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US Dollar Index
US Dollar index hasn’t been doing much lately. We just got the strong downward push triggered by the German defence spending news which saw EU-US yield differentials jumping in favour of the Euro. As a reminder, the US Dollar Index (DXY) is basically EUR/USD upside down as the Euro makes up for 60% of the index.
This is harder to square but the greenback will most likely be influenced by the risk sentiment following the catalyst as positive news should keep rate cuts expectations around two for this year, while negative news could push those to four or more.
US OPEN
US futures modestly lower amid tariff reports, GBP lags & EUR/USD attempts to reclaim 1.08
Good morning USA traders, hope your day is off to a great start!
Here are the top 5 things you need to know for today’s market.
5 Things You Need to Know
Tariffs in focus amid reports that Trump could implement copper tariffs in weeks, elsewhere reports that Canada could find some reprieve
European bourses opened firmer but have since slumped, US futures are in the red but only modestly so
GBP lags after UK CPI, EUR/USD attempts to reclaim 1.08, USD/JPY rebounded overnight but is off highs
Gilts gapped higher on data and extended but have retreated to opening levels into the Spring Statement, USTs softer while Bunds are firmer but only modestly so
Crude continues to inch higher with a handful of factors underpinning, TTF slips as talks continue, Copper soared on tariff updates but has since pulled back
Market Could Be Underpricing U.S. Tariff Risks For Euro
The market is underpricing the risk to the euro from U.S. reciprocal tariffs set to take effect on April 2, ING’s Chris Turner says in a note. “The EU (led by Germany) runs a large trade surplus with the U.S. and will likely, alongside China, be at the forefront of Washington’s reset on global trade.” The euro last trades flat at $1.0793 and ING expects it to fall to $1.05 by the end of the second quarter due to U.S. tariffs.
DAX – ger30 4H
Resistance at 23.200 held firmly and sent DAX towards supports : 22.950 & 22.700
So far they are holding.
Next 4h bar opens in cca 50 min, and depending on the close of this one we’ll have following:
–Â Â Â Â Â Â Â Â Â Above 22.970 will give a chance for DAX to try Up again
–Â Â Â Â Â Â Â Â Â Below 22.950 DAX might dive seriously
Last support is at 22.725 – loss of opens a way for 22.425
EURUSD DAILY – 4 DAYS IN A ROW
1.08 has printed 4 days in a row… the longer this pattern goes on the greater the risk of a directional move once it is broken (note what happened at 1.09).
Key supports: 1.0777 (double bottom) , 1.0765
Key resistance: 1.0830
See JP’s timely post about EURGBP topping out and how EURUSD lost its bid after.
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