EUR/USD Faces Further Decline as Bearish Trend Strengthens
XAU/USD
Prediction: Short-term decline, correction in long-term uptrend
Gold prices have dropped nearly 2% this week, marking the first weekly decline after eight consecutive weeks of gains. The strengthening USD, along with expectations that the U.S. Federal Reserve (Fed) will maintain high interest rates for an extended period, is putting pressure on gold. Currently, prices are fluctuating around $2,880 after failing to sustain above the $2,930 level.
FUNDAMENTAL ANALYSIS
Monetary Policy & Fed Impact:
The Fed maintains a cautious monetary policy, with little likelihood of an early rate cut. The U.S. 10-year Treasury yield has risen to 4.303%, reducing gold’s appeal.
Core PCE (the Fed’s preferred inflation gauge) is expected to remain high at 2.7%, making it difficult for the Fed to ease monetary policy soon, adding further pressure on gold. Philadelphia Fed President Patrick Harker supports keeping interest rates in the 4.25%-4.50% range for the foreseeable future.
USD Strength & Gold Impact:
The DXY Index has risen 0.6% this week, making gold more expensive for investors holding other currencies.
Trump announced a 25% tariff on Canada and Mexico starting March 4, along with a new 10% tariff on Chinese goods. This has strengthened the USD as investors seek alternative safe-haven assets outside of gold.
Geopolitical Risks & Safe-Haven Demand:
U.S.-China trade tensions, along with potential retaliatory tariffs from Canada and Mexico, increase global economic uncertainty.
However, weaker physical demand from China, with gold imports via Hong Kong dropping to their lowest level in nearly three years, may limit gold’s upside momentum.
TECHNICAL ANALYSIS
Key Resistance Levels
● $2,900 - $2,906: Nearest resistance zone, aligning with the 89 EMA.
● $2,930: Strong resistance, previously an important support level now turned resistance.
● $2,956: Recent high—if breached, gold may resume its uptrend.
Key Support Levels
● $2,886: Current support—if held, a short-term rebound may occur.
● $2,850: Strong support, near the 200 EMA.
● $2,833: Major support—if broken, a deeper downtrend may be confirmed.
Technical Indicators:
RSI: 32.51, approaching oversold territory, suggesting a possible short-term rebound.
EMA 34 & EMA 89: Price has broken below both moving averages, confirming continued selling pressure.
Gold is under pressure due to a stronger USD, rising bond yields, and expectations that the Fed will not cut interest rates soon. However, with RSI near oversold levels, a technical rebound could occur if prices hold above $2,880. Traders should closely watch the upcoming U.S. PCE inflation data to adjust their strategies accordingly.
EUR/USD
Prediction: Bearish
EUR/USD continues its strong downtrend after breaking below the key 1.04294 support level (aligned with the 200 EMA). Currently, the pair is hovering around 1.03882—if this level fails to hold, further declines toward 1.03398 and lower could follow. The strengthening USD, driven by global trade tensions, is intensifying selling pressure on EUR/USD.
FUNDAMENTAL ANALYSIS
Monetary Policy & Fed Impact:
The USD benefits from safe-haven demand as global risks rise.
However, weak U.S. economic data keeps markets pricing in at least two Fed rate cuts in 2025, with the first expected in June or July.
The U.S. 10-year Treasury yield has fallen to 4.231%, limiting the USD's upside, but overall risk-off sentiment keeps the greenback strong.
The upcoming PCE inflation report (Fed’s preferred gauge) will be released later this week and could strongly influence monetary policy expectations and FX market volatility.
Trade Tensions & Market Impact:
Trump reaffirms a 25% tariff on Canadian and Mexican goods (effective March 4) and adds a 10% tariff on Chinese imports, heightening market concerns.
Wall Street tech stocks plunged, led by Nvidia’s disappointing earnings, adding to negative market sentiment.
European stocks fell 0.5%, particularly in the auto sector, which is highly sensitive to U.S. tariffs—this adds further pressure on the EUR.
