Trump Tariff on Eurozone Hammers Wall Street to New Low

● Wall Street remains under pressure as markets perceive heightened trade war risk ahead.

● Gold stokes demand amid high market uncertainty and reaches an all-time high.

● Eyes on today‘s UK GDP reading to gauge the Pound Sterling’s strength.

Market Summary

Wall Street witnessed a massive selloff in the last session as risk-off sentiment deepened following President Trumps latest tariff threats. The president-elect announced plans to impose a 200% tariff on eurozone alcoholic beverages while reaffirming his stance on reciprocal tariffs across global trade partners. Markets interpreted this as a potential escalation into a full-scale trade war, raising concerns over U.S. economic contraction.

Amid the equity downturn, the U.S. dollar edged higher as investors sought refuge in safer assets. However, the biggest winner was gold, which surged nearly 2% in its strongest single-day gain of 2025, coming within striking distance of the $3,000 mark. The move signals that investors are flocking to safe-haven assets amid heightened uncertainty.

In the forex market, all eyes are on the UK GDP data release today, with market expectations pointing to a weaker reading. Should the data disappoint, it could place further downside pressure on the Pound Sterling against its major peers.

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

Source: CME Fedwatch Tool

0 bps (95%) VS -25 bps (5%)

Market Movements

DOLLAR_INDX, H4

Dollar dropped following the US inflationary pressures continued to ease. The Producer Price Index (PPI) remained flat in February, rising 3.2% year-over-year, a notable slowdown from Januarys 3.7% increase. Falling energy prices (-1.2%) contributed to the weak inflation print. Additionally, the Consumer Price Index (CPI) showed the first slowdown in five months, reinforcing expectations that the Federal Reserve may adopt a more dovish stance. As a result, US Treasury yields declined, while the dollar extended its losses, further dampening market sentiment.

The Dollar Index is trading lower while currently testing the support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 32, suggesting the index might enter oversold territory.

Resistance level: 105.45, 106.50

Support level: 103.40, 101.70

XAU/USD, H4

Global risk sentiment remains fragile as US inflation slows and trade tensions escalate, fueling a flight to safe-haven assets. Gold surged to a record high after President Donald Trump threatened a 200% tariff on European alcohol imports, retaliating against the EU‘s proposed 50% tax on US whiskey. Trump criticized the EU’s actions as “hostile and abusive”, demanding an immediate tariff rollback.

Gold prices are trading higher while currently testing the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 70, suggesting the commodity might enter overbought territory.

Resistance level: 2990.00, 3035.00

Support level: 2935.00, 2885.00

EUR/USD，H1

The euro weakened as investors assessed Germany‘s proposed €500 billion stimulus package for defense and infrastructure. While the plan could support short-term growth, uncertainty lingers until details are finalized. Trump’s tariff threats against the EU also heightened fears of a broader US-EU trade conflict, adding to euro volatility.

EUR/USD is trading lower while currently testing the support level. However, due to lack of market catalysts from MACD and RSI near the midline, we could be expecting the pair to consolidate in a zone between the resistance level of 1.0880 and support level of 1.0825.

Resistance level: 1.0880, 1.0925

Support level: 1.0825, 1.0775

Crude Oil, H4

Oil prices edged higher in Asian trading on Friday after the U.S. imposed tighter sanctions on Iranian oil and shipping, though oversupply concerns limited gains. The Trump administration ramped up its pressure campaign by sanctioning Irans oil minister and cracking down on its "shadow fleet," which helps bypass existing restrictions. However, traders remained cautious as U.S.-led ceasefire talks between Russia and Ukraine could stabilize energy flows, potentially increasing oil exports from the region. Meanwhile, the IEA warned that global supply could exceed demand by 2025, adding to long-term oversupply worries.

Crude oil prices are trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 52, suggesting the commodity might extend its gains since the RSI stays above the midline.

Resistance level: 67.80, 69.05

Support level: 66.35, 65.30