Market Overview
Trump’s tariff announcement has sent shockwaves across the markets, with the upcoming 25% tariffs on Canadian and Mexican goods set to take effect on March 4, 2025. The reasoning behind these tariffs stems from concerns over drug trafficking, with Trump pushing for stricter enforcement from both nations. The market reaction has already begun, with the Canadian dollar showing signs of weakness as investors anticipate economic strain from reduced trade. Hedging with multiple currencies may offer a strategy to manage risks during these turbulent times.
China is also in focus, with an additional 10% tariff set to be imposed, bringing the total to 20%. This move is aimed at increasing pressure on China to address trade imbalances. Given the historical impact of trade tensions on market sentiment, the US dollar is expected to strengthen further, while risk assets may see continued declines. Regulated MetaTrader platforms will be essential for traders looking to capitalize on these moves and track market shifts in real-time.
Trump’s mention of potential tariffs on the European Union, particularly targeting cars and other key industries, adds another layer of uncertainty. While no official date has been confirmed, the market is likely to price in expectations of trade disruptions, which could weigh on the euro in the coming weeks.
Additionally, the 25% tariffs on steel and aluminum, set to take effect on March 12, 2025, are notable as they will now include Canada and Mexico, removing previous exemptions. This development could put further pressure on North American trade dynamics, especially in industries reliant on these materials.
Perhaps the most significant upcoming shift will be the introduction of reciprocal tariffs on April 2, 2025, with the US mirroring the tariff rates imposed by other nations. This signals a broader move toward protectionism and could lead to further volatility in global markets, particularly in commodity-linked currencies and manufacturing-heavy economies. Traders might consider forex scalping automation to take advantage of swift market movements driven by tariff news.
With these developments, inflation concerns are rising, reinforcing expectations that the Federal Reserve will hold off on rate cuts. The dollar’s strength is expected to persist, while commodities like gold and silver face increased downward pressure amid fears of economic slowdowns and shifting trade dynamics. The next few weeks will be crucial in determining how markets fully absorb these tariff decisions and the broader implications for global trade.
Our personal readings on GOLD and SILVER remain bullish in the long term to match the risk of the inflationary dollar, especially with how aggressive Trump has been with his policies. The uncertainty will pull GOLD prices upward. However, the immediate reaction of price will remain under due to how appealing the US Dollar is due to its current inflationary measure. That said, we will look to sell GOLD and SILVER in the short term.
Market Analysis
GOLD
GOLD prices have moved according to our expectations, dropping significantly following Trump’s renewed commitment to imposing tariffs on Mexico, Canada, and potentially Europe. The increasing likelihood of a trade war adds to inflation concerns, particularly with the Federal Reserve delaying rate cuts. With inflation expected to rise, the bearish outlook for gold remains intact. The MACD continues to show selling volume but is approaching a crossover, suggesting a potential short-term pause in the decline. Meanwhile, the RSI is normalizing after previously reaching oversold conditions. Overall price action confirms a bearish trend, as gold remains below the previous swing low and now faces resistance at the EMA200.
SILVER
SILVER is also experiencing increased selling momentum, following the drop in gold prices. The MACD reflects higher selling volume, while the RSI confirms the continuation of bearish sentiment. Price action has firmly shifted to the downside, reinforcing expectations of further declines in the coming days. The announcement of tariffs has only strengthened the bearish case, and no changes in outlook are necessary.
DXY
The US DOLLAR gained overnight after Trump’s announcement, with investors positioning ahead of the upcoming inflation report. While the report remains significant for the Fed’s policy decisions, the tariff announcement has reduced its immediate impact, as market sentiment increasingly shifts toward expectations of prolonged rate stability. The MACD suggests continued buying strength, while the RSI shows sustained momentum. The Federal Reserve is likely to remain in a wait-and-see mode, further delaying any policy adjustments.
GBPUSD
The POUND has followed expectations, breaking below 1.26163 and the EMA200, confirming a shift in overall price action to bearish. The MACD indicates growing selling momentum, while the RSI reflects strengthening downward pressure. The potential for tariffs on European goods only adds to bearish sentiment, increasing the likelihood of further declines. Price action confirms continued selling pressure, and no changes in outlook are necessary.
AUDUSD
The AUSTRALIAN DOLLAR continues to weaken as anticipated, with price action maintaining its strong bearish structure. The MACD confirms increasing selling volume, while the RSI indicates that bearish momentum is firmly in place. There is no reason to change expectations, as the market remains in a sell-off mode. With tariffs further weighing on risk sentiment, the Australian dollar is likely to continue its decline in the coming days.
NZDUSD
The NEW ZEALAND DOLLAR is showing further weakness after breaking below 0.56859, aligning with expectations for continued selling. The MACD reflects rising selling volume, while the RSI confirms sustained bearish momentum. Price action has decisively shifted downward, and there are no signs of reversal at this stage. The market remains bearish, with further downside likely.
EURUSD
The EURO has moved exactly as anticipated, breaking below the EMA200 and the lower boundary of its consolidation range. The MACD shows an increase in selling volume, while the RSI signals rising bearish strength. Price action confirms a downward trend, reinforcing expectations of continued selling pressure. With momentum increasing, the bearish outlook remains intact.
USDJPY
The JAPANESE YEN remains stable despite the strength in the US dollar, as markets anticipate potential rate hikes from the BOJ. Prices are testing the EMA200, which is acting as resistance. The MACD remains muted, showing a lack of clear momentum in either direction, while the RSI has yet to confirm a breakout. With consumer prices in Tokyo still above the BOJ’s 2% target, speculation regarding future rate hikes is keeping the yen supported. A breakout from the current range is needed before a clearer market direction emerges.
USDCHF
The SWISS FRANC has lost gains after previously rising above the EMA200, with price action shifting back toward a bullish stance as it tests the 0.90054 level. If this resistance is broken, further upside momentum is expected, as reflected in the RSI. The MACD recently crossed lower, but this is likely a temporary move before the next bullish leg. Buying momentum is likely to resume, and further gains are expected.
USDCAD
The CANADIAN DOLLAR remains weak following Trump’s confirmation of tariffs on Canada and Mexico. The MACD and RSI both indicate strengthening bullish momentum in USD/CAD, reinforcing expectations of continued buying pressure. As trade tensions intensify, the outlook for the Canadian dollar remains bearish, and USD strength is expected to persist.
COT Reports Analysis
AUD – WEAK (3/5)
GBP – WEAK (1/5)
CAD – WEAK (4/5)
EUR – WEAK (3/5)
JPY – STRONG (5/5)
CHF – WEAK (5/5)
USD – STRONG (5/5)
NZD – WEAK (5/5)
GOLD – STRONG (4/5)
SILVER – STRONG (5/5)