Financial market analysis on February 21, 2025

USD/CHF analysis on April 8, 2025The USD/CHF pair stabilized at 0.8574, reflecting the desire of investors to redistribute capital into less volatile assets. The Swiss franc is traditionally in demand as a defensive asset, but the current situation requires a deeper analysis of fundamental factors.Swiss inflation remained at 0.3%, which corresponds to the lower limit of the target range of the National Bank. However, this stable position may be disrupted by the new 31% US tariffs on imports. According to a study by Capital Economics, these measures may weaken economic activity and inflationary pressures, creating the prerequisites for lowering the interest rate to zero as early as June. At the same time, it is worth noting that the US share of Swiss exports is a significant 19%, which makes the country vulnerable to trade shocks.The dollar index is showing moderate strengthening and has reached 102.50. Paradoxically, the initiatives of the Trump administration are putting pressure not only on trading partners, but also on the US domestic economy. A recent statement by Chicago Fed President Austin Goolsbee confirmed the Fed's cautious approach - the regulator does not plan to rush to change rates, preferring to wait for new data. As a result, market expectations for policy easing dropped from 60% to 33% in May.USD/CHF technical analysis for todayThe technical picture shows that the pair continues to move within the descending channel of 0.8500-0.8760. The indicators give mixed signals: the Alligator remains bearish, while the Awesome Oscillator indicator shows signs of correction in the negative zone.Trading recommendationsUnder the current conditions, two scenarios are possible.Sales become relevant when the pair is fixed below 0.8550 with the prospect of moving towards 0.8400. We will set the protective stop loss at 0.8630.For purchases, it is necessary to overcome the resistance of 0.8630, which will open the way to testing the upper limit of the 0.8760 channel. In this case, we will place the stop loss at 0.8550.

USD/JPY analysis on April 8, 2025At Tuesday's Asian trading, USD/JPY showed mixed dynamics, consolidating near the level of 147.70. The US currency managed to partially recover after a sharp drop at the end of last week, but the fundamental background remains difficult. Investors continue to assess the risks of an economic crisis caused by a new wave of US trade restrictions. Analysts estimate the probability of a recession in the American economy this year at 60%.The Trump administration has imposed differentiated import duties ranging from 10% to 49%. A minimum rate of 10% is set for Japanese goods, which creates serious problems for key sectors of the economy, especially the automotive industry. The Japanese authorities are actively looking for ways to mitigate the effects of these measures.In its report, the Bank of Japan expressed concern that US trade policy could disrupt the cycle of wage growth and consumer prices, which are key factors for further monetary policy tightening. Kazuhiro Masaki, the manager of the Osaka Combat Department, noted the uniqueness of the current situation, emphasizing the difficulty of assessing the consequences due to its political nature. These factors will be carefully considered at the upcoming meeting on April 30 - May 1, where the rate is likely to remain at 0.5%.Today's data for Japan turned out to be mixed. The Eco Watchers current situation index dropped slightly to 45.1 points, but the balance of payments showed a significant surplus of 4060.7 billion yen, significantly exceeding expectations. Tomorrow's US Federal Reserve minutes may provide additional clarity to the monetary outlook.USD/JPY technical analysis for todayThe technical picture remains contradictory. The Bollinger indicator shows a moderate decline with an expanding range. The MACD is showing signs of an upward reversal, but it retains a bearish signal. Stochastic is in the middle zone, indicating a short-term bullish potential.Trading recommendationsThe breakdown of the 148.00 level up opens the prospect of growth to 149.09 with the protection of the position at 147.50.In the case of a rebound from 148.00 and a breakout of 147.00 down, it is advisable to consider short positions with a target of 145.00. In this case, we set the stop loss at 148.00.

