Euro Gain on Merz Win 

Market Summary

The U.S. dollar extended its decline, hitting a new 2025 low, as markets digested weaker-than-expected U.S. economic data last week despite the Fed’s hawkish tone in the latest FOMC meeting minutes. The fading confidence in the U.S. economy weighed not only on the greenback but also on Wall Street, which slumped further amid renewed tariff threats from the Trump administration, casting a shadow over global markets.

The Dollar Index (DXY) weakened, pressured by gains in G7 currencies, particularly the euro and the Japanese yen. The euro surged after Germany’s new conservative leader, Friedrich Merz, secured an election victory, reducing political uncertainty in the Eurozone’s largest economy. Meanwhile, the Japanese yen strengthened, supported by a continued rise in Japan’s 10-year bond yield, as traders positioned for a potentially more hawkish stance from the Bank of Japan (BoJ).

Looking ahead, markets are laser-focused on Nvidia’s earnings report due Wednesday, which could provide critical insights into the growth trajectory of the AI sector and its impact on Nasdaq and broader Wall Street sentiment.

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

Source: CME Fedwatch Tool

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

Market Overview

Economic Calendar

(MT4 System Time)

Source: MQL5 

Market Movements

DOLLAR_INDX, H4

The U.S. dollar remains under pressure as investors weigh economic uncertainty and potential new tariffs from former President Donald Trump. Mixed economic data has added to market caution, with a sharp decline in Services PMI (49.7 vs. 53.0 expected) and weaker existing home sales (4.08M vs. 4.13M expected) underscoring economic concerns. However, the dollar found some support from a stronger-than-expected Manufacturing PMI (51.6 vs. 51.3 forecasted).

The Dollar Index is trading lower following the prior breakout below the previous support level. MACD has illustrated increasing bearish momentum, while RSI is at 30, suggesting the index might extend its losses since the RSI stays below the midline. 

Resistance level: 106.55, 107.45

Support level: 105.65, 103.70

XAU/USD, H4

Gold remains range-bound as investors adopt a cautious stance amid mixed market signals. On the bullish side, Trump’s tariff uncertainties have dampened risk appetite, leading to sharp declines in high-risk assets like the Dow Jones and Nasdaq. Conversely, the ongoing Russia-Ukraine ceasefire discussions present a bearish case, as reduced geopolitical tensions could weaken demand for safe-haven assets. Traders should closely monitor geopolitical developments and U.S. economic data for clearer directional cues.

Gold prices are trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 56, suggesting the commodity might extend its gains since the RSI stays above the midline. 

Resistance level:  2940.00, 2960.00

Support level: 2915.00, 2880.00

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GBP/USD，H4

The GBP/USD pair surged to its highest level in 2025, driven by a weakening U.S. dollar, which depreciated to its lowest level this year. The greenback slid sharply on Friday as markets digested a string of disappointing U.S. economic data, reinforcing concerns over the economic outlook despite the Fed’s hawkish narrative in the latest FOMC meeting minutes. In contrast, UK retail sales data released on Friday exceeded market expectations, providing further upward momentum for the Pound Sterling.

GBP/USD reached a new high in the last session, suggesting a bullish bias for the pair. The RSI remains close to the overbought zone, while the MACD hovers above the zero line, suggesting that the bullish momentum remains sufficient for the pair to surge to a new high. 

Resistance level: 1.2730, 1.2850

Support level: 1.2606, 1.2515

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EUR/USD，H4

The euro surged as political uncertainty in Germany eased following Frederich Merz’s conservative victory and coalition government plans. The underperformance of the far-right AfD further reassured markets, reducing immediate political risks. Despite earlier concerns, the euro has gained over 1% in February. However, longer-term risks remain if economic or immigration policies fail to stabilize growth. Investors will closely monitor ECB policy signals and economic data for further direction.

EUR/USD is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 63, suggesting the pair might extend its gains since the RSI stays above the midline.

Resistance level: 1.0525, 1.0595

Support level: 1.0445, 1.0385

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Nasdaq (US100)，H1

The U.S. equity market, including the Nasdaq, came under pressure as a wave of risk-off sentiment swept through financial markets. Recent U.S. economic data fell short of expectations, dampening investor confidence in the strength of the economy. Adding to market jitters, the Trump administration’s renewed tariff threats have further weighed on sentiment, fueling uncertainty across global markets. Looking ahead, all eyes are on Wednesday’s Nvidia earnings report, which could be a key catalyst for Nasdaq’s next move. 

The index has slid by more than 2% in the last session and has broken below form the previous slideways range, suggesting a bearish bias for the index. The RSI has dipped into the oversold zone while the MACD has broken below from the zero line, suggesting that a bearish momentum is forming. 

Resistance level: 21750.00, 22000.00

Support level: 21500.00, 21230.00

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USD/JPY, H4: 

The USD/JPY pair has slid to its lowest levels since December, with traders closely watching the 149.20 support level for a potential breakdown. A decisive move below this key level could signal further downside momentum for the pair. The Japanese Yen continues to strengthen across the board, buoyed by surging long-term JGB yields as speculation grows over a more hawkish stance from the Bank of Japan (BoJ). Market participants are increasingly pricing in the possibility of a rate hike in March, reinforcing bullish momentum for the Yen.

The USD/JPY pair has gotten to new low in 2025, suggesting a bearish bias amid strengthening Japanese Yen. The RSI remains close to the oversold zone while the MACD is edging lower, suggesting that the bearish momentum is gaining. 

Resistance level: 151.30, 152.75

Support level: 147.50, 145.45

NZD/USD, H4

The New Zealand dollar (NZD) rebounded sharply after today’s better-than-expected Retail Sales data, providing a much-needed boost following last week’s dovish Reserve Bank of New Zealand (RBNZ) remarks. While the RBNZ signaled further rate cuts ahead, the latest upbeat economic indicators have helped the Kiwi shake off its previous bearish momentum. Adding to the support, renewed optimism surrounding China’s economic outlook, fueled by excitement over DeepSeek AI’s advancements, has lifted sentiment for the China-proxy Kiwi. 

The pair has been trading in a higher-high price pattern for the entire February, suggesting a bullish bias. The RSI has been supported at above the 50 level, while the MACD remains at above the zero line, suggesting that the pair remains trading with bullish momentum. 

Resistance level: 0.5800, 0.5856

Support level: 0.5735, 0.5665

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Crude Oil, H4

Oil prices declined as easing geopolitical risks dampened the risk premium. A stable Gaza ceasefire and ongoing Ukraine peace discussions added to market calm, oil prices dip on diminishing fears upon supply disruption. While a Ukrainian drone attack on Russia’s Caspian Pipeline Consortium briefly supported prices, record-high oil flows from Kazakhstan and rising U.S. crude stockpiles due to refinery maintenance offset supply concerns. Market uncertainty persists amid speculation that OPEC+ may delay production cuts.

Crude oil prices are trading lower while currently testing the support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 27, suggesting the commodity might enter oversold territory. 

Resistance level: 70.95, 71.95

Support level: 70.25, 69.55