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The risk-off sentiment that triggered the biggest US stock market selloff in months has spilled over into Asian markets, leading to broad declines across the region. The currency markets reflect this shift too, with traditional safe havens such as Japanese Yen and Swiss franc leading gains in Asia, while risk-sensitive currencies like the Australian and New Zealand Dollars face pressure.

Unlike previous bouts of risk aversion, Dollar is not benefiting from the current flight to safety. This time, the core of the problem originates from the US economy itself, where recession worries are intensifying. Rather than flocking to the greenback, investors appear to be diversifying into other safe havens or moving to the sidelines until the dust settles.

The uncertainty surrounding US trade policies has left businesses and consumers hesitant, potentially dragging economic growth lower. In response to the changing economic outlook, market participants are increasingly convinced that Fed will resume policy easing within the first half of the year. The only question is whether the next rate cut will arrive in May or June.

Another driver of Dollar weakness is the extending decline in yields since mid January. Technically, there is prospect for 10-year yield to draw support from 4.000 psychological level, which is slightly below 61.8% retracement of 3.603 to 4.809 at 4.063, to form a near term bottom. However, there is little prospect for 10-year yield to rebound strongly through 55 D EMA (now at 4.412). But at least, sideway movement in 10-year yield could help lift the pressure on Dollar.

Overall for the week so far, Yen is the best performer, followed by Euro, and then Swiss Franc. Aussie is the worst, followed by Loonie and then Kiwi. Dollar and Sterling are positioning in the middle.

In Asia, at the time of writing, Nikkei is down -1.02%. Hong Kong HSI is down -1.02%. China Shanghai SSE is down -0.50%. Singapore Strait Times is down -2.02%. Japan 10-year JGB yield is down -0.063 at 1.509. Overnight, DOW fell -2.08%. S&P 500 fell -2.70%. NASDAQ fell -4.00%. 10-year yield fell -0.104 to 4.213.

US stock market correction deepens as recession fears take hold

The US stock market suffered its most significant setback in months, with the S&P 500 dropping -2.7%, its biggest one-day decline since December 18. NASDAQ also lost -4.0%, marking its worst single-day percentage loss since September 2022. Analysts widely point to mounting recession worries as the primary catalyst behind the selloff.

Initial concerns emerged over the past month following a series of weaker economic data points, believed by some to be early reactions to an increasingly contentious tariff policy. These worries intensified after recent remarks from the White House suggested a bumpy economic outlook ahead.

In an interview aired on Sunday, US President Donald Trump fueled apprehensions further by describing the economy as going through “a period of transition.” When pressed about an impending recession, he avoided a direct prediction but acknowledged potential “disruption.” His remarks—“Look, we’re going to have disruption, but we’re OK with that”—did little to reassure investors already on edge about growth prospects.

Adding further weight to recession fears, historical bond market indicators have been flashing warning signs. The 10-year to 2-year US yield curve inverted in mid-2022—a classic recession signal—and only turned positive again in September 2024. Historically, a U.S. recession tends to follow within months after the yield curve normalizes (i.e., turned positive again). If this trend holds true, the US economy could be inching closer to a downturn.

However, another view posits that tariffs are a distraction and that the real driver behind the US selloff is the recent surge in Japanese government bond yields, which have hit a 16-year high. As the carry trade unwinds—where investors borrow in low-yield currencies, often involving Japanese Yen, to fund investments in higher-yield or high-growth assets—capital is flowing out of big tech names, contributing to the NASDAQ’s outsized losses.

Technically, NASDAQ's strong break of 55 W EMA (now at 17864.01) suggests that it's already in correction to the up trend from 10088.82 (2022 low). Deeper fall should be seen to 38.2% retracement of 10088.82 to 20204.58 at 16340.36. Reaction from there will decide whether it's merely in a medium consolidations phase or in an out-right bearish trend reversal.

As for DOW, immediate focus is now on 41844.89 support. Firm break there will complete a double top reversal pattern (45073.63, 45054.36). That should set up deeper fall to 38.2% retracement of 32327.20 to 45073.63 at 40204.49 at least, even it's just a correction to the rise from 32327.20.

Australia Westpac consumer sentiment jumps to 95.9, soft landing achieved

Australian consumer sentiment saw a strong rebound in March, with Westpac Consumer Sentiment Index jumping 4.0% mom to 95.9, the highest level in three years and not far from neutral 100 mark.

Westpac attributed the improvement to slowing inflation and February’s RBA interest rate cut which have lifted confidence across households. positive views on job security suggest that "soft landing has been achieved". Nevertheless, "unsettling overseas news" continues to weigh on the broader economic outlook.