In Tuesday's Asian session, after a pullback from the April highs, USD/CAD continues its corrective movement, testing the level of 1.4170. The current dynamics reflect the caution of market participants in anticipation of new drivers to determine the direction.The US currency is facing growing fears of a recession caused by a new wave of trade restrictions. The Trump administration has imposed import duties ranging from 10% to 49% on various countries, including 34% tariffs on China, which combined with previous measures reach almost 60%. The Chinese authorities have already promised mirror retaliatory measures, which may be announced this week.Despite the positive employment data in the United States (the growth of new jobs from 117,000 to 228,000), the market notes some alarming signals:- Average hourly wage growth decelerated to 3.8% YoY- An increase in the unemployment rate to 4.2%Canadian macroeconomic indicators show deterioration- Reduction of employment by 32.6 thousand instead of the expected growth- The unemployment rate rose to 6.7%- A slowdown in wage growth to 3.5%- Negative trade balance (-1.52 billion dollars)Of particular concern is the 3.6% decline in exports to the United States, especially in key sectors subject to new tariffs (automobiles, steel, aluminum, lumber).USD/CAD technical analysisThe following readings of technical indicators are observed on the daily chart- The Bollinger Band indicator narrows, following the price down- The MACD retains a weak bearish signal- Stochastic shows divergence, heading upTrading recommendationsFor sales, we should wait for a breakdown down to 1.4145 with the prospect of moving to 1.4050. We will set a protective stop at 1.4200.For purchases, a rebound from 1.4145 is needed, followed by consolidation above 1.4200, which opens the way to 1.4296. We will place the stop loss at 1.4145.The current situation requires special attention to the development of the trade conflict and the reaction of the Canadian economy to new restrictions, which may significantly affect the dynamics of the pair in the coming sessions.

USA: small business and trade policy under the gunToday, the attention of market participants in the United States is focused on the publication of the NFIB Small Business Optimism index. This indicator is traditionally considered a leading signal for the state of the domestic economy, especially in the context of consumer demand and entrepreneurs' confidence in the sustainability of macroeconomic conditions. In addition to statistics, investors are closely monitoring possible signals of a softening of the Trump administration's rhetoric on trade issues, as well as potential comments from Fed officials amid rising volatility in currency pairs and stock market assets.Denmark: industrial production under pressureDenmark publishes industrial production data for February. The January indicator showed a record decline of 11.9% seasonally adjusted, which is considered an extreme value even by the standards of the volatile Danish sector. Despite the lack of a clear explanation for the reasons for such a sharp drop, this should not yet be considered as a sign of a systemic weakening of the country's industrial sector. It is expected that the February statistics will help clarify whether the decline was a one-time effect or a signal of a deeper correction.ECB: the market is waiting for hints on policySeveral representatives of the European Central Bank are also speaking today. Against the background of tightening financial conditions, investors will closely analyze the rhetoric of officials for potential changes in the trajectory of interest rates or the level of caution when making new decisions. Any hints of a reassessment of the current monetary strategy may cause a strong reaction in the bond and currency markets.Geopolitics and trade disputes: growing tensionPresident Trump confirmed plans for direct talks with Iran on the nuclear program, but warned of possible "serious consequences" if the dialogue fails. Iran is currently rejecting this format. At the same time, China expressed its determination to introduce new retaliatory measures if the United States implements the threat of a 50% tariff increase. The Ministry of Commerce of the People's Republic of China declared its full readiness to "fight to the end," which indicates a serious escalation of the conflict.Market reaction: rumors, volatility, and risk reassessmentYesterday, rumors of a possible 90-day tariff suspension led to a violent intraday rally in the US stock market, although they were later denied by the White House. Despite this, the very fact of the market's reaction demonstrates how sensitive investors are to any sign of a de-escalation of the trade conflict. In turn, the new threat of tariffs from Trump has again caused a wave of concern. The Sentix Eurozone business confidence index dropped sharply from -2.9 to -19.5, reaching its lowest level since October 2023.Scandinavia: budget deficit and fiscal incentivesIn Sweden, the preliminary budget data for March coincided with forecasts, but the cumulative deviation in borrowing amounts to 4.8 billion Swedish kronor. In May, a review of the volume of government bond placements is expected, taking into account new budget incentives, including an increase in defense spending. This creates the prerequisites for an increase in supply on the government debt market.The EU and trade strategy: protecting interests without escalationThe European Commission has proposed a zero-for-zero mechanism for tariffs on manufactured goods as an attempt to avoid a full-scale trade war with the United States. In case of failure of negotiations, the EU is ready to apply retaliatory duties from April 15 to December 1 on a number of American goods. Alcoholic products, including bourbon and wine, were excluded from the list after pressure from individual EU countries. Voting on the list will take place on Wednesday.Stock markets: instability persistsYesterday, the European and Scandinavian markets showed sharp intraday fluctuations: first, growth based on rumors, then a sharp drop after their refutation. The total losses amounted to about 5%, the Stoxx 600 is in the correction zone with a peak drop of -16%. Investors exited all assets, including defensive ones such as telecoms and gold. Against the background of capitulation, expectations in the futures market point to a possible technical rebound of 2%.The American markets proved to be more stable. The S&P 500 index closed with a minimal decline of 0.2%, despite an initial drop of 5%. Investors switched to trading amid rising yields: the real estate and utilities sectors declined, while cyclical securities showed a recovery. In the morning, futures on American indices are up 1-2%.Currency and debt market: yields are rising, the dollar is strengtheningUS bond yields rose sharply: the US Treasury curve shifted upward, and ten-year securities added almost 20 basis points. The DXY dollar index strengthened by 0.5%, while traditional defensive currencies such as the yen weakened slightly. EUR/NOK rose 1.5%, while EUR/DKK reached its highest level since 2020. Brent is trading near USD 65 per barrel. Asian indexes started the day with gains: the Nikkei 225 rose by 6%, while Chinese and Korean markets were also up by 1-2%.The overall market picture remains tense, but the reaction of participants indicates a willingness to receive positive news. In the coming days, the White House's rhetoric on trade issues and its impact on global risk assessment will remain a key factor.

