Trump’s Tariff Threat Lifts Dollar

Market Summary

Markets turned volatile last Friday as newly elected U.S. President Donald Trump rattled investors with an aggressive trade stance, signaling a potential 25% tariff on steel and aluminum imports. The move, expected to take immediate effect upon announcement, overshadowed the release of a weaker-than-expected U.S. Nonfarm Payrolls (NFP) report. Despite the jobs data missing estimates at 143k—well below the previous 307k reading—the dollar strengthened, buoyed by Trump’s trade rhetoric.

Looking ahead, all eyes are on Federal Reserve Chair Jerome Powell’s semi-annual testimony before the Senate, which could provide further direction for the greenback. A hawkish stance from Powell may reinforce dollar strength, while any dovish signals could see a shift in sentiment.

Meanwhile, commodity-linked currencies, including the Australian, New Zealand, and Canadian dollars, faced heavy selling pressure in response to Trump’s tariff comments, with investors bracing for further details on the policy. Gold, on the other hand, remained resilient near record highs, underpinned by mounting uncertainty and risk aversion.

In the cryptocurrency space, Bitcoin and Ethereum traded flat as broader market risk appetite weakened, prompting investors to pivot toward safe-haven assets. Traders now await further clarity on U.S. trade policy and Powell’s testimony for cues on market direction.

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Current rate hike bets on 19th March Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (91.50%) VS -25 bps (8.5%)

Market Overview

Economic Calendar

(MT4 System Time)

N/A

Source: MQL5 

Market Movements

DOLLAR_INDX, H4

The Dollar Index (DXY) has staged a rebound, breaking past its previous high and signaling a potential trend reversal. The greenback found support after stronger-than-expected labor market data, with the unemployment rate and average earnings growth exceeding forecasts. These figures have reinforced confidence in the resilience of the U.S. economy, driving the dollar higher. Investors are now turning their attention to Federal Reserve Chair Jerome Powell’s semi-annual testimony before Congress on Tuesday and Wednesday. Any hawkish signals could further bolster the dollar, while a more cautious tone may temper its gains.

The Dollar Index has rebounded from its recent lows and surpassed its previous high, suggesting a trend reversal signal for the pair. The RSI has gotten above the 50 level while the MACD is approaching the zero line from below, suggesting that the bearish momentum is vanishing. 

Resistance level: 108.90, 109.80

Support level: 107.35, 106.50

XAU/USD, H4

Gold prices have formed a double top near their all-time high, signaling a potential technical correction amid renewed dollar strength. The precious metal came under pressure in the last session as the greenback rallied on the back of stronger-than-expected economic data and a hawkish tilt from the Federal Reserve. With markets now eyeing further gains in the dollar, gold may face additional headwinds. A continuation of the dollar’s upward momentum could trigger a near-term pullback for bullion, with traders watching key support levels for potential buying opportunities.

Gold prices are now consolidating at its all-time peak and have formed a double-top, suggesting a potential technical correction for the gold. The RSI has dropped out from the overbought zone while the MACD has crossed on the above and is edging lower, suggesting that the bullish momentum is easing. 

Resistance level:  2960.00, 3000.00

Support level: 2820.00, 2775.00

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GBP/USD，H4

The British pound tumbled against the strengthening U.S. dollar on Friday, pressured by robust U.S. job data and the Federal Reserve’s hawkish stance. While the greenback found renewed support from expectations of tighter monetary policy, the pound remained vulnerable as concerns over the UK economy’s potential slide into stagflation lingered. With investors closely monitoring economic indicators for further signs of weakness, the GBP/USD pair extended its decline, reflecting broader risk aversion. 

GBP/USD has formed a lower-high price pattern but remains supported at the 1.2375 mark, a break below from such a level shall serve as a bearish signal for the pair. The RSI has slid below the 50 level while the MACD is poised to break below the zero line, suggesting that the bullish momentum with the pair has vanished. 

Resistance level: 1.2485, 1.2610

Support level: 1.2305, 1.2175

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EUR/USD，H4

The euro failed to hold above the 1.0355 level, signaling a bearish bias for EUR/USD as the greenback strengthened on the back of robust U.S. job data. The pair came under pressure as market sentiment shifted in favor of the dollar, with expectations of a prolonged hawkish stance from the Federal Reserve adding to its momentum. Traders now turn their focus to the European Central Bank’s chief, who is set to speak later today. Any policy signals or economic outlook updates could influence the euro’s price action and determine whether the pair finds support or extends its decline.

The EUR/USD has declined by 0.5% and broken below the critical support level, suggesting a bearish signal for the pair. The RSI has slid to near the oversold zone while the MACD failed to maintain above the zero line, suggesting that the bearish momentum is overwhelming. 

Resistance level: 1.0355, 1.0535

Support level: 1.0200, 1.0050

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USD/JPY，H4

The USD/JPY pair staged a technical rebound from recent lows as the dollar regained strength in the last session. However, the Japanese yen remains resilient, underpinned by safe-haven demand and reinforced by the Bank of Japan’s recent hawkish stance. Should the pair remain below the 152.00 mark, it would indicate that the broader bearish trajectory is still intact. 

The USD/JPY remains in a bearish trajectory despite the pair’s formation of a double bottom, which may trigger a technical rebound. The RSI shows signs of rebound, while the MACD has crossed at the bottom, suggesting that the bearish momentum is easing. 

Resistance level: 154.10, 156.25

Support level: 149.30, 146.30

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Nasdaq (US100), H1: 

U.S. equities, including the Nasdaq, came under pressure last Friday after President Trump signaled plans to impose tariffs on imported steel and aluminum. The announcement dampened risk appetite, leading to a broad selloff in risk assets and pushing major indices lower. The Nasdaq has formed a lower-high price pattern, suggesting the index may be entering a bearish trajectory. Investors will be closely watching further developments on trade policy and broader economic indicators to gauge market direction.

The Nasdaq is now trading in a lower-high price pattern, suggesting a bearish bias for the index. The RSI is easing while the MACD is also struggling to support at above the zero line, suggesting that the bullish momentum with the index is vanishining. 

Resistance level: 21920.00, 22600.00

Support level: 21260.00, 20600.00