The bullish environment continues for global equities, led higher by the US stock market, especially AI technology, which saw the S&P 500 Index trade at a new all-time high late yesterday.
The US Dollar Index is having a change of heart and is making its way back towards levels seen last week before US President Donald Trump’s inauguration.
The GBP/USD exchange rate wavered as the focus shifted from this week’s swearing in of Donald Trump to next week’s policy statements by the Bank of England and the Federal Reserve.
Despite the heavy one-way positioning of the dollar, investors lack clarity on the timing of Trump’s tariff threats, preventing them from reducing dollar holdings.
As you can see, it's been very noisy during the trading session here on Tuesday as the 155 yen level continues to be supported right along with the 50-day EMA.
The US tariff threat was extended to China and the EU yesterday but after the North American market shrugged it off yesterday, for the most part, the market seemed to take it in stride.
Asian markets posted gains as optimism over increased AI investments under Trump's administration outweighed concerns about potential tariffs on Chinese imports.
EUR/CAD may retest monthly highs, followed by the two-month high at the 1.5060 level. The 14-day RSI maintains its position above the 50 mark, indicating a persistent bullish momentum.
Initially, the euro fell, during the trading session on Tuesday, but as we have seen a couple of times previously, there are plenty of buyers just above the ¥160 level to turn things around against the Japanese yen.
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