Looking ahead to RBA's upcoming meeting on March 31-April 1, Westpac expects the central bank to keep the cash rate unchanged. RBA was clear that the 25bps cut in February "did not mean further reductions could be expected at subsequent meetings."

Westpac added, "further slowing in inflation will give the RBA sufficient confidence to deliver more rate cuts this year with the next move coming at the May meeting".

Australia’s NAB business confidence slips back into negative as cost pressures persist

Australia’s NAB Business Confidence fell from 5 to -1 in February, erasing last month’s gain and returning to below-average levels. While business conditions improved slightly from 3 to 4, the decline in confidence suggests that businesses remain cautious despite RBA’s recent rate cut and positive Q4 GDP data.

NAB Chief Economist Alan Oster noted that the lift in sentiment seen in January was not sustained, signaling ongoing uncertainty in the business environment. Persistent cost pressures and subdued profitability appear to be key factors weighing on sentiment, keeping confidence below long-term norms.

Within business conditions, trading conditions ticked up from 7 to 8, and profitability conditions rose slightly from -2 to -1, though still remaining in negative territory. Employment conditions, however, weakened from 5 to 4.

Cost pressures remain a concern, with purchase cost growth accelerating from 1.1% to 1.5% in quarterly equivalent terms. On the positive side, labor cost growth eased from 1.7% to 1.5%, indicating that wage price pressures are gradually cooling. Meanwhile, final product price growth slowed from 0.8% to 0.5%, though retail price inflation held steady at 1.0%.

EUR/AUD Daily Outlook

Daily Pivots: (S1) 1.7149; (P) 1.7213; (R1) 1.7320; More...

EUR/AUD's rally resumed and brief consolidations and intraday is back on the upside. Rise from 1.6335 should now target 161.8% projection of 1.5963 to 1.6800 from 1.6355 at 1.7709 next. On the downside, below 1.7102 minor support will turn intraday bias neutral again and bring consolidations, before staging another rally.

In the bigger picture, up trend from 1.4281 (2022 low) is resuming. Sustained trading above 1.7180 key resistance will pave the way to 61.8% projection of 1.4281 to 1.7062 from 1.5963 at 1.7682, which is also close to 61.8% retracement of 1.9799 (2020 high) to 1.4281 at 1.7691. For now, this will remain the favored case as long as 1.6355 support holds, even in case of deep pullback.

Short Term Elliott Wave View in Silver (XAGUSD) suggests cycle from 12.19.2024 low is in progress as 5 waves. Up from 12.19.2024 low, wave (1) ended at 33.39. Wave (2) pullback unfolded as a zigzag Elliott Wave structure. Down from wave (1) at 33.39, wave A ended at 31.88 and wave B ended at 33.2 as the 1 hour chart below shows. Wave C lower subdivided into 5 waves impulse. Down from wave B, wave ((i)) ended at 32.34 and wave ((ii)) ended at 32.73. Wave ((iii)) lower ended at 31.26 and wave ((iv)) ended at 31.95. Final leg wave ((v)) ended at 30.8 which completed wave C of (2).

The metal has turned higher in wave (3). Up from wave (2), wave ((i)) ended at 31.4 and wave ((ii)) ended at 31.1. Wave ((iii)) higher ended at 32.72 and pullback in wave ((iv)) ended at 32.24. Final leg wave ((v)) ended at 32.76 which completed wave 1 in higher degree. Pullback in wave 2 is in progress to correct cycle from 2.28.2025 low before it resumes higher. Down from wave 1, wave ((a)) ended at 32.08 and wave ((b)) ended at 32.66. Expect wave ((c)) of 2 to end above 30.8 invalidation level for the next leg higher. As far as pivot at 30.8 low stays intact, expect pullback to find support in 3, 7, 11 swing for more upside.

Silver (XAGUSD) 60 Minutes Elliott Wave Chart

XAGUSD Video

https://www.youtube.com/watch?v=CSCJHhOyJtE

Key Highlights

• USD/CHF extended losses and traded below the 0.8860 support.
• A key bearish trend line is forming with resistance at 0.8825 on the 4-hour chart.
• EUR/USD climbed above the 1.0800 resistance zone.
• GBP/USD might soon aim for a move toward 1.3000.

USD/CHF Technical Analysis

The US Dollar remained in a bearish zone below 0.8920 against the Swiss Franc. USD/CHF extended losses below 0.8850 to move further in a bearish zone.

Looking at the 4-hour chart, the pair settled below the 0.8825 level, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). The pair even dived below the 0.8800 support zone.