FOREX Fundamental analysis for EUR/USD on April 8, 2025The markets demonstrated exceptional sensitivity to the information background when false rumors about a possible pause in the US tariff policy caused a short-term surge in the capitalization of American stocks by $ 2.4 trillion. The subsequent rebuttal led to a symmetrical pullback, which was especially reflected in the dynamics of EUR/USD, which is traditionally closely related to the movement of stock indices.The current situation with trade restrictions continues to cause serious concern among market participants. The real average duty rate exceeded 20%, which is significantly higher than the expected 8.6% according to Goldman Sachs surveys in March. Of particular concern is the imbalance in the measures applied - for example, the United States imposed duties of 46% for Vietnam against the existing 9.4%, and 32% against 2% for Taiwan.Different countries demonstrate fundamentally different approaches to retaliatory measures:- China has taken a tough stance, imposing 34% duties and promising further retaliatory steps- The EU prefers a gradual, balanced approach with an opportunity for negotiations- Israel has proposed a zero reciprocal tariff schemeThe European strategy, despite its apparent rationality, has not yet produced results. Washington's rejection of the EU's proposals on mutual reduction of barriers to industrial goods indicates the depth of the disagreement. This is especially worrying given the potential benefits of jointly opposing Chinese exports.Stock markets on both sides of the Atlantic continue to show negative dynamics, which creates difficult conditions for EUR/USD. The pair shows pronounced session volatility, decreasing in the European session and recovering in the American session.In the current conditions, trading within a range using breakaway approaches seems to be a reasonable strategy.:- Selling in case of unsuccessful resistance tests in the 1.1000-1.1050 zone- Buying on rebounds from the 1.0850-1.0910 supports

Eurozone: indicators of investor confidence and retail salesIn April, investors in the eurozone focused on the Sentix investor confidence index and retail sales data for February. The Sentix index rose significantly in March, helped by a large-scale stimulus package in Germany. However, after the introduction of new tariffs by US President Donald Trump, investor sentiment may worsen, although this may not be fully reflected in the current data. Retail sales have been showing a decline in recent months, which corresponds to a drop in consumer confidence after a strong recovery in the second half of last year. Despite favorable conditions for increased consumption, such as a stable labor market, rising real wages and low interest rates, geopolitical uncertainty is likely to restrain consumer sentiment.Sweden: public debt and inflationIn Sweden, the Office of Public Debt has published data on the state of central government debt for February. In February, the surplus amounted to SEK 74.0 billion, exceeding the projected SEK 60.9 billion, due to higher tax revenues. citeturn0search10 In March, preliminary data on inflation was below expectations: the CPIF index was 2.3% yoy, and CPIF excluding energy and 3.0%. citeturn0search7 This decrease in inflation may ease the pressure on the Riksbank to further tighten monetary policy.USA: tariff policy and market reactionPresident Trump has confirmed his intention to impose extensive tariffs on imports, despite a significant drop in stock markets and fears of a recession. He described these measures as a necessary "medicine" to correct economic imbalances. In response, China announced the imposition of 34% tariffs on all American goods from April 10 and restrictions on exports of rare earths. citeturn0search8 These events have increased concerns about the global trade war and its potential impact on the global economy.Financial markets: reaction to macroeconomic eventsStock markets around the world have experienced sharp declines amid escalating trade disputes. Futures for the S&P 500 fell by more than 3%, and Asian markets showed the most significant decline since 2008. citeturn0news77 Investors expect the Federal Reserve may cut interest rates in response to growing recession fears. At the same time, oil prices continue to decline, reflecting concerns about a slowdown in global economic growth.In general, the current macroeconomic situation is characterized by increased volatility and uncertainty due to the escalation of trade conflicts and their potential impact on global economic growth.

