing global trade and economic growth, dampening the demand outlook for crude oil. With market sentiment leaning bearish, traders will closely watch upcoming U.S. economic data and developments in global trade for further direction.
Oil prices, after being rejected at the near 70.30 mark, have tumbled by about 3% to a new low, suggesting a bearish bias for oil. The RSI moved toward the oversold zone while the MACD failed to break above the zero line, suggesting that the bearish momentum is overwhelming.
Resistance level:70.30, 72.70
Support level: 67.80, 65.60
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4 March 2025, 06:00 Trump’s Tariff Policy Takes Effect, Causing Dollar to Plunge
3 March 2025, 06:01 US Equity Surges on Trump’s Tariff Policy
28 February 2025, 05:29 Dollar Jump on Trump’s Tariff Policy
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