Today Forex Market Analysis

Today Forex Market Analysis

Global Markets Respond to Trump’s Tariff Announcements and Currency Market Analysis

Forex Market Analysis: Global financial markets faced volatility following President Donald Trump’s latest tariff declarations. On Monday, the Dow Jones Index (US30) dipped by 0.28%, the S&P 500 Index (US500) fell by 0.76%, and the Nasdaq Technology Index (US100) declined by 0.84%. The market reacted sharply to the announcement of new tariffs: 25% on Canada and Mexico and 10% on China, with hints of future levies on European goods. Analysts warn that these tariffs could lead to a trade war, potentially stalling global economic growth. Goldman Sachs predicted a 5% drop in U.S. stocks due to the anticipated hit to corporate earnings, while RBC Capital Markets estimated declines ranging from 5% to 10%. However, losses were partially recovered when President Trump agreed to delay tariffs on Mexico and Canada for a month following successful negotiations.

The Canadian dollar strengthened to 1.45 per U.S. dollar, rebounding from a two-year low after Prime Minister Trudeau confirmed the suspension of U.S. tariffs on Canadian goods. While this brought temporary relief, concerns remain over Canada’s economic outlook, as GDP growth in December was recorded at just 0.2%, bringing the annualized growth rate for 2024 to a modest 1.4%.

Similarly, the Mexican peso (USD/MXN) recovered to 20.5 per U.S. dollar after briefly hitting a three-year low. The currency rebounded following news that Mexico and the U.S. made progress on border negotiations, which led Trump to delay tariffs temporarily. Investors remain cautious, as any setback in these talks could trigger further declines in the peso.

European Markets Under Pressure

European equities were also hit by trade tensions. Germany’s DAX (DE40) fell 1.40%, France’s CAC 40 (FR40) declined 1.20%, Spain’s IBEX 35 (ES35) lost 1.32%, and the UK’s FTSE 100 (UK100) closed down 1.04%. The uncertainty surrounding U.S. tariffs and their impact on European exports has weighed heavily on investor sentiment.

Crude Oil and Precious Metals Movement

WTI crude oil hovered around $73 per barrel after OPEC+ confirmed a gradual increase in production. Additionally, OPEC+ removed the U.S. Energy Information Administration (EIA) from its monitoring list, a decision that follows previous tensions with the Trump administration. The President has repeatedly urged OPEC to boost supply, arguing that high oil prices benefit Russia amid ongoing geopolitical conflicts.

Meanwhile, silver (XAG/USD) surged past $31.5 an ounce, marking its highest level since early December. Optimism surrounding increased industrial demand, especially in electrification technologies, and supply shortages predicted by the Silver Institute for 2025, have fueled the metal’s rally.

Asian Markets React

Asian markets mirrored the global downtrend. Japan’s Nikkei 225 (JP225) dropped 2.66%, China’s FTSE China A50 (CHA50) declined 0.37%, Hong Kong’s Hang Seng (HK50) edged down 0.04%, and Australia’s ASX 200 (AU200) fell 1.79%. Market sentiment remains cautious as the U.S. and China prepare for high-level trade talks later this week.

Beijing has called for a “frank dialogue and strengthened cooperation” while expressing concerns that the tariffs will disrupt normal trade relations. China has also indicated plans to file a complaint with the World Trade Organization over the imposed tariffs.

Today Forex Market Analysis (Currency)

EUR/USD

• Previous Close: 1.0344
• Daily Change: +1.01%

The euro remains under pressure, trading near $1.03, as Trump considers imposing tariffs on the Eurozone due to the U.S. trade deficit with Europe. Eurozone inflation rose to 2.5% in January, exceeding market expectations, with core inflation steady at 2.7%.

Key Levels:

• Support: 1.0272, 1.0239, 1.0178
• Resistance: 1.0342, 1.0381, 1.0433

GBP/USD

• Previous Close: 1.2449
• Daily Change: +1.23%

The British pound climbed above $1.24 after Trump postponed tariffs on Mexico and Canada. However, concerns remain over potential tariffs on the UK and EU. Market sentiment is also influenced by growing expectations of a Bank of England rate cut.

Key Levels:

• Support: 1.2383, 1.2344, 1.2270
• Resistance: 1.2472

USD/JPY

• Previous Close: 154.75
• Daily Change: +0.01%

Investors are focused on Japan’s upcoming wage data release, which could influence the Bank of Japan’s monetary policy. The BOJ recently raised interest rates and remains open to further adjustments if economic conditions warrant.

Key Levels:

• Support: 155.04, 154.39
• Resistance: 156.02, 156.74, 157.18, 158.19

XAU/USD (Gold)

• Previous Close: 2816
• Daily Change: +0.57%

Gold remained above $2810 per ounce as investors sought safe-haven assets amid global trade uncertainty. With inflationary pressures mounting due to tariffs, gold is becoming an increasingly attractive hedge.

Key Levels:

• Support: 2795
• Resistance: 2830, 2900

Market Outlook

With trade tensions escalating and market volatility rising, investors should remain cautious. The upcoming U.S.-China negotiations will be a critical event to watch, as any progress—or lack thereof—could significantly impact global markets.

Stay tuned for further updates and expert insights from Rana Das, CEO of Forex Wave Expert.