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 rationale behind these tariffs stems from concerns over drug trafficking, with Trump pushing for stricter enforcement from both nations. The Canadian Dollar has already weakened as investors anticipate economic strain from reduced trade.
China is also under scrutiny, with an additional 10% tariff set to be imposed, bringing the total to 20%. Given the historical impact of trade tensions on market sentiment, the U.S. Dollar (USD) is expected to strengthen, while major and minor currency pairs may experience heightened volatility.
Additionally, a 25% tariff on steel and aluminum set to take effect on March 12, 2025, will remove previous exemptions for Canada and Mexico, further pressuring North American trade. On April 2, 2025, the U.S. will introduce reciprocal tariffs, mirroring the tariff rates imposed by other nations. This shift toward protectionism may lead to further market volatility, particularly in commodity-linked currencies and manufacturing-heavy economies.
With these developments, inflation concerns are rising, reinforcing expectations that the Federal Reserve will hold off on rate cuts. The U.S. Dollar’s strength is expected to persist, while gold and silver face increased downward pressure amid fears of an economic slowdown and shifting trade dynamics.
Our long-term outlook for gold and silver remains bullish due to inflation risks. However, the short-term trend suggests selling pressure, as the USD remains strong.
Market Analysis
GOLD
Gold prices have declined significantly following Trump’s renewed commitment to trade tariffs on Mexico, Canada, and potentially Europe. The increasing likelihood of a trade war adds to inflation concerns, with the Federal Reserve delaying rate cuts. Price action forecasting suggests a continued bearish trend. The MACD is approaching a crossover, indicating a potential short-term pause. RSI is normalizing after previously reaching oversold conditions. Gold remains below the previous swing low, facing resistance at the EMA200. While short-term forex gains may favor USD strength, gold remains a long-term hedge against inflation.
SILVER
Silver is also experiencing increased selling momentum, following gold’s decline. The MACD shows higher selling volume, while the RSI confirms sustained bearish sentiment. Price action has firmly shifted downward, reinforcing selling expectations. The announcement of tariffs on metals strengthens the bearish case, making short-term compounding forex profits challenging.
DXY (U.S. Dollar Index)
The U.S. Dollar gained strength overnight after Trump’s announcement, with investors positioning ahead of the inflation report. The MACD indicates continued buying strength, and the RSI reflects sustained momentum. Trading platform features highlight dollar dominance amid policy uncertainty. The Federal Reserve is expected to delay rate cuts, further supporting USD appreciation.
GBP/USD
The Pound has followed expectations, breaking below 1.26163 and the EMA200, confirming a bearish shift. The MACD signals growing selling momentum, while the RSI reflects increased downward pressure. Major and minor currency pairs like GBP/USD remain volatile amid tariff uncertainty.
AUD/USD
The Australian Dollar continues to weaken, maintaining a strong bearish structure. The MACD shows increasing selling volume, and the RSI confirms bearish momentum. Compounding forex profits may be challenging in current conditions. With tariffs weighing on risk sentiment, the Australian Dollar is likely to continue declining.
NZD/USD
The New Zealand Dollar has broken below 0.56859, aligning with expectations of continued selling. The MACD shows rising selling volume, and the RSI confirms sustained bearish momentum. Trading platform features can help identify trend shifts for short-term opportunities.
EUR/USD
The Euro has broken below the EMA200, confirming a downward shift. The MACD reflects increased selling volume, and the RSI signals strengthening bearish momentum. Short-term forex gains in USD suggest continued pressure on EUR/USD.
USD/JPY
The Japanese Yen remains stable despite USD strength, as BOJ rate hike expectations persist. Prices are testing the EMA200 as resistance. The MACD shows muted momentum, and the RSI is yet to confirm breakout. Traders should monitor price action forecasting to determine USD/JPY’s next move.
USD/CHF
The Swiss Franc is testing 0.90054, indicating a potential bullish breakout. The MACD crossed lower, but temporarily, and the RSI suggests bullish momentum is resuming. Major and minor currency pairs like USD/CHF are highly reactive to tariff news.
USD/CAD
The Canadian Dollar remains weak, following Trump’s confirmation of tariffs on Canada. The MACD and RSI indicate bullish USD momentum, reinforcing expectations of continued buying pressure. Major and minor currency pairs like USD/CAD react sharply to trade policy shifts, and USD strength is expected to persist amid economic uncertainty.
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)
Conclusion
The market remains highly reactive to trade tariffs, with major and minor currency pairs adjusting to U.S. protectionist policies. Gold and silver remain long-term hedges against inflation, but short-term forex gains favor USD strength. Price action forecasting will be crucial in navigating trading platform features and seizing profitable market movements.
