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Overview
USD: Temporary Rebound, Continued Weakness
- The dollar is struggling to maintain its position as global markets shift focus away from U.S. assets.
- Key levels to watch: 103.00 - 102.50 support zone.
- A break below 103.200 could accelerate further downside movement.
JPY: Rate Pause Priced-In
- The Bank of Japan is maintaining its 0.5% interest rate, taking a cautious stance.
- USDJPY is on a steady climb, with potential for further upside if the yen weakens.
- Key level to break: 149.936, with a target of 151.305.
AUD: Consolidating for Potential Upside
- Aussie is currently in a 0.63537 - 0.63783 Fair Value Gap zone.
- Upside confirmation requires a break above 0.63909 - 0.64083.
- Strength tied to commodity exports and China’s demand.
NZD: Breakout Strategy in Play
- Kiwi broke out of its range after support at 0.56653 - 0.57187 FVG.
- Long opportunities at 0.57553 - 0.57978 for a pullback trade.
- If 0.58311 is broken, we could see further gains.
EUR: Strengthening on German Stimulus
- Germany’s €500B spending plan is boosting euro confidence.
- The euro is testing 1.09372, with a breakout above 1.09546 signaling continued upside.
- ECB policy and inflation risks could bring volatility.
GBP: BoE Rate Pause Impact
- Bank of England expected to keep rates at 4.5%, limiting GBP’s upside.
- GBPUSD is approaching the 1.30 level, with 1.30478 as a key resistance.
- Possible scenarios: Breakout, rejection & pullback, or a full correction.
CAD: Oil-Driven Strength vs. USD Weakness
- Canadian dollar performance is closely tied to oil prices.
- USDCAD remains range-bound, awaiting a breakout catalyst.
- A weaker dollar could support CAD strength in the coming weeks.
CHF: Safe Haven Resilience
- Swiss franc remains one of the strongest currencies as investors seek safety.
- Market risk aversion could keep CHF in demand.
The term “Trumpcession” has resurfaced as fears of an economic slowdown, triggered by former President Donald Trump’s policies, loom over the markets. While the U.S. economy remains resilient in many ways, trade wars, protectionist policies, and uncertainty surrounding fiscal decisions have weakened investor confidence.
U.S. Markets Losing Their Edge
Once seen as the go-to investment hub, the U.S. stock market is now facing competition from emerging economies and foreign capital outflows. High inflation, policy unpredictability, and fears of stagflation have made global investors reconsider their exposure to U.S. assets. Meanwhile, trade-reliant economies like China and Germany are shifting their focus to internal growth strategies, reducing dependence on U.S. markets.
Global Market Shifts
Performance of Major Global Indices
- Performance of Major U.S. Tech Stocks: Major U.S. technology companies have faced significant losses amid the market sell-off. For instance, Tesla's shares have declined by approximately 41%, while Apple and Alphabet have seen decreases of about 15% and 13%, respectively.
- Hang Seng Index: Hong Kong's Hang Seng Index has experienced significant growth, with a year-to-date gain of 23.3% as of March 17, 2025. This surge is largely attributed to advancements in Chinese artificial intelligence technologies, which have boosted investor confidence in the region.
- FTSE 100: The UK's FTSE 100 has also shown robust performance, reaching an all-time high by the end of February 2025. The index increased by 1.6% in February, adding to the 6.1% rise observed in January, reflecting strong investor sentiment in the UK market.
- German DAX: Germany's DAX Index has recorded a year-to-date gain of 15.29% as of March 17, 2025. This growth is supported by substantial government spending plans, including a €1 trillion investment in infrastructure and defense, which have bolstered economic confidence and investor interest.
Shifting Focus to European & Asian Markets
With growing uncertainty surrounding the U.S. economy and dollar stability, investors should consider diversifying into European, Asian, and Oceania markets for more balanced opportunities. Key factors driving this shift include:
- Hang Seng Index Recovery – Rebounding from lows, supported by China’s economic stimulus and tech sector resilience.
- FTSE 100 Strength – Benefiting from energy sector gains, strong corporate earnings, and a relatively stable economic outlook.
- German DAX Growth – Driven by industrial expansion, investment in renewable energy, and continued economic resilience in Europe.
- Oceania Currencies (AUD & NZD) – Strengthening due to commodity exports, China’s demand, and central bank policies.
- European Currencies (EUR & GBP) – Showing relative stability amid economic adjustments and monetary policy shifts.
- Swiss Franc (CHF) Resilience – A strong safe-haven currency, benefiting from Switzerland’s economic stability and risk-averse market sentiment.
While the U.S. remains a major financial hub, diversifying towards European, Asian, and Oceania markets can offer better risk management, resilience, and long-term growth potential in a shifting global economic landscape.
Dollar and Foreign Currencies Performance
For previous references, checkout my market analysis as our previous forecasts is materializing:
https://acy.com/en/market-news/market-analysis/us-market-tumbles-recession-2025-j-o-0312025-135632/
USD: Temporary Rebound, Continued Weakness
4-Hour
After reacting from the 4-Hour Fair Value Gap, Dollar is now threading on thin line for potential recovery.
1-Hour
A break of 103.200 - 103.197 would potentially propel price for further downside.
103.00 - 102.50 target is still in effect.
With Dollar’s continued downside move, we’d likely to see a rally for foreign currencies against the Dollar.
JPY: Rate Pause Priced-In
While inflation and wages are rising, policymakers remain cautious about external risks. Analysts expect the BOJ to take a gradual approach to future rate hikes, prioritizing economic assessment before any policy changes.
The Bank of Japan (BOJ) is likely to maintain its 0.5% interest rate in the near term, taking a cautious stance amid global uncertainties, including U.S. trade policies.
