US stocks experience a sharp decline amid renewed trade tariff concerns. The Japanese yen and gold rally, while the US dollar loses its safe-haven appeal. Our analysis covers key levels and market reactions.
Gold exploded to another fresh all-time high while US stock indices wobbled
Wednesday’s stellar gains on the US stock market have fizzled out, and we are at risk of a bull trap as the reality of US-China tariff woes sets in.
The major US stock indices staged bearish reactions below their respective 20-day moving averages, acting as key intermediate resistances. The S&P 500 tumbled 3.5%, the Nasdaq 100 4.2%, and the Dow Jones Industrial Average 2.5%
Risk-off sentiment resurfaced, and safe-haven currencies (JPY & CHF) and Gold exploded to the upside.
Gold (XAU/USD) leaped 3% yesterday and continued to have a positive follow-through in today’s Asia with an intraday gain of 1% to hit a fresh all-time high at US$3,219 at this time of writing.
The USD/JPY experienced a significant bearish breakdown yesterday, falling 2.2% and breaching its key support level at 144.80. The downward momentum continued in today’s Asian session, with the pair extending its losses by another 0.8% to hit a six-month low of 142.87.
On the flip side, the U.S. dollar appears to have lost some of its safe-haven appeal, as the EUR/USD surged to a two-year high of 1.1385 during today’s Asian session.
On the data front, today's key focus will be the Q1 earnings releases from four major U.S. financial institutions—JPMorgan, Morgan Stanley, BlackRock, and Wells Fargo, scheduled to be announced before the start of the U.S. session, as well as the preliminary University of Michigan’s US Consumer Sentiment for April.
