USD and SPX Breakdown on Trump Tariff Return: EUR/USD, USD/JPY, USD/CAD. In this video, James Stanley discusses:
It was a busy week in the USD and it finished with a bang as President Trump’s threat of increased tariffs sent a shockwave through macro markets. Stocks turned in an ugly performance and the weekly SPX bar finished near the lows with a bearish engulfing candlestick on the weekly. That can keep the pressure up into next week’s open.
But the USD rally that had shown cleanly in the first four days of the week pulled back, and this likely has some relationship with how the sell-off in stocks goes into next week. If Trump does soften the approach, there could be bounces in store for both markets. If he doesn’t, there could be more pain ahead. In DXY, I looked at the bullish structure that’s built since the falling wedge breakout and the bullish trend that’s formed since the Fed’s rate cut three weeks ago has a couple of different spots for higher-low support to play.
USD/JPY was fuel for that breakout earlier in the week and there’s now a couple of spots of support there, as well, such as the Fibonacci level at 150.77, or the psychological level at 150.00.
EUR/USD showed a clean bearish sequence that I wrote about on Thursday, and as I said then, chasing such a move can be dangerous.
USD/CAD still looks cleaner for USD bulls and as we near the weekly close, the pair is showing support at the 1.4000 level that was resistance back in May.
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