It tested the 0.8760 zone. On the downside, immediate support sits near the 0.8765 level. The next key support sits near the 0.8720 level. Any more losses could send the pair toward the 0.8650 level.

On the upside, the pair seems to be facing hurdles near the 0.8820 level. There is also a key bearish trend line forming with resistance at 0.8825 on the same chart. The next major resistance is near the 0.8865 level.

The main resistance is now forming near the 0.8900 zone. A close above the 0.8900 level could set the tone for another increase. In the stated case, the pair could even clear the 0.8940 resistance.

Looking at GBP/USD, the pair also started a decent increase and the pair could now aim for a move toward the 1.3000 resistance.

Upcoming Economic Events:

• US NFIB Business Optimism Index for Feb 2025 – Forecast 101.0, versus 102.8 previous.

The US stock market suffered its most significant setback in months, with the S&P 500 dropping -2.7%, its biggest one-day decline since December 18. NASDAQ also lost -4.0%, marking its worst single-day percentage loss since September 2022. Analysts widely point to mounting recession worries as the primary catalyst behind the selloff.

Initial concerns emerged over the past month following a series of weaker economic data points, believed by some to be early reactions to an increasingly contentious tariff policy. These worries intensified after recent remarks from the White House suggested a bumpy economic outlook ahead.

In an interview aired on Sunday, US President Donald Trump fueled apprehensions further by describing the economy as going through “a period of transition.” When pressed about an impending recession, he avoided a direct prediction but acknowledged potential “disruption.”
His remarks—“Look, we’re going to have disruption, but we’re OK with that”—did little to reassure investors already on edge about growth prospects.

Adding further weight to recession fears, historical bond market indicators have been flashing warning signs. The 10-year to 2-year US yield curve inverted in mid-2022—a classic recession signal—and only turned positive again in September 2024. Historically, a U.S. recession tends to follow within months after the yield curve normalizes (i.e., turned positive again). If this trend holds true, the US economy could be inching closer to a downturn.

However, another view posits that tariffs are a distraction and that the real driver behind the US selloff is the recent surge in Japanese government bond yields, which have hit a 16-year high. As the carry trade unwinds—where investors borrow in low-yield currencies, often involving Japanese Yen, to fund investments in higher-yield or high-growth assets—capital is flowing out of big tech names, contributing to the NASDAQ’s outsized losses.

Technically, NASDAQ's strong break of 55 W EMA (now at 17864.01) suggests that it's already in correction to the up trend from 10088.82 (2022 low). Deeper fall should be seen to 38.2% retracement of 10088.82 to 20204.58 at 16340.36. Reaction from there will decide whether it's merely in a medium consolidations phase or in an out-right bearish trend reversal.

As for DOW, immediate focus is now on 41844.89 support. Firm break there will complete a double top reversal pattern (45073.63, 45054.36). That should set up deeper fall to 38.2% retracement of 32327.20 to 45073.63 at 40204.49 at least, even it's just a correction to the rise from 32327.20.

Australia’s NAB Business Confidence fell from 5 to -1 in February, erasing last month’s gain and returning to below-average levels. While business conditions improved slightly from 3 to 4, the decline in confidence suggests that businesses remain cautious despite RBA’s recent rate cut and positive Q4 GDP data.

NAB Chief Economist Alan Oster noted that the lift in sentiment seen in January was not sustained, signaling ongoing uncertainty in the business environment. Persistent cost pressures and subdued profitability appear to be key factors weighing on sentiment, keeping confidence below long-term norms.

Within business conditions, trading conditions ticked up from 7 to 8, and profitability conditions rose slightly from -2 to -1, though still remaining in negative territory. Employment conditions, however, weakened from 5 to 4.

Cost pressures remain a concern, with purchase cost growth accelerating from 1.1% to 1.5% in quarterly equivalent terms. On the positive side, labor cost growth eased from 1.7% to 1.5%, indicating that wage price pressures are gradually cooling. Meanwhile, final product price growth slowed from 0.8% to 0.5%, though retail price inflation held steady at 1.0%.

Full Australia NAB Monthly Business Survey here.

Australian consumer sentiment saw a strong rebound in March, with Westpac Consumer Sentiment Index jumping 4.0% mom to 95.9, the highest level in three years and not far from neutral 100 mark.

Westpac attributed the improvement to slowing inflation and February’s RBA interest rate cut which have lifted confidence across households. positive views on job security suggest that "soft landing has been achieved". Nevertheless, "unsettling overseas news" continues to weigh on the broader economic outlook.

