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Tariffs and trade wars – US stocks mixed – DAX tests AUG lows. USD pause – Gold – EUR jump – USDJPY back at 105.

Mar 5, 2018 | Daily Market Outlook

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US markets – had another volatile session seeing strong selling and a buyer recovery. The Dow Jones trading close to 400 points lower at one stage in the session to settle 70.92 points lower. The S&P500 added 13.58 and the NASDAQ gained 77.31 points in a good showing from buyers. Healthcare was the best performing sector. Tariffs announced last week continue to drive sentiment, yes we did see some heavy selling on the release last week markets look to have found a possible value point on Friday.  The daily US30 chart show’s buyer support from 25,253, did the market overreact? We’ll see if buyers can continue gain further momentum this week.

Oil – followed stocks with a strong recovery on Friday to close slightly higher at $61.33. Sellers dictated most of Friday’s session taking price as low as $60.03. $61.00 continues to act as support while buyers can continue to hold this line we could see further rally attempts.

European markets – had a horror session on Friday, losses look overextended now. The FTSE, CAC and DAX all making triple figure falls! The DAX closed 277.23 pts lower on Friday to cap off a horror week. The GER30 CFD lost 572 points in 4 trading sessions. The FTSE lost 105.74 points and the CAC tumbled losing 125.98 points. US tariff’s and earnings continued to damage buyer confidence, LafargeHolcim reported Friday that a 3.8 billion Swiss franc ($4.04 billion) impairment charge contributed to a net loss of 3.13 billion Swiss francs for its fourth quarter. The European Commission responded to Trump’s proposed tariffs; saying it won’t sit idly and will take the decision to the World Trade Organization (WTO). Trump’s decision could potentially lead other countries to raise tariffs on products that U.S. consumers buy, this could set up a trade war.

Forex – USD softened to most pairs but continued its drive to the CAD. The USDCAD has been an unstoppable force last week, with buyers continuing this morning. Price adding 62 pips after adding 243 last week. Traders keep a good eye on the current resistance at 1.2895 this level hasn’t been beaten yet, buyers failed on three attempts in 2017. The USDJPY lost further ground but did close off its weekly low. Price closed 48 pips lower on Friday back in the 105 handle its lowest close since November 2016. The Japanese Yen continued to knock the majors around on Friday, the EUR fighting back the strongest after putting in a brief new weekly low. The EURUSD showed strong buyer interest to end the week. Price closed 51 pips higher. Gold took advantage of a weaker USD and continued political uncertainty too close $6.20 higher on Friday. 1315 continues to act as short-term support.

EURUSD has hit a solid supply area at 1.2355. Five rallies have been stopped by sellers at this level. With the USD continuing to trade shaky will we see buyers finally force a breakout?

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST

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