Market Analysis

Market Overview

United Kingdom

The British pound (GBP) surged to a four-month high against the U.S. dollar, supported by positive risk sentiment in the market. The euro also climbed 4% this week, driven by Germany’s €500 billion investment plan, while the U.S. dollar weakened due to concerns over U.S. trade policy. With GBP/USD rebounding near 1.29236, investors are closely monitoring a potential breakthrough to 1.3000.

Market sentiment was boosted by the White House’s decision to postpone auto import tariffs from Canada and Mexico for a month. Meanwhile, the European Central Bank (ECB) is expected to cut interest rates, though the pace of easing remains uncertain. China pledged fiscal stimulus, supporting the Australian dollar (AUD) and the Chinese yuan (CNY). Capital flows are shifting away from the U.S. dollar, providing short-term momentum for GBP and EUR.

Europe

European stocks rose as the U.S. temporarily delayed tariffs on the Canadian and Mexican auto industries, while the euro reached a four-month high on expectations of major spending from Germany. German government bonds saw a sharp sell-off as Berlin planned to ease fiscal rules and establish a €500 billion infrastructure fund. Investors are awaiting the 

European Central Bank (ECB) decision, which is expected to cut interest rates to counter economic uncertainties.The U.S. dollar weakened as the Trump administration showed flexibility in trade policy, while the British pound and Australian dollar benefited from positive risk sentiment. However, experts warned of potential risks as Trump could still escalate tariffs against the EU. Markets are closely watching the ECB to assess whether the euro's upward trend is sustainable.

BTCUSD

Prediction: Recovery but Facing Strong Resistance

Bitcoin is currently in a recovery phase after a sharp drop to the $81,434 zone. At present, BTC has climbed back above $90,000 and is testing a key resistance area between $92,000 - $93,500. However, failure to break through this level may result in a correction toward lower support levels.

FUNDAMENTAL ANALYSIS

Monetary Policy and Fed Impact

The U.S. financial markets are still adjusting to expectations regarding the Federal Reserve’s monetary policy. Currently, investors anticipate that the Fed will keep interest rates stable in the
short term. Declining U.S. government bond yields have weakened the USD, indirectly supporting Bitcoin’s price.

Market Sentiment & Macroeconomic Factors

Trump Administration & Bitcoin Reserves: Speculation about President Trump potentially establishing a crypto reserve fund, primarily in Bitcoin, has positively influenced market sentiment. However, uncertainty about whether this plan will materialize remains a risk factor.

Tax & Trade Policies: Trump’s decision to delay auto part tariffs on Canada and Mexico has provided some relief to Bitcoin after its drop below $83,000.

Bitcoin Mining Industry: The U.S. has started releasing thousands of Bitcoin mining machines previously held at customs, potentially strengthening the mining industry. This could impact future BTC supply dynamics.

Geopolitical Risks

U.S. Sanctions on Darknet-Related Bitcoin Addresses: Recently, the U.S. imposed sanctions on Bitcoin wallets linked to the darknet marketplace Nemesis, raising concerns about stricter crypto
regulations. If such measures expand, they could negatively impact market liquidity.

U.S.-China Relations: Trump’s 10% tariff on Chinese imports could affect the crypto market, especially Bitcoin mining, as 98% of mining chips originate from China.

TECHNICAL ANALYSIS

Key Resistance Levels

● $92,095 - $93,500: Strong resistance zone, aligning with the 200 EMA.

● $95,000: A critical level to watch. If BTC closes above this, it could extend gains toward $99,766 - $100,000.

Key Support Levels

● $88,756: Nearest support. A drop below this may lead BTC to $86,200 - $85,000.

● $83,354 - $82,000: Strong support zone in case of a deeper correction.

● $80,000: A key psychological level. A breakdown below this could signal a return to a long-term downtrend.

Technical Indicators:

EMA 34, 89, 200: BTC is currently trading below the 200 EMA (thick green line), indicating continued selling pressure. The 34 EMA & 89 EMA are acting as dynamic support.

RSI: Currently at 60.63, suggesting bullish momentum, but not excessively strong. If RSI surpasses 70, BTC might become overbought and face a short-term correction.

Trading Volume: Volume is gradually increasing as BTC recovers, reflecting investor interest. If volume declines in the coming sessions, BTC may struggle to break through the $92,000 - $93,500
resistance zone.

Bitcoin is recovering but facing strong resistance at $92,000 - $93,500. A successful breakout could push BTC towards $95,000 - $100,000, while failure may lead to support retests at $88,756 - $85,000. Keep an eye on Fed policy, geopolitical risks, and market sentiment as they continue to influence Bitcoin’s price movement.

XAUUSD

Prediction: Increase

Gold prices remained stable on Thursday morning as investors awaited the U.S. Non-Farm Payrolls (NFP) report to gauge the Federal Reserve’s interest rate outlook. Meanwhile, ongoing U.S. trade tensions continue to impact market sentiment.

