Wall Street Jumps As Trade Tension Eases

*Wall Street jumped, and the Dollar strengthened after the President clarified no intention to fire the Feds chairman.

*Gold prices dipped sharply as the risk appetite improved in yesterday's market.

*Eyes on todays UK and Eurozone PMI readings.

Market Summary

U.S. equities rebounded sharply in the last session, with Wall Street recovering most of its previous losses, after President Trump made remarks aimed at soothing market anxieties. The U.S. dollar also gained traction, with the Dollar Index (DXY) climbing back above the 99.00 mark, reflecting renewed investor confidence.

Markets reacted positively after Trump clarified that he has no intention of firing Federal Reserve Chair Jerome Powell, a move that had previously spooked investors and raised concerns over the Feds independence. Trump further bolstered sentiment by stating he is committed to de-escalating tensions with China, signaling a potential shift from his confrontational trade stance.

This dovish pivot eased global risk aversion, leading to a sharp pullback in safe-haven assets. Gold prices plunged to near $3,300, while traditional haven currencies like the Japanese Yen and Swiss Franc weakened modestly, although they continue to trade at elevated levels amid lingering geopolitical and economic uncertainties.

Looking ahead, todays key PMI releases from the UK, eurozone, and the U.S. will be closely watched. These data points are expected to offer fresh insights into the health of the global economy and could act as short-term catalysts for respective currency pairs, especially if they surprise the upside or downside. Market volatility is likely to remain elevated as traders weigh data-driven signals against the ongoing political and policy backdrop.

Current rate hike bets on 7th May Fed interest rate decision:

0 bps (90.9%) VS -25 bps (9.1%)

Source: CME Fedwatch Tool

Market Movements

DOLLAR_INDX, H4

The Dollar Index rebounded slightly as investors regained confidence following a more positive tone from the US on both trade talks and Fed independence. Trump clarified he has “no intention of firing” Fed Chair Powell, easing concerns over political interference. Meanwhile, hopes for a partial tariff rollback in US-China negotiations and comments from Treasury Secretary Bessent pointing to a near-term de-escalation helped lift market sentiment and risk appetite.

The Dollar Index is trading higher while currently testing the resistance level. MACD has illustrated diminishing bearish momentum, while RSI is at 33, suggesting the index might extend its gains after breakout since the RSI rebounded sharply from oversold territory.

Resistance level: 100.15, 102.95

Support level: 97.15, 95.85

XAU/USD, H4

Gold prices pulled back from record highs as investors booked profits amid a broader shift toward risk-on sentiment. The precious metal had previously surged on fears surrounding trade tensions and political interference in monetary policy. However, with renewed optimism over trade talks and political clarity in the US, gold saw short-term selling pressure. Still, unresolved concerns — such as the Feds rate path and ongoing geopolitical issues — could reignite demand for gold.

Gold prices are trading lower while currently testing the upward trendline. MACD has illustrated increasing bearish momentum, while RSI is at 50, suggesting the commodity might extend its losses after breakout since the RSI retreated from overbought territory.

Resistance level: 3385.00, 3430.00

Support level: 3355.00, 3295.00

GBP/USD，H4

The GBP/USD pair dipped into a key fair-value gap (FVG) zone in the last session but found solid support before breaching through, indicating the pair is still trading within a bullish structure. This technical behavior underscores underlying demand for the Pound, even as the U.S. dollar regained some strength. The greenback rebounded following comments from President Trump, who clarified that he has no plans to remove Fed Chair Jerome Powell, a move that helped stabilize market sentiment and lift the dollar broadly. Looking ahead, traders will closely monitor the UKs PMI data, due later today. A strong reading could reinforce expectations of economic resilience and provide fresh bullish momentum for Sterling, potentially pushing GBP/USD back toward recent highs.

The pair incurred a minor technical retracement but remains trading within its bullish trajectory. The RSI has slid out from the overbought zone, while the MACD has a deadly cross on the above, suggesting that the bullish momentum is easing.

Resistance level: 1.3340, 1.3420

Support level: 1.3270, 1.3185