ATFX Market Outlook 7th April 2025

ATFX Market Outlook 7th April 2025

Market Panic as Trade War Concerns Intensify

Market HighlightMarkets face another week of potential tariff turmoil due to Trump's large-scale import taxes, causing investor anxiety. The US stock market experienced its worst week since the COVID crisis five years ago. Last Friday, the Dow fell by 5.5%, the S&P 500 dropped by 5.97%, and the Nasdaq declined by 5.82%. The S&P 500 has decreased by over 17% from its February record high, with nearly $6 trillion wiped off the US market value.

On Friday, the US Dollar Index briefly rose above 103 as investors considered the impact of US tariffs on global trade and the economy. However, as the market quickly adjusted to a 25-basis-point rate cut in the US this year, US Treasury yields dropped sharply, pulling down the dollar.

Gold prices fell more than 3% on Friday, erasing earlier gains after hitting an intraday low of $3015. The escalating trade war sparked fears of global recession, leading investors to sell bullion to cover broader market losses. The likelihood of a recession increased, causing oil prices to plummet by 7% to their lowest level in over three years.

Key Outlook

Today, market participants anticipate continued market fatigue following last Friday's plunge. More volatility is expected ahead of Trump's April 9 deadline for global reciprocal tariffs. Key economic data from the Eurozone will be announced, including Germany's February industrial output, the Eurozone's April Sentix Investor Confidence Index, and February retail sales, highlighting the Eurozone economy's health.

Key Data and Events Today:

14:00 EU German Industrial Production FEB ** 

16:30 EU Sentix Investor Confidence APR ** 

17:00 EU Retail Sales YoY FEB ** 

Tomorrow

07:50 JP Current Account FEB ** 

08:30 AU Westpac Consumer Confidence Change APR **

18:00 US NFIB Business Optimism Index MAR ** 

EURUSD

· Resistance: 1.0989 / 1.1050

· Support: 1.0841 / 1.0793

The EUR/USD pair experiences dip-buying due to USD weakness from recession fears and potential Fed rate cuts. The pair is trading around 1.0960, gains may be constrained by US-EU trade war concerns. Traders are awaiting German economic data and Eurozone investor confidence, with a focus on trade developments impacting USD demand.

GBPUSD

· Resistance: 1.2958 / 1.2998

· Support: 1.2790 / 1.2740

The GBP/USD rebounds from a one-month low to approximately 1.2900. A weaker USD, fueled by potential Fed rate cuts, supports the pair, although fears of a trade war limit are gaining. The British Pound is strengthened by expectations that the BoE will reduce rates more slowly than the Fed, indicating a potential upward trend. A rebound from the 200-day SMA further reinforces this outlook.

USDJPY

· Resistance: 147.22 / 147.76

· Support: 144.72 / 144.19

BoJ Prime Minister Shigeru Ishiba will keep urging the U.S. to lower tariffs, though quick progress is unlikely. His plans to discuss economic issues with Trump emphasise the need for domestic support measures for businesses and jobs. His speech favors the USD/JPY, down 1.09% at 145.40.

US Crude Oil Futures (MAY)

· Resistance: 61.73 / 62.52

· Support: 57.43 / 56.59

Oil prices are sharply declining due to concerns about a global slowdown caused by the US tariffs announced last Friday. The potential US-China trade war threatens oil demand as China prepares to implement additional tariffs. Kristalina Georgieva of the IMF urges the resolution of trade tensions, cautioning that Trump's tariffs represent a global risk.

Spot Gold

· Resistance: 3024 / 3058

· Support: 2923 / 2831

Spot Silver

· Resistance: 30.80 / 31.36

· Support: 28.01 / 27.57

Gold prices dropped to $3,006 following Fed Chair Powell's hawkish comments on inflation and tariffs. Hedge funds are experiencing margin calls, leading to asset sales. In March, the economy saw over 200,000 job gains, with unemployment at 4.2%, heightening recession fears. Upcoming reports and a strengthened dollar could further influence gold prices.

Dow Futures

· Resistance: 39116 / 39488

· Support: 37417 / 37038

The Dow Futures plunged nearly 2,000 points on Friday due to a global trade war initiated by the US and China's retaliatory tariffs. It dropped to 38,500, marking an 18% decline from November highs. Despite substantial job gains, economic concerns persist, with markets anticipating significant Fed rate cuts, which should be bullish for the US stock market. However, the Dow is below critical levels, signaling a potential further drop.

NAS100

· Resistance: 18154 / 18708

· Support: 16893 / 16320

Major tech stocks plummeted last Friday, entering a bear market in the tech index. The Nasdaq opened below 18,000 and closed at its lowest point since May last year, approaching key support levels. Watch for support around 17,400; otherwise, it may risk dropping below 17,000.

BTC

· Resistance: 79835/ 81269

· Support: 76625 / 75215

Bitcoin declined amid concerns about a global trade war triggered by Trump's tariffs, affecting the market cap by $500 billion. Tariffs led to a $4 trillion loss in equity markets, driving investors to safe havens like gold. Additionally, $160 million in Bitcoin moved to Kraken, heightening selling pressure. Investors should consider that the bearish momentum could continue amid the Global economic fear. 

Enjoy trading! The content is for reference only. Please ensure that you understand the risk.

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