Next 24 hours: Investors getting reacquainted with Trump tactics
Today’s report: Markets welcome US tariff delay
Headlines around tariffs continue to dominate the market’s attention. On Monday, investors were pleased to hear the news of a one month delay on US tariffs to Canada and Mexico, and the market responded accordingly with stocks rebounding and the US Dollar selling off.
Wake-up call
- Euro worrying
- manufacturing PMIs
- PM Ishiba
- household spending
- US delays
- tariff updates
- Trump policies
- Macro themes
Peformance chart: 30-Day Performance vs. US dollar (%)
Suggested reading
- Will Donald Trump Bring Forth the Golden Age of Crypto?, D. Flanakin, RCM (February 3, 2025)
- The second-best investor of all time, C. Reilly, RiskHedge (January 31, 2025)
Chart talk: Technical & fundamental highlights
Choose pair:
EURUSD – technical overview
The Euro has been in a multi-month consolidation since bottoming out in 2022. Setbacks have since been exceptionally well supported on dips towards parity, with a higher platform sought out ahead of the next major upside extension. Look for a major bounce in the days ahead and the start to a push back towards the 2023 high at 1.1276. Only a monthly close below 1.0000 negates.EURUSD – fundamental overview
The Euro is trying to find some comfort in the news of the delays on tariffs for Canada and Mexico. At the same time, the single currency has been weighed back down into Tuesday as China tariffs take effect and China issues countermeasures on US goods. Meanwhile, the Euro has the added concern of not knowing what the US will decide when it comes to tariffs on the European Union. Key standouts on Tuesday’s calendar come from US JOLTs job openings, factory orders, Fed speak, and the New Zealand GDT auction.EURUSD - Technical charts in detail
GBPUSD – technical overview
Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The door is now open for the next major upside extension towards the 2018 high at 1.4377. Setbacks should be well supported above 1.2000 on a monthly close basis.GBPUSD – fundamental overview
UK manufacturing PMIs came in above forecast on Monday, helping to prop up the Pound. But most of the GBP gains came from broad based Dollar selling on news of delays of US tariffs on Canada and Mexico. Key standouts on Tuesday’s calendar come from US JOLTs job openings, factory orders, Fed speak, and the New Zealand GDT auction.USDJPY – technical overview
The market is looking to resume the longer-term uptrend after an intense correction in 2024. A higher low is ideally sought out above 140.00 in favor of a bullish continuation. The October monthly close back above 150.00 strengthens the case for longer-term uptrend resumption.USDJPY – fundamental overview
Though the Yen is weaker on the day amidst the news of the US tariffs on China going into effect (and subsequent China countermeasures), the currency has held up better than most on the flight to safety correlation and on the back of a BOJ monetary policy outlook that continues to lean more hawkish. Of course, traders will be focused on an upcoming meeting between PM Ishiba and President Trump for any potential insights into possible tariffs imposed on Japan. Key standouts on Tuesday’s calendar come from US JOLTs job openings, factory orders, Fed speak, and the New Zealand GDT auction.AUDUSD – technical overview
There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6000 would give reason for rethink. A monthly close back above 0.7000 will take the big picture pressure off the downside and strengthen case for a bottom.AUDUSD – fundamental overview
The Australian Dollar got a boost on the news of the US delay on tariffs to Canada and Mexico but came back under some pressure on Tuesday as China tariffs went into effect (along with countermeasures from China). On the data front, Aussie household spending showed a notable increase, while exceeding expectations. Key standouts on Tuesday’s calendar come from US JOLTs job openings, factory orders, Fed speak, and the New Zealand GDT auction.USDCAD – technical overview
A sustained hold above 1.3000 over the past several months signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in at the 1.5000 psychological barrier. Setbacks should be very well supported ahead of 1.4200.USDCAD – fundamental overview
The Canadian Dollar isn't out of the woods yet, but did get a big boost on Monday on the news of the delay to US tariffs. The currency will continue to be vulnerable to updates around tariffs and is already back under some pressure on Tuesday as China tariffs take effect. Key standouts on Tuesday’s calendar come from US JOLTs job openings, factory orders, Fed speak, and the New Zealand GDT auction.NZDUSD – technical overview
Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5469 will intensify bearish price action.NZDUSD – fundamental overview
The New Zealand Dollar has been tracking along with all of the updates out of the world of US tariffs. We had seen a nice recovery after it was revealed that tariffs on Canada and Mexico had been delayed. But selling pressure into the rally emerged as tariffs on China and subsequent China countermeasures took effect. Key standouts on Tuesday’s calendar come from US JOLTs job openings, factory orders, Fed speak, and the New Zealand GDT auction.US SPX 500 – technical overview
The longer term uptrend remains intact and dips continue to be exceptionally well supported. Critical support comes in at 5679, with only a break back below this level to compromise the structure and open the door for a more significant corrective decline. Until then, the focus remains on a continued push to fresh record highs.US SPX 500 – fundamental overview
Investors are feeling better about a soft landing in the US economy. Moreover, there has been a fresh wave of market optimism in anticipation of a market bullish Trump presidency. It will however be important to keep an eye on Trump trade policies, inflation, bigger picture economic data and the latest shift in the Fed dot plot. Any of these variables are capable of easily ruffling some feathers and we've already seen a little of this as 2025 gets going.GOLD (SPOT) – technical overview
The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and this next major upside extension into the 3000 area. Setbacks should now be well supported above 2500 on a monthly close basis.GOLD (SPOT) – fundamental overview
The yellow metal has pushed record highs in recent months with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical risk and a less upbeat global growth outlook. All of this should keep the commodity well supported over the coming months.