Copper continued its run to the upside reaching a new all time high of $5.37 before coming off. The price is at $5.24, up $0.03 or 0.59%. From the low on January 2, to the high today, the price has moved up 34.18%.
From the Fed today, Minneapolis Pres. Neel Kashkari was a bit more dovish in his comments today. He described the current shift in market sentiment as the most dramatic since the COVID era, attributing much of it to growing uncertainty around tariffs. He noted that a significant portion of the sentiment change is driven by concerns over tariffs, suggesting that the resulting hit to business and consumer confidence could potentially have a greater economic impact than the tariffs themselves. Kashkari emphasized the importance of resolving trade uncertainty, stating that doing so could help restore lost confidence. He also warned that the longer this confidence shock persists, the more meaningful and lasting its effects may become.
On the otherhand, St. Louis Fed President Musalem was more hawkish on worries of 2nd round effects from tariffs on inflation.
Despite his hawkish tone—being the first Fed official in this cycle to explicitly raise the possibility of rate hikes—he also acknowledged the balance of risks, noting that if unemployment rises, cuts could still be warranted even in the face of tariffs. He also highlighted that recent surveys show more businesses plan to raise prices in the coming months, suggesting growing pricing pressures.
The USD is trading higher on the day vs the major currencies. The biggest gains were vs the JPY and the GBP by 0.42%. The USD gained 0.36% vs the EUR. Versus the CAD, AUD and NZD, the greenback was higher by 0.14% or less on the day.
Technically:
EURUSD: EURUSD initially attempted to hold support within a swing area between 1.07609 and 1.07767. A corrective move higher reached the next swing area near 1.0804 but encountered strong selling pressure. The pair then fell to fresh session lows in the final hour of trading, driven by hawkish Fed rhetoric and reports from Politico suggesting EU tariffs could be set between 20% and 25%—above the expected 20%. EURUSD bottomed at 1.0745, with the next key support seen at the rising 200-day moving average near 1.0730. Also in focus is the 38.2% retracement of the rally from the February 28 low at 1.07266, a level that could attract dip buyers and lead to some profit-taking from shorts. A break below this level, however, could trigger further downside momentum.
GBPUSD: Cable broke below its 100-bar moving average on the 4-hour chart during the European session and remained under that level into the US close (currently at 1.2922). This moving average aligns closely with the 61.8% retracement of the drop from the September 2024 high, adding to its technical significance. On continued weakness, the next downside target is the swing area between 1.2831 and 1.2843.
USDJPY: USDJPY saw choppy price action around the swing zone between 150.11 and 150.28. Buyers stepped in just above the psychological support at 150.00 during the European morning session. Later in the day, a US session pullback found support near the high end of that swing area at 150.28. Heading into the close, the pair is trading at 150.525, holding near intraday highs.
NZDUSD:During the Asia-Pacific session, NZDUSD found support just ahead of its rising 200-bar moving average on the 4-hour chart (currently at 0.5713). The pair then staged a rally, breaking above a key cluster of moving averages—the 100-bar moving average on the 4-hour chart, the 100-day moving average, and the 100-hour moving average—before testing the 200-hour moving average at 0.5763. However, the rally lost momentum, and the price has since retreated below the trio of 100-bar moving averages, now clustered between 0.5731 and 0.5736. With the pair currently trading at 0.5725, holding below this zone keeps the short-term bias tilted to the downside. A move back above the moving average cluster would shift the near-term outlook back to the upside.Dow industrial average -132.71 points or -0.31% at 42454.79S&P index -64.45 points or -1.12% at 5712.20. The S&P index moved away from it's 200 day moving average of 5756.21 after trading above and below the moving average level over the last three trading days. NASDAQ index -372.84 points or -2.04% at 17899.01.Russell 2000 fell -21.54 points or -1.03% at 2073.83
In the US debt market, yields are higher:
2-year yield 4.020%, +3.7 basis points5-year yield 4.098%, +4.0 basis points10 year yield 4.3557%, +4 point basis points30 year yield 4.706%, +5.1 basis pointsCrude oil is trading higher by $0.88 at $16.88. Gold is trading up $1.77 at $3021.50 and Bitcoin is trading down $149 and $87,279.
This article was written by Greg Michalowski at www.forexlive.com. Read More Details
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