Looking ahead to RBA's upcoming meeting on March 31-April 1, Westpac expects the central bank to keep the cash rate unchanged. RBA was clear that the 25bps cut in February "did not mean further reductions could be expected at subsequent meetings."

Westpac added, "further slowing in inflation will give the RBA sufficient confidence to deliver more rate cuts this year with the next move coming at the May meeting".

Full Australia Westpac Consumer Sentiment release here.

• Gold prices are under pressure at the start of the week due to market caution surrounding rising tariffs, recessionary fears, and geopolitical uncertainty.
• US CPI data is expected later in the week, with potential for higher inflation to further impact market sentiment.
• Technical analysis indicates mixed signals for gold (XAU/USD), with a current downtrend on the H4.

Gold is feeling a bit of pressure at the start of the week as markets are cautious of what lies ahead. Rising tariff developments, recessionary fears and an uncertain geopolitical outlook continue to linger and cloud data releases.

Tariffs are Affecting Market Sentiment

If last week showed us anything, it is that market participants are losing patience on US President Donald Trump’s seesaw on tariffs. U.S. President Donald Trump signed an order on Thursday to exclude goods from Canada and Mexico under the USMCA trade deal, just two days after applying them.

However, US Commerce Secretary Howard Lutnick said on Sunday that the 25% tariffs on steel and aluminum, planned for Wednesday, are unlikely to be delayed. This uncertainty around Trump’s tariff policies may increase demand for gold as a safe investment, and thus keeping prices supported.

Weaker US data has also sparked potential recessionary fears which has been reflected in the struggles by the US Stock Market of late. This should in theory prove supportive for the precious metal.

The slide in Gold however, could be down to profit taking to start the week as well ahead of US inflation data. The fact that Gold prices failed to find acceptance above the 2924 resistance handle last week may also be playing on the mind of market participants and thus adding downward pressure on Gold prices.

US CPI Data Ahead

There has been a significant uptick in inflation expectations over the next 12 months in the US. Signs of stickiness in US inflation data were evident in the previous print as well which makes this week’s release even more important.

Market sentiment is already fragile to say the least with another uptick in inflation likely to weigh further on sentiment.

The question will be the effect on Gold prices. Recent data releases have seen Gold prices react in ways market participants may not have expected. There is a real possibility that this continues with an elevated inflation print likely supporting Gold prices as it may lead to additional uncertainty and thus risk aversion.

Technical Analysis – Gold (XAU/USD)

From a technical analysis standpoint, this analysis is a follow up from the technicals last week. Read: Gold (XAU/USD) Retreats From Fresh All-Time Highs, Bulls Remain in Control

Golds price action is throwing up mixed signals at present with last week’s bounce closing above an area of resistance, signaling a potential shift towards bullish momentum once more.

Gold failed to find acceptance however above the 2924 resistance handle giving rise to potential profit taking ahead of the CPI release..

Gold (XAU/USD) Daily Chart, March 10, 2025

Source: TradingView (click to enlarge)

Dropping down to the H4 chart and you can see above, Gold is now firmly in a downtrend with bears in control.

The precious metal has made a fresh low but is trading at a key area of support at 2881 with a short-term bounce a possibility.

Immediate resistance rests at 2900 before 2913 and the all important 2924 comes into focus.

Support on the other hand is provided by the 2870 handle before the 2850 and 2830 handles become areas of concern.

Gold (XAU/USD) Four-Hour H4 Chart, March 10, 2025

Source: TradingView (click to enlarge)

Support

• 2870
• 2850
• 2830

Resistance

• 2900
• 2913
• 2924

GBPCAD: ⬆️ Buy

• GBPCAD rising inside minor impulse wave 3
• Likely to reach resistance level 1.8800

GBPCAD currency pair continues to rise inside the minor impulse wave 3, which belongs to the sharp intermediate impulse wave (3) from last year.

The price earlier broke through the key resistance level 1.8230 (a former multi-month high from December) –which accelerated the active impulse waves iii, 3 and (3).

Given the clear weekly uptrend, GBPCAD currency pair can be expected to rise to the next resistance level 1.8800 (target price for the completion of the active impulse wave (3)).

S&P 500: ⬇️ Sell

• S&P 500 index broke support zone
• Likely to fall to support level 5600.00

S&P 500 index recently broke the support zone between the support levels 5775.00 (monthly low from January) and 5690.00 (strong support from October and November).

These support levels coincided with the 50% and 61.8% Fibonacci retracement levels of the earlier upward impulse from September.

S&P 500 index can be expected to fall to the next support level 5600.00 (target price for the completion of the active short-term impulse wave (i)).