Market Overview
As attention shifts toward the upcoming trade tariffs under Trump, several nations—beyond just India—are taking steps to secure safer trade deals through proactive negotiations.
In a surprising move, U.S. President Donald Trump joined trade talks in Washington on Wednesday with a Japanese delegation. Later, he stated that “big progress” had been made alongside lead negotiator Ryosei Akazawa. On Thursday, Trump appeared with Italian Prime Minister Giorgia Meloni, expressing mutual optimism on resolving trade tensions that have strained U.S.-European relations.
While this has injected optimism into the market—with hopes that tariffs could be reduced or eliminated depending on how negotiations unfold—analysts remain cautious. Until there’s a clear shift in Trump’s tone or official policy changes, this optimism remains speculative.
Meanwhile, the European Central Bank took a step to support its economy by cutting rates by 25 basis points, as widely expected. The ECB cited that current uncertainty is dampening confidence among consumers and businesses, with volatile market reactions tightening monetary conditions indirectly.
But the unease isn’t just overseas—it’s deeply felt within the U.S. economy too.
Fed Chair Jerome Powell reiterated that the Federal Reserve will wait for more data before adjusting interest rates. However, he warned that Trump’s tariff policies risk pushing both inflation and employment further from the Fed’s targets.
“As the dust is starting to settle, there are concerns regarding that stagflationary outlook that Powell warned about,” said Fiona Cincotta, strategist at City Index.
This underscores that the latest data doesn’t yet reflect the forward-looking indicators the Fed needs. Instead, what we are seeing are the ripple effects of tariff strategies and broader trade policies that may compromise long-term economic momentum.
While Powell’s caution is meant to curb hyper-inflationary risks, it also reinforces investor concerns about a significant slowdown in the U.S. economy—especially troubling given that 2024 was supposed to bring more rate cuts in response to cooling activity.
Trump, for his part, didn’t take kindly to Powell’s stance. He went so far as to say Powell’s termination “cannot come fast enough,” while renewing calls for aggressive rate cuts—adding yet another layer of uncertainty around U.S. monetary policy.
According to Christopher Hodge, chief economist for Natixis U.S., “I still think Powell will be retained until his term ends, but I’m less certain than before. Markets would react poorly if the Fed’s independence was compromised.”
Market Analysis
There will be no precious metals report on Friday, April 18 due to the Good Friday holiday, as most markets will be closed. This could result in a quieter trading session for GOLD and SILVER, so traders should keep this in mind when planning their trades.
GBP/USD
The Pound continues to show bullish movement, supported by increasing momentum in the MACD and RSI. The GBP/USD pair remains poised for further upside as Dollar weakness provides continued support. We continue to look for buying opportunities, particularly as long as GBP/USD maintains its bullish structure.
AUD/USD
The Aussie Dollar remains in consolidation, but MACD and RSI indicators are showing signs of early bullish momentum. AUD/USD could be a good candidate for rapid trade setups once it breaks out of its current consolidation range.
NZD/USD
The Kiwi Dollar mirrors the Aussie Dollar, showing bullish momentum with the MACD and RSI confirming strength. NZD/USD remains a solid opportunity for traders seeking further bullish trends, especially with Dollar weakness continuing to dominate.
EUR/USD
The Euro continues to perform well, showing solid gains. The RSI and MACD reflect underlying strength, supporting the expectation for continued bullish momentum. EUR/USD remains in an uptrend, with further buying opportunities expected in the near term.
USD/JPY
The Yen remains in a consolidation phase, though the MACD and RSI indicate a potential bearish continuation. We continue to watch for short opportunities in USD/JPY, especially with the overall bearish sentiment in the Dollar.
USD/CHF
The Swiss Franc continues to consolidate, though there is growing bearish pressure in USD/CHF. MACD and RSI signals indicate that further downside is likely. Watch for any retracements for better entry points into short positions.
USD/CAD
The Canadian Dollar continues to show strength, with the MACD and RSI signaling an increase in bearish momentum for USD/CAD. While the Canadian Dollar remains resilient, watch for potential sell opportunities once the price structure breaks lower.
COT Reports Analysis
Here’s the latest Commitment of Traders (COT) outlook, reinforcing directional bias:
- AUD – WEAK (3/5)
- GBP – WEAK (5/5)
- CAD – WEAK (4/5)
- EUR – STRONG (5/5)
- JPY – STRONG (5/5)
- CHF – WEAK (3/5)
- USD – STRONG (4/5)
- NZD – WEAK (4/5)
- GOLD – STRONG (4/5)
- SILVER – STRONG (4/5)
Use these ratings to validate or filter your trades. Also, consider trading platform tools like MT4 vs MT5 to optimize execution based on your strategy.
Final Thoughts
The forex market continues to react to global trade tariff developments and geopolitical uncertainties. The Dollar remains under pressure, while commodities like GOLD and SILVER continue to rise. Traders should watch for opportunities in pairs like EUR/USD, GBP/USD, and USD/JPY, adjusting strategies based on ongoing forex market trend analysis.
