MARKET OVERVIEW
On February 2, 2025, President Trump imposed tariffs on imports from Canada, Mexico, and China, set to take effect on February 4. The tariffs include a 25% levy on most goods from Canada and Mexico, along with a 10% tariff on energy products from Canada and various imports from China. In retaliation, Canadian Prime Minister Trudeau and Mexican President Sheinbaum announced equivalent tariffs on U.S. imports. This has sparked fears of a trade war, impacting global markets.
Gold and the Dollar: Market Shifts
Gold, having reached a record high of 2817.100, faced a pullback below 2789.390, testing key support levels like the EMA200. Despite this, we maintain a bullish outlook, expecting further upside. However, the dollar’s surge due to tariff concerns poses a challenge to gold’s rally.
Quantitative forex models indicate that the market is adjusting to these tariff measures, with the U.S. dollar gaining strength. The regulated MetaTrader platforms reflect this shift as the MACD shows increasing volume, and RSI suggests continued selling pressure. Nonetheless, institutional investors are likely to hedge against dollar risks by increasing gold positions.
Silver: Risk-Hedging in Action
Silver is expected to remain subdued until gold reaches new highs. The compounding forex profits approach can be applied here, as market conditions indicate further buying potential once gold pushes higher. The MACD suggests continued downward pressure, but banks may shift to silver as a safe haven in case gold hits $3,000 per ounce.
DXY and the Dollar’s Rise
The DXY index surged after Trump’s announcement, strengthening the dollar. The tariffs have fueled inflationary pressures, increasing the dollar’s appeal. Hedging with multiple currencies has become a common strategy for investors managing the risk of a strong dollar. The MACD and RSI both show strong buying momentum, signaling further strength in the U.S. dollar.
Currency Pairs: USD and Beyond
- GBPUSD: The pound is consolidating despite dollar strength. The MACD and RSI indicate downside momentum, signaling potential for further declines.
- AUDUSD: The Australian dollar has seen sharp drops against the dollar, consistent with global inflationary pressures. Forex scalping automation may present opportunities to capitalize on these drops.
- NZDUSD: While growth is evident in some markets, traders should avoid chasing moves without solid strategy. The expectation is that the dollar will continue to push prices lower due to tariff effects.
- EURUSD: The Euro is holding up better than most, but selling pressure remains. The market shows potential for re-entry into short positions once price gaps are filled.
- USDJPY: The yen failed to break key levels, shifting to a more bullish bias. The growing momentum is reflected in both the MACD and RSI, suggesting further strength for the yen.
- USDCHF: The Swiss Franc has shown stability, continuing to rise with increasing buying momentum. Traders are advised to wait for pullbacks before entering positions.
- USDCAD: The Canadian dollar is seeing significant buying pressure, impacted by the tariffs. It is expected to continue its rally with little resistance. Traders can maintain long positions, utilizing compounding forex profits strategies to maximize returns.
COT REPORT ANALYSIS
- AUD – WEAK (5/5)
- GBP – WEAK (4/5)
- CAD – WEAK (4/5)
- EUR – WEAK (4/5)
- JPY – WEAK (1/5)
- CHF – WEAK (5/5)
- USD – STRONG (4/5)
- NZD – WEAK (4/5)
- GOLD – STRONG (5/5)
- SILVER – STRONG (4/5)