Intraday analysis: pressure remainsAt the moment, the intraday direction of movement of the AUD/USD pair remains downward. The continuation of the sell-off, which began at the level of 0.6941, forms a target in the area of 0.5860, corresponding to 61.8% of the projection of the movement from 0.6941 to 0.6087, which started from the point of 0.6388. At the same time, a breakdown of local resistance at 0.6062 may temporarily weaken the bearish momentum, putting the pair's dynamics into a phase of short-term consolidation without changing the overall trend.Medium-term view: confirmation of a downtrendFrom the point of view of the medium-term structure, the current decline from 0.6941 recorded in 2024 is considered as a link in a broader downward trend that started from the 2021 maximum at 0.8006. The next target in this trend is the 0.5806 level, which is a 61.8% projection of the downward momentum from 0.8006 to 0.6169, which started from the local maximum of 0.6941. The technical picture continues to point to the predominance of bearish sentiment.The overall picture: the downward trend persistsThe overall outlook for the AUD/USD pair remains negative until the quotes overcome the resistance around 0.6388. This level plays a key role in determining the direction of the medium-term trend: only consolidation above it can cast doubt on the current downward structure. In the meantime, the trading instrument maintains a steady downward trend, and any attempts at growth are perceived as corrective waves within a bearish trend.

FOREX Fundamental analysis for EUR/USD on April 7, 2025The Trump administration's policy has led to an unexpected result - lower Treasury yields, albeit for an alarming reason - growing fears of a recession. This effect, despite its contradictory nature, can be considered a partial victory for the White House. However, the recent strong US employment report temporarily changed the mood, giving the "bears" on EUR/USD the opportunity to regroup.Finance Minister Bessent continues to insist on the long-term strength of the dollar, while analysts at Pictet Asset Management predict its weakening by 10-15% over a five-year period. JP Morgan's revision of the US GDP forecast from 1.3% to -0.3% for 2025 looks even more alarming, which contrasts with the optimistic statements of officials.Although the March job growth of 228,000 looks impressive, it is important to consider several factors:- The data reflects the situation before the announcement of new tariffs- The previous figures have been revised downwards- An increase in unemployment to 4.2% indicates a possible deterioration in the trendThese nuances allow us to consider the current figures as a temporary lull before the possible deterioration of the situation.The market, which expected four rate cuts in 2025 due to fears of stagflation, is now forced to adjust its forecasts. Chairman Powell maintains a cautious stance, while Trump publicly criticizes the Fed for being slow, demanding more drastic policy easing.China's announcement of 34% duties on US imports has put pressure on EUR/USD. However, the current situation is fundamentally different from the trade war in 2016, when the dollar retained the status of an unconditional safe haven asset. Now we are seeing an unusual correlation between the dollar index and the S&P 500 - both assets are moving down at the same time.The previous EUR/USD sales strategy from 1.1050 proved its effectiveness. However, further dynamics will depend on two key factors.:1. The behavior of the American stock market2. The bulls' ability to keep the pair above the 1.1000 levelIf US stocks continue to fall and consolidate below 1.1000, the pressure on the euro may increase. Otherwise, a return to the upward trend is possible. The current situation requires special flexibility in approaches and careful monitoring of both fundamental factors and technical levels.