Daily
With Yen breaking down of the support and the moving averages and an impending rate policy decision, we’d likely see further downside with Yen.
With momentum losing on Yen, we could see currencies paired with Yen to be on the upside.
USDJPY: On A Steady Climb with Yen Rate Pause
4-Hour
A break of 149.936 level can be a long opportunity with targets set at 151.305 level.
AUDUSD
4-Hour
Currently, Aussie is consolidating at the 0.63537 - 0.63783 Fair Value Gap level.
For potential upside move, we are looking for:
- Continued weakness on the Dollar with supports breaking.
- Break of 0.63537 level up-to the 0.63909 - 0.64083 level for momentum to kick in.
NZDUSD
Daily
After the 0.56653 - 0.57187 Fair Value Gap supported price for upside continuation, we now have broken out of the range.
4-Hour
Potential levels for long opportunities:
- Pullback Trade Strategy Parameters
- 0.57553 - 0.57978
- Once price touches this level, wait for a short sideways and breakout of that range on the lower timeframes 1-hour to 4-hour timeframes.
- Fibonacci levels for confluence:
- 0.618 - 0.705 Level20 Moving Average
- Stops can be set behind the sideways created.
2. Breakout Strategy Parameters
- Break of 0.58311 level with 4-hour candle closure above.
- A short sideways range at the breakout level at a much lower timeframe.
- Breakout of the short sideways.
- Stops behind at 0.58612 support level of the previous range.
EURUSD
Germany Approves Historic €500 Billion Defense and Infrastructure Spending Plan
Germany's parliament has approved a historic €500 billion spending package aimed at bolstering defense capabilities and revitalizing infrastructure. This decision marks a significant shift from the country's longstanding fiscal conservatism, allowing increased borrowing to address pressing needs.
Implications:
- Economic Outlook: The spending plan has boosted investor confidence, with economic indicators such as the ZEW index rising to 51.6 in March. Financial markets have responded positively, anticipating renewed economic momentum.
- Euro Boost: Market confidence surged, strengthening the euro as Germany commits to growth and defense. The ZEW Economic Sentiment Index rose to 51.6 in March.
- Inflation Risks: Large spending may drive inflation, pressuring the ECB to adjust rates, leading to euro volatility.
- Long-Term Growth: Infrastructure investment supports Eurozone strength, making the euro more attractive.
- Debt Concerns: Higher borrowing could weaken the euro if markets fear fiscal instability.
- Geopolitical Impact: Increased global influence may enhance the euro’s safe-haven appeal over time.
Daily
With rising budgets in the Eurozone and weakening sentiment among Western counterparts, the euro maintains its upward momentum. It is currently testing the 1.09372 level, signaling potential for further gains.
4-Hour
1-Hour
We are seeing a healthy price action inside the range on Euro as price is currently consolidating above the 50% of the range.
For sustained strength:
- Price must consolidate more above the 50% of the range.
- 50% level must support price.
- A successful breakout of 1.09546 level would heighten the strength of Euro.
GBPUSD
The BoE is expected to keep interest rates steady at 4.5% in its upcoming meeting. This decision underscores a cautious approach amid global economic uncertainties and mixed domestic economic signals.
A rate pause could weigh Pound down vs Euro in terms of strength.
Daily
Price is trading above the moving averages, reinforcing bullish momentum with target set at 1.30478.
4-Hour
Price is currently around 1.29432, close to the psychological 1.30 level.
Possible Scenarios:
- Bullish Continuation: A break above 1.30478 could push the Pound higher, possibly testing 1.3100+ level.
- Rejection & Pullback: If resistance holds, price may retrace to the 10-20-Day MA for a potential support buys.
- Breakdown Below Support: If price drops below the short-term 10 Day MA, a correction toward the 20 MA or 1.2800 level could occur.
USDCAD
The USD/CAD currency pair has experienced notable fluctuations recently, influenced by escalating trade tensions and economic policies between the United States and Canada. The OECD forecasts that these tariffs will reduce economic growth in both countries, with Canada's growth slowing to 0.7% in 2025.
Daily
With ongoing trade tensions, USDCAD suffers are no clear trajectory is seen in price action.
Best approach for USDCAD is wait for a break of the range on the daily for confirmed direction.
Strategic Approaches:
As we wait for clear signs of winning the tug, we’d like to consider these indicators that could set the trajectory on USDCAD:
- Monitoring Trade Policies: Stay informed about new tariffs or trade agreements that could impact USD/CAD.
- Economic Indicators: Pay attention to GDP growth rates, employment data, and inflation figures from both countries.
- Diversification: Consider diversifying portfolios to include assets less affected by U.S.-Canada trade relations. Eurozone, Asian and Oceania Markets could be a better alternative.
USDCHF
Daily
4-Hour
USDCHF remains in a strong downtrend, with both the Daily and H4 charts aligned bearishly. Institutional order flow shows a preference for selling, reinforced by both technical structure and fundamental factors.
Fundamental Factors Driving USDCHF
- USD Weakness – Recent economic data suggests a potential slowdown in U.S. growth, reducing demand for the dollar.
- Swiss Franc Strength – The CHF remains a safe-haven asset, benefiting from global uncertainty and risk-off sentiment.
- Interest Rate Differentials – The Federal Reserve's stance on potential rate cuts contrasts with Switzerland’s stable policy, favoring CHF appreciation.
Trade Plan
- Bias: Bearish unless price reclaims key resistance zones, primarily at 0.88640 level.
- Sell Zone: Look for entries at H4 0.87701 - 0.87884 FVG if price retraces.
- Target: Next liquidity low at 0.87650 and below.
- Stop Loss: Above recent swing high and FVG invalidation.
Confirmation: Lower timeframe rejection (M15/M5 FVG + liquidity sweep) strengthens trade probability.
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