Global markets under pressure: Safe-haven demand rises amid tariff uncertainty and ECB policy caution

US Dollar Index (DXY)

Technical outlook: Bearish.

• The daily chart highlights a significant downside breakdown, with DXY trading around 104.22 after breaching the 200% Fibonacci extension near 104.45.

• The RSI at 29.5 indicates the dollar is entering oversold territory, but no clear reversal signal is evident.

• The MACD remains in negative territory, showing accelerating bearish momentum, consistent with risk-off flows.

Analysis:

The dollar’s sharp decline reflects a shift in sentiment as markets digest Trump’s tariff exemptions and weak private payroll data, which raised concerns about the labor market’s resilience. Despite safe-haven demand for USD in recent weeks, the dollar is under pressure from dovish expectations on future Federal Reserve policy if economic data continues to deteriorate.

FX implication:

Further downside is possible toward the 261.8% extension at 103.38, especially if today’s economic data (jobless claims, services PMI) disappoints. However, the oversold conditions may trigger short-term corrective rebounds.

Gold (XAU/USD)

Technical outlook: Consolidation with Bullish Bias.

• 4-hour chart shows gold trading near $2,899, after facing rejection from the Fibonacci 61.8% retracement at $2,907.

• Short-term support is forming near $2,884, aligning with the 127.2% Fibonacci extension.

• RSI (47) is neutral, while MACD is showing flattening momentum after prior bullish pressure.

Analysis:

Gold’s initial bid reflected the deteriorating risk sentiment tied to equity weakness and tariff uncertainty, though the rejection near $2,929 suggests a pause in bullish momentum. If safe-haven demand increases, particularly tied to the ECB’s dovish stance, gold could re-test the $2,929 zone and potentially move toward $2,950.

FX implication:

Gold remains a preferred hedge against economic uncertainty, but short-term consolidation is likely unless risk conditions worsen. Above $2,929, the next upside target stands near $2,950, while a break below $2,884 could accelerate declines toward $2,855.

USD/JPY

Technical outlook: Bearish.

• USD/JPY is trading around 147.96, breaking below the 100% Fibonacci retracement at 148.56.

• RSI at 32.9 signals proximity to oversold levels, though no confirmed reversal.

• MACD shows deepening bearish momentum, suggesting continuation of the current downtrend.

Analysis:

The yen is strengthening as risk-off flows dominate, exacerbated by softer U.S. data and growing concerns about ECB policy divergence, which favors funding currencies like the yen. The break below 148.00 opens the path toward the 200% Fibonacci extension at 145.82.

FX implication:

Expect continued JPY strength in risk-off conditions, particularly against cyclical currencies (AUD, CAD) and the euro. Short-term pullbacks toward 148.56 would likely face selling pressure.

GBP/USD

Technical outlook: Bullish but Overextended.

• GBP/USD is testing 1.2865, sitting just below the 200% Fibonacci extension at 1.2872.

• RSI at 68.9 is approaching overbought territory.

• MACD remains positive but shows signs of slowing upward momentum.

Analysis:

Sterling’s surge reflects a mix of U.S. dollar weakness and resilient UK economic data, though the approach of key resistance near 1.2875-1.2900 could prompt some consolidation. Any dovish shift from the ECB could further support sterling against the euro, indirectly helping GBP/USD.

FX implication:

While the trend remains bullish, upside may be capped near 1.2875-1.2900, with corrective pullbacks toward 1.2780 possible. A break above 1.2900 would target 1.2978.

EUR/GBP

Technical outlook: Rebound Underway.

• EUR/GBP has rebounded sharply to 0.8382, piercing above the 200% Fibonacci extension at 0.8367.

• RSI (62.9) reflects strengthening momentum, while MACD is crossing into positive territory.

Analysis:

The euro’s rebound against sterling likely reflects positioning ahead of the ECB meeting, with some covering of short euro positions in anticipation of guidance clarity. However, if the ECB delivers a dovish cut with uncertain forward guidance, EUR/GBP could struggle to hold above 0.8385.

FX implication:

Near-term bullish momentum could extend toward 0.8410, but upside is likely limited without more hawkish ECB communication. Failure to hold above 0.8330 would reinstate the broader bearish trend.

S&P 500 (US500)

Technical outlook: Bearish.

• The S&P 500 is hovering near 5,789, sitting just above the 200% Fibonacci extension at 5,785.

• RSI (32) is approaching oversold territory, but momentum remains weak.

• MACD shows persistent negative momentum, confirming the bearish structure.

Analysis:

Despite Wednesday’s tariff-driven rebound, the S&P 500 is vulnerable amid rising economic uncertainty, persistent inflation concerns, and weaker corporate guidance. The 5,785 support zone is critical, and a break lower would expose the 261.8% extension near 5,753.

FX implication:

Prolonged equity weakness would reinforce safe-haven demand for JPY and CHF, while commodity currencies would remain pressured. A confirmed break below 5,785 could trigger accelerated risk-off sentiment, further weighing on USD/JPY.

Brent Crude Oil (UKOIL)

Technical outlook: Bearish with Stabilization Attempts.

• Brent crude is attempting to stabilize near $69.82, close to the 261.8% Fibonacci extension at $69.48.

• RSI (28.8) is deeply oversold.

• MACD remains heavily negative, confirming strong bearish momentum.

Analysis:

Oil’s prolonged decline reflects a mix of supply concerns, weaker global demand forecasts, and risk-off positioning. While technical support near $69.50-$70.00 could provide temporary relief, the broader downtrend remains intact unless clear evidence of production cuts or demand recovery emerges.

FX implication:

Persistent weakness in oil prices will weigh on CAD and other energy-linked currencies, reinforcing bearish CAD/USD pressure. Recovery above $72.44 would be required to shift sentiment more positively.

Summary Table – Key Levels & Biases.

Instrument	Current Price	Key Support	Key Resistance	Bias
DXY	104.22	103.38	104.95	Bearish
XAU/USD	2899	2884	2929	Neutral-Bullish
USD/JPY	147.96	145.82	148.56	Bearish
GBP/USD	1.2865	1.2780	1.2900	Bullish
EUR/GBP	0.8382	0.8330	0.8410	Neutral-Bullish
S&P 500	5789	5753	5854	Bearish
Brent Crude	69.82	69.48	72.44	Bearish

Strategic outlook

• Stay long gold (XAU/USD) on risk hedging, with dips near $2885 offering potential entry points.

• Remain bearish USD/JPY, targeting 146.60 and lower on further equity weakness and rising safe-haven demand.

• Cautious on GBP/USD, with extended gains near 1.2875 at risk of short-term consolidation.

• Short DXY on further breakdown toward 103.38, particularly if services data softens.

• Watch EUR/GBP, with upside capped near 0.8410 unless ECB surprises hawkishly.