ATFX Market Outlook 5th March 2025 

ATFX Market Outlook 5th March 2025 

Market Turmoil: Trump’s Tariff Decision Sparks Global Sell-Off, Gold Surges Past $2,900

[Markets highlight]

U.S. stocks declined on Tuesday, with the Nasdaq nearing correction territory due to President Trump's new tariffs on Canada and Mexico. The Dow fell 1.55%, the S&P 500 dropped 1.22%, and the Nasdaq decreased by 0.35%.

Meanwhile, the euro rose to a three-month high against the dollar, climbing 1.2% to 1.0611 after German parties agreed on a €500 billion infrastructure fund. The dollar index hit its lowest since December 6, and the pound increased by 0.7% to 1.2784. The yen weakened, pushing USDJPY to 150. Gold prices rose to $2,917.42 an ounce, up 0.8%, as safe-haven demand increased, while oil prices fell to multi-month lows amid OPEC+ production plans and the impact of U.S. tariffs.

On Wednesday, final February PMI values for the service industry and composite indices from various countries will be released. The market will focus on U.S. ADP employment figures, looking for improvement for the second consecutive month, which could enhance job market confidence. Additionally, the U.S. will publish its ISM non-manufacturing PMI for February, with expectations of expansion despite potential signs of a slowdown.

[Financial data and events of significant concern]

16:55 EU GERMANY Services & Composite PMI Final FEB ** 

17:00 EU Services & Composite PMI Final FEB ** 

17:30 GB Services & Composite PMI Final FEB ** 

18:00 EU PPI JAN ** (Forecast 0.1%, Previous 0.6%) ** 

21:15 US ADP Employment Change FEB *** 

22:45 US Services & Composite PMI Final FEB ** 

23:00 US ISM Services PMI FEB & Factory Orders JAN *** 

Tomorrow

03:00 Fed Beige Book *** 

18:00 EU Retail Sales JAN ** 

21:15 ECB Interest Rate Decision *** 

21:30 US Initial Jobless Claims *** 

21:45 ECB Press Conference *** 

EURUSD

1.0674/1.0700 Resistance

1.0569/1.0548 Support

EUR/USD rose 1.4% on Tuesday, gaining 140 pips as the market sold off the US Dollar amid easing tariff threat expectations from President Trump. The European Central Bank will likely cut interest rates by 25 basis points, and U.S. Nonfarm Payrolls are expected to drop to 144K from 183K. The pair surpassed 1.0600, marking a 2.4% two-day rally. Still, resistance at the 200-day Exponential Moving Average is around 1.0635, Fibonacci resistance is around 1.0674 and 1.0700, and overbought conditions raise the risk of a bearish reversal. 

GBPUSD

1.2828/1.2843 Resistance

1.2760/1.2744 Support

The Sterling extended its gains against the US dollar for two days, reaching a year-to-date high of 1.2753. President Trump's tariffs on Mexico, Canada, and China took effect, leading to capital inflows to European currencies. Sterling's buyers breached the 200-day Simple Moving Average at 1.2785, which could have propelled the pair towards 1.2828/1.2843. Conversely, a drop below 1.2744 could see sellers targeting the 100-day SMA at 1.2627, followed by 1.2600.

USDJPY

150.25/150.65 Resistance

149.27/148.96 Support

The USD/JPY pair reached its lowest since early October, hitting 148.09 before rebounding and closing slightly higher. It remains within the low range seen over the past two weeks. The pair attempted to move above the 10-day moving average in the Asia trading session, suggesting improving short-term technical signals. Traders are looking to see if it can break the 150 mark.

US Crude Oil Futures (APR)

68.33/68.66 Resistance

66.94/66.67 Support

Crude oil prices have declined, reaching their lowest level since November 18. This drop comes after OPEC+ announced an increase in production for April and after the impact of Trump's tariff policy on demand. The historical price range of $67 to $65 has often acted as significant support. If a demand zone is created, oil prices might gain upward momentum and stop their decline at this level. 

Spot Gold

2937/2956 Resistance

2894/2880 Support

Spot Silver

32.31/32.56 Resistance

31.54/31.22 Support

Spot gold rebounded overnight, reaching a four-day high of $2,920. This was bolstered by a weaker U.S. dollar and escalating trade conflicts following President Trump's new tariffs. After regaining the primary moving average on the daily chart, gold must remain above $2,930 to consolidate its gains and maintain the upward trend.

Dow Futures

43050/43344 Resistance

42054/41819 Support

As trade tensions escalate, investors offload risky assets, resulting in Tuesday's decline across all three major U.S. stock indices. The Dow Jones Industrial Average reached its lowest point since 14 January, declining by 3% for two consecutive days. The market is now focusing on whether it will test the early January low of around 41,800, with the 42,000 mark likely to be tested first. 

NAS100

20789/20985 Resistance

20141/19889 Support

Most large tech stocks fell on Tuesday, with Tesla dropping by over 4%, while Nvidia rose nearly 2% against the market trend. Nasdaq narrowed its losses late in the session but ended at its lowest point since mid-November. The intraday low stayed above the crucial 20,000 mark, essential for easing the current decline. 

BTC

91168/93204 Resistance

82687/80720 Support

Bitcoin (BTC) fell to approximately $83,900 on Tuesday, erasing weekend gains following President Trump's announcement of a Crypto Strategic Reserve, which triggered a "buy the rumour, sell the news" effect, resulting in over 289,000 liquidations valued at $978.62 million. Currently, Bitcoin hovers around the $87,000 mark as the market remains cautious amid regulatory and macroeconomic uncertainties. Analysts view the dip as a potential buying opportunity amidst the US tariff uncertainty, fuelling fears of an economic recession, with key resistance levels at $91,168 and $93,204, and support at $82,687/$80,720.

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