Dollar Faces Headwind and Slides

• The dollar continues to face headwinds as Trump's administration continues to deliver tariff threats, with the latest target being BRICS.

• The market is more cautious as uncertainty arises surrounding Donald Trump's boost in gold prices.

• Eyes on today's U.S. Retail Sales that could alter the dollar's price action.

Market Summary

The U.S. dollar extended its decline, slipping to a three-week low despite Wednesday‘s hotter-than-expected CPI reading and stronger-than-anticipated Initial Jobless Claims data. Typically, such figures would bolster the greenback, but investor confidence remains shaky as concerns over the U.S. economy mount. The nation’s rising debt levels and the Trump administrations aggressive trade stance—particularly its latest tariff threats against BRICS member states—are fueling uncertainty.

The market's risk aversion has driven a shift toward safe-haven assets, with gold surging over 4.5% in February. Meanwhile, the Japanese yen has gained traction as an alternative haven, sending USD/JPY down more than 1% in the last session. If the yen continues to strengthen, the pair could remain under pressure. Investors will closely watch the U.S. Retail Sales report, which could influence the dollars trajectory.

In the crypto space, BTC and ETH are showing signs of stabilizing, with selling pressure easing. If risk appetite in the market improves, both cryptocurrencies could stage a bullish reversal in the near term.

Current rate hike bets on 19th March Fed interest rate decision:

Source: CME Fedwatch Tool

0 bps (98%) VS -25 bps (2%)

Market Movements

DOLLAR_INDX, H4

The Dollar Index fell significantly as Trumps aggressive tariff plans against major economies raised concerns over the US economic outlook. The US President ordered his administration to explore reciprocal tariffs on trading partners, heightening fears of an escalating global trade war. Adding to market anxiety, Trump issued a warning to BRICS nations, stating they could face 100% tariffs if they attempt to establish their own currency. The BRICS bloc—Brazil, Russia, India, China, and expanding members—has been pushing for de-dollarization, posing long-term risks to global dollar demand.

The Dollar Index is trading lower while currently testing the support level. MACD has illustrated increasing bearish momentum. However, RSI is at 31, suggesting the dollar might enter oversold territory.

Resistance level: 107.95, 108.90

Support level: 107.05, 106.45

XAU/USD, H4

Gold extended its gains, fueled by rising trade uncertainties and weaker dollar momentum. Trumps tariff escalation dampened risk appetite, boosting safe-haven demand for gold. Additionally, the depreciation of the dollar provided further support for dollar-denominated gold.

Gold prices are trading higher while currently testing the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 64, suggesting the commodity might experience technical correction since the RSI retreated from overbought territory.

Resistance level: 2935.00, 2950.00

Support level: 2915.00, 2880.00

USD/JPY，H4

USD/JPY declined as the dollar weakened sharply amid concerns over US economic stability and escalating trade tensions. Trump‘s tariff threats against BRICS nations fueled de-dollarization fears, further dampening dollar demand. Meanwhile, the Japanese yen remained strong, supported by stable inflation and the Bank of Japan’s hawkish monetary policy stance.

USD/JPY is trading lower while currently testing the support level. MACD has illustrated increasing bearish momentum, while RSI is at 47, suggesting the pair might extend its losses since the RSI stays below the midline.

Resistance level: 154.35, 155.35

Support level: 152.50, 151.30