FUNDAMENTAL ANALYSIS

1. Market Conditions & Key Drivers

Gold prices have been relatively stable today as investors await the U.S. NFP report on Friday for further clues on the Federal Reserve’s next moves.

Spot gold is currently trading around $2,917.90/oz, while U.S. gold futures edged 0.1% higher to $2,927.40/oz.

Trade tensions remain in focus after the U.S. imposed a 25% tariff on imports from Mexico and Canada but later granted a one-month exemption for the automobile sector, stabilizing market sentiment and boosting stocks.

Key U.S. Economic Data

February U.S. Services PMI unexpectedly rose, alongside increasing raw material costs, heightening inflation concerns.

ADP employment report showed private-sector job growth of only 77,000, well below the expected 140,000, signaling a potential slowdown in the labor market.

U.S. Dollar Index (DXY) declined to 104.11, supporting gold prices.

10-year U.S. Treasury yield increased to 4.269%, reflecting market expectations of the Fed’s rate policy.

2. Market Sentiment & Gold’s Safe-Haven Appeal

Gold continues to act as a safe-haven asset, especially amid rising trade tensions. The market is awaiting Friday’s NFP report, which could determine whether the Fed will cut interest rates sooner than expected.

If labor data is weaker than expected, the Fed may be forced to ease policy, supporting gold prices.

Gold recently hit an all-time high of $2,956.15 on February 24, driven by investor demand amid economic uncertainty and U.S. tariff policies.

TECHNICAL ANALYSIS

Key Resistance Levels

● $2,929 - $2,930: Short-term resistance; a breakout above this could push prices back to the $2,956 - $2,960 range.

● $2,956 - $2,960: All-time high resistance; a strong breakout could extend gains to higher levels.

Key Support Levels

● $2,906 - $2,908: Nearest support, aligned with EMA 34. A break below this could lead to deeper corrections.

● $2,891: Medium-term support; a breakdown could trigger a drop toward the 200 EMA.

● $2,850 - $2,853: Major support zone near 200 EMA; losing this level could signal a potential trend reversal.

Technical Indicators:

Trend: Bullish, but facing key resistance and showing slight signs of consolidation.

EMA Levels: EMA 34 ($2,904) and EMA 89 ($2,897) are providing support for the uptrend. EMA 200 ($2,853) remains a key long-term support; breaking below this could shift the trend to bearish.

RSI (58.97): Neutral zone, indicating no overbought or oversold conditions.

EUR/USD

Prediction: Increase

EUR/USD is showing strong recovery after a prolonged downtrend. The pair has broken through key resistance levels and is currently trading around 1.08145, approaching the major resistance zone at 1.08747 - 1.09302. The short-term trend is turning bullish, but price action around key resistance levels will determine whether the uptrend continues.

FUNDAMENTAL ANALYSIS

1. Financial Market Impact

Global stock market rally: The U.S. temporarily lifting auto tariffs on Canada and Mexico has improved risk sentiment, boosting global equities. This has weakened demand for the USD, supporting EUR/USD’s upward movement.

German bond yields surge: Germany’s €500 billion infrastructure spending plan and financial rule relaxation have driven higher bond yields, attracting capital inflows into the Eurozone and strengthening the EUR.

USD weakness: The U.S. Dollar Index (DXY) has dropped to 104.11, its lowest level since November 2024, providing additional support for EUR/USD.

2. ECB Monetary Policy

The ECB is expected to cut interest rates during today’s (March 6, 2025) meeting: If the ECB is less dovish than expected, the EUR could extend its rally.

However, if the ECB signals aggressive rate cuts, the EUR may face downward pressure. Germany’s fiscal spending plan: The €500 billion investment initiative could help stabilize the Eurozone economy, reducing the need for deeper ECB rate cuts, thereby supporting the EUR.

3. Global Trade Impact

U.S. Tariff Risks:

● Trump remains aggressive on trade policies toward the EU, increasing the risk of future tariffs, which could pressure the EUR in the long run.

● MUFG warns that the current EUR rally may not last if Trump escalates trade tensions with Europe.

China’s Economic Growth:

● China has pledged further economic stimulus, supporting global growth.

● A stronger global economy could indirectly support EUR/USD if risk appetite remains stable.

TECHNICAL ANALYSIS

Key Resistance Levels

● 1.08145 – Immediate resistance; a breakout could open the path to 1.08747 and potentially 1.09302.

● 1.09302 – Major resistance; strong selling pressure may emerge here.

Key Support Levels

● 1.07207 – Nearest support level.

● 1.06281 – Critical support, aligned with the 200 EMA; if the price retraces here, it could form a base for a long-term uptrend.

Technical Indicators:

EMA 200 Breakout: EUR/USD has broken above the 200 EMA at 1.07207, confirming a trend reversal to bullish.

RSI at 71.65: Currently in the overbought zone, signaling a possible short-term correction.

 

 

 

 

 

 

 

 

 

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