ATFX Market Outlook 4th February 2025

ATFX Market Outlook 4th February 2025

Wall Street Rebounds and Dollar Slipped as Trump Delays Tariffs on Canada and Mexico

Opinion Today:

U.S. stock index futures rose after President Trump delayed 25% tariffs on Canada and Mexico for 30 days, easing investor concerns. However, a 10% tariff on China will commence on Tuesday. While stocks had dropped due to trade and inflation worries, they ended above session lows following the delay. Despite this, a global preference for safe-haven assets resulted in declines for U.S. stocks, with Dow futures sliding by 0.28%, the S&P 500 falling 0.76%, and the Nasdaq decreasing by 1.2%.

After the U.S. postponed tariffs on Mexico and Canada, the US dollar experienced volatility, initially rising by 1% before closing lower. In late trading, the euro gained 0.15% to 1.0342, the pound strengthened by 0.41% to 1.2443, and the US dollar fell by 0.28% to 154.77 yen. This prompted investors to seek safe-haven assets such as bonds and gold, causing a slight decline in US Treasury yields, while spot gold reached a high of $2,814. Oil prices also fluctuated in response to the tariff news.

Today marks the beginning of updates on the U.S. job market. Tonight's December JOLTs job vacancies are anticipated to decrease slightly to 8 million (previously 8.098 million). If the change aligns with expectations, it could indicate a stable job market that is maintaining its positive trend from last year.

Key Data:

China Holiday

23:00 US Factory Orders & JOLTs Job Openings DEC **

Tomorrow

05:30 US API Crude Oil Stock Change *** 

08:30 JP Services & Composite PMI Final JAN ** 

09:45 CN Caixin Services & Composite PMI JAN **

21:15 US ADP Employment Change JAN *** 

23:00 US ISM Services PMI JAN *** 

EUR/USD

1.0397/1.0449 Resistance

1.0270/1.0228 Support 

The euro rebounded against the US dollar after the US postponed tariffs, marking its best performance in nearly two weeks. An upward trend line since 13 January offers temporary support, but the 20-day moving average at 1.0358 may impede the rebound.

GBP/USD

1.2476/1.2526 Resistance

1.2312/1.2262 Support 

The pound against the US dollar hit a low yesterday, reaching its lowest point since 20 January. However, following a broad rebound by non-US currencies, it recovered all its losses and rose. From a technical standpoint, it tested the 20-day moving average at 1.2339 before bouncing back. This level has now become a current support point. It is crucial to monitor whether the exchange rate can remain above the 10-day moving average, opening the possibility for a test of the 1.2500 mark.

USD/JPY

155.96/156.32 Resistance

154.44/154.07 Support

The Japanese Yen weakens as Trump's delay in tariffs on Canada and Mexico dampens demand for safe-haven assets while raising concerns about potential tariffs on Japan, pushing USD/JPY towards the mid-155.00s. However, anticipated BoJ rate hikes help limit the decline of JPY. The pair encounters resistance around 156.00 and support near 154.65; a break below this level could lead to a movement towards 152.30, in line with the 100-day SMA.

USD/CAD

1.4526/1.4589 Resistance

1.4338/1.4259 Support 

The USD/CAD pair has fallen to approximately 1.4410 as the Canadian Dollar rebounds following Trump's decision to delay tariffs in Canada for a month. This comes after his recent imposition of tariffs on Mexico and Canada. Traders are eagerly awaiting insights into key US job data over the next two days, and the US-serving PMI and ADP employment change data may influence the dollar's performance. Furthermore, crude prices also affect the CAD's direction. 

U.S Crude Oil Futures (March)

74.00/74.92 Resistance

70.89/69.77 Support 

US crude oil prices fell a second day to around $72.00, nearing a one-month low. This drop follows President Trump's delay of tariffs on Canada and Mexico, easing supply concerns. Concerns over lower fuel demand due to global economic impacts are also pressuring prices. OPEC+ is maintaining current production levels, which may support prices. A decline below the 100-day SMA at $71.00 could confirm further losses.

Spot Gold

2834/2839 Resistance

2799/2794 Support

Spot Silver

31.73/31.85 Resistance

31.19/31.06 Support 

Spot gold reached new historical highs, breaking $2,830 before retreating over 1% to close above $2,810 due to profit-taking. If it continues to rise, it may challenge the $2,840 target.

US30

44811/45043 Resistance

44042/43806 Support

U.S. stock indices experienced a volatile day and closed lower on Monday after Trump announced a delay in tariffs on Mexico. The Dow futures hit a two-week low but found support at the 44,000 mark, although they face resistance from the 10-day moving average.

NAS100

21615/21785 Resistance

20907/20743 Support

NAS100 experienced a volatile trading day, and the most significant tech stocks fell on Monday, with Tesla down by over 5% and Apple down by over 3%, dragging the Nasdaq lower. The index opened sharply down, briefly testing below 21,000 before finding support. The 20-day and 10-day moving averages between 21,300 and 21,550 are key resistance levels to watch.

BTC (Bitcoin)

104633/106701 Resistance

98323/95721 Support

The crypto market rebounded after Mexico's President Claudia Sheinbaum and US President Donald Trump agreed to pause US-Mexico tariffs for a month. Bitcoin (BTC) has reclaimed the $100,000 level, with Ethereum (ETH), XRP, and Solana (SOL) also experiencing gains. Litecoin climbs 16% in bullish trade. Following the market sentiment, Bitcoin (BTC) may recover from last week's loss. The key resistance is around $104,633 and 106,701 on the technical side.