MARKET OVERVIEW
Impact of Tariffs on Forex Chart Patterns and Global Markets
On February 2, 2025, President Donald Trump signed an executive order imposing new tariffs on imports from Canada, Mexico, and China. The measures include a 25% tariff on most goods from Canada and Mexico and a 10% tariff on energy products from Canada and various imports from China, effective February 4, 2025. These tariffs are expected to influence forex chart patterns and global economic stability.
In response, Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum announced equivalent tariffs on U.S. imports. The Chinese Ministry of Commerce plans to file a complaint with the WTO, potentially impacting worldwide economic indicators and global trade flows.
Market Reactions and Economic Indicators
The tariff announcement triggered declines in Asian markets, with the Hang Seng Index falling 1.9% and Japan’s Nikkei 225 dropping 2.4%. Economists warn of inflationary pressures and disruptions in breakout trading methods due to potential trade wars.
Commodities Overview
GOLD
After hitting a record high of 2817.100, GOLD retracted below 2789.390, testing the EMA200. Despite this, a bullish bias remains. The dollar’s strength, driven by tariffs, challenges GOLD’s rally, influenced by algorithmic trading signals. Major institutions may hedge against dollar risks by increasing GOLD holdings.
SILVER
SILVER prices are expected to remain stable until GOLD reaches new highs. The EMA200 offers strong support, with banks likely to include SILVER in capital distribution strategies as a hedge, especially if GOLD approaches $3,000 per ounce.
Forex Market Analysis
DXY
The dollar surged post-tariff announcement, driven by trade war fears and inflationary pressures. This strengthens the dollar’s appeal in breakout trading methods.
Major Currency Pairs
- GBPUSD: Bearish trend with continued downside momentum.
- AUDUSD: Declines due to inflation, reflecting strong moves in forex chart patterns.
- NZDUSD: Potential for gap coverage before further declines.
- EURUSD: Holding better than most but remains bearish.
- USDJPY: Bullish momentum influenced by Japan’s economic stance.
- USDCHF: Stable amid volatility; expected to rise after pullbacks.
- USDCAD: Strong buying pressure due to direct tariff impacts, aligning with capital distribution strategies.
Key Insights from COT Report
- Strong: USD (4/5), GOLD (5/5), SILVER (4/5)
- Weak: AUD, GBP, CAD, EUR, JPY, CHF, NZD
Understanding these dynamics helps traders refine strategies, leveraging forex chart patterns, optimizing capital distribution strategies, and navigating shifts in worldwide economic indicators.