Market Sentiment & Macroeconomic Developments:
Safe-haven currencies (JPY & CHF) are strengthening, driving capital away from risk assets. Oil prices surged over 2% after Trump revoked Chevron’s operating license in Venezuela, raising fresh supply concerns. Gold dipped slightly to $2,880/oz, as the USD remains firm.
TECHNICAL ANALYSIS
Key Resistance Levels
● 1.04294 – Immediate resistance, aligned with the 200 EMA. If price rebounds from support, this level will be crucial.
● 1.05039 – Strong resistance—breaking above this could signal a potential trend reversal.
● 1.05329 – Major high—must be cleared to confirm a long-term bullish trend.
Key Support Levels
● 1.03882 – Current support—if broken, further declines are likely.
● 1.03398 – Next major support—could trigger buying interest if tested.
● 1.02896 – Critical support—losing this level could extend the downtrend toward 1.02221 – 1.01766.
Technical Indicators:
EMA 34, EMA 89, EMA 200: Price has fallen below all three EMAs, confirming the bearish trend.
RSI: 32.15 – Near the oversold zone (30). If RSI drops below 30, further downside could follow. If RSI recovers, a short-term pullback may occur.
The overall bearish trend remains intact, favoring sell positions on price rallies toward key resistance levels. Investors should closely monitor the upcoming PCE inflation data and Trump’s trade policy developments for potential market shifts.
BTCUSD
Prediction: Decrease
Bitcoin continues its sharp decline, breaking below the $80,000 level and hitting its lowest price since November 11, 2024. Selling pressure remains dominant, with a clear downtrend on the technical charts. If BTC fails to hold above $80,000, further downside corrections toward lower support levels could follow.
FUNDAMENTAL ANALYSIS
Monetary Policy & Fed Impact:
Global economic uncertainties are affecting investor sentiment, with the Fed likely to maintain a cautious monetary stance.
The U.S. 10-year Treasury yield has dropped below 4%, but the USD remains strong, putting pressure on BTC.
The upcoming U.S. CPI and inflation data will play a key role in shaping Fed policy expectations and could impact BTC’s price action.
Financial & Crypto Market Impact:
Bitcoin has dropped over 5%, hitting a 3.5-month low, as concerns rise over Trump’s tariff policies and U.S. crypto regulations.
A $1.5 billion Ethereum hack has shaken investor confidence, contributing to a negative sentiment across the crypto market.
The Crypto Fear & Greed Index is currently at Extreme Fear (16 points), indicating weak market sentiment.
Some analysts suggest that BTC could be forming a short-term bottom, but confirmation is needed from price action.
On-Chain Data Analysis:
The MVRV Z-Score has dropped sharply but remains above 0, indicating that the market is not yet in severe oversold territory.
BTC has not yet broken below the 365-day moving average of MVRV, suggesting that the correction phase may take longer before a potential recovery. Probability of BTC falling below $77,000 is low, but if stock markets continue to decline, BTC could test the $73,000 – $75,000 range.
TECHNICAL ANALYSIS
Key Resistance Levels
● $83,800 – Nearest resistance level.
● $85,000 – A breakout above this level could lead to a retest of $86,500.
● $88,500 – Major weekly resistance—a breakout here would confirm a trend reversal.
Key Support Levels
● $80,000 – Immediate support. If breached, a stronger sell-off may follow.
● $78,500 – Next key support level.
● $73,500 – $75,000 – Major support zone, where buying interest could emerge.
Technical Indicators:
RSI: 23.40 – BTC is deep in oversold territory, indicating a potential short-term rebound.
EMA 34 & EMA 89: Both moving averages are sloping downward, confirming the bearish trend.
BTC/USD remains in a strong downtrend, with $80,000 acting as a crucial support level. If this level holds, a short-term technical rebound is possible. However, if BTC breaks below $80,000, further declines toward $75,000 – $73,500 are likely in the short term. Traders should closely monitor U.S. inflation data and macroeconomic developments to adjust their strategies accordingly.
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