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As the XAU/USD chart indicates, gold prices have risen in the early days of March.

Bullish sentiment is being driven by:

→ Investor positioning ahead of key US labour market data – the Non-Farm Employment Change report (due Friday at 16:30 GMT+3), which could provide insights into the Federal Reserve’s interest rate trajectory.

→ Trump’s tariff announcements, adding to global trade tensions – According to The Wall Street Journal, recession fears are resurfacing among market participants. Meanwhile, Barron’s draws a parallel between Trump’s tariffs and the 1930 Smoot-Hawley Tariff Act, which is widely blamed for deepening the Great Depression.

Technical Analysis of the XAU/USD Chart

Gold prices in 2025 are forming an ascending channel (marked in blue).

From a bearish perspective, we observe:

→ A break below an intermediate bullish trendline (shown in orange).

→ The median line of the channel acting as resistance (indicated by an arrow).

→ A bearish Quasimodo pattern (labelled near key price extremes).

From a bullish perspective, gold remains within the blue ascending channel, suggesting that its lower boundary could act as support. If this holds, bulls may attempt to push prices higher towards the key $3,000 psychological level.

However, market direction will largely depend on the broader news backdrop, particularly developments in geopolitics and global trade policy.

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Market picture

Crypto market capitalisation returned to the $3 trillion area towards the end of the week ahead of the first crypto summit in the Oval Office. In the short term, buyers on downturns were strong enough to buy back two powerful selloffs. However, an important test of the previous support level at $3.15 trillion is ahead.

Sentiment is moving away from the low point but remains in formal extreme fear territory at the 25. As intended by the creators of such indices, a recovery from this area represents a buying opportunity. We still consider the market reaction after Friday’s summit to be an important confirmation signal.

Bitcoin is gaining for the third day, having pushed off from support in the form of the 200-day moving average. The ascent is more measured this time compared to the market pumping last weekend. But we are cautious of talking about a bullish victory until BTCUSD breaks above the 50-day moving average, which is now at $97,000.

Ethereum is trading near $2300 and trying to break out, but for now, it remains below levels before the Republicans won the election in November. So far, its momentum should be characterised as a technical rebound after a strong selloff rather than the start of a recovery.

News background

Trump will announce a ‘significant’ change in crypto policy, including plans for a Bitcoin Strategic Reserve at a White House summit on 7 March, US Secretary of Commerce Howard Lutnick said. Bitcoin will receive ‘special status’, and other cryptocurrencies will also be treated ‘positively’, he said.

Mexican billionaire Ricardo Salinas said that 70% of his investment portfolio is allocated to Bitcoin-related assets. The remaining 30% comes from gold and gold mining companies.

Despite BTC falling below $90,000, El Salvador expanded its national bitcoin reserve by 19 BTC, again deviating from its plan to buy one coin per day. El Salvador’s president said the country will continue to accumulate bitcoins despite pressure from the IMF.

CryptoQuant calculated that the unrealised gains of market participants holding between 1,000 ETH and 10,000 ETH have turned negative, showing the worst levels since the previous bear market.

Eurozone retail sales volume dropped by -0.3% mom in January, missing expectations of a modest 0.1% mom increase. The decline was driven by weaker demand for non-food products, which fell -0.7% mom, while sales of automotive fuel also slipped by -0.3% mom. In contrast, spending on food, drinks, and tobacco rose by 0.6% mom, offering a slight offset to the overall decline.

Meanwhile, retail sales across the broader EU fell -0.2% mom on the month. Among individual EU, Slovakia saw the sharpest contraction, with retail trade volume plunging -9.0%, followed by Lithuania (-4.8%) and Cyprus (-2.2%). On the other hand, Slovenia (+2.3%), Hungary (+2.2%), and the Netherlands (+1.6%) recorded the strongest increases.

Full Eurozone retail sales release here.

• An aggressive fiscal spending proposal by Germany has attracted bullish animal spirits into EUR/USD.
• A significant rally in the longer-end German Bund yields is likely to alter ECB monetary policy guidance towards a “less dovish stance.”
• The three-month rally in the EUR/USD has reached overbought condition, at risk of a minor corrective pull-back below 1.0885/0940.

In the upcoming European Central Bank (ECB) meeting on Thursday, 6 March, where market participants are expecting another 25 basis points (bp) cut, its sixth reduction to reduce the key policy deposit rate to 2.50%, also a two-year low.

Our prior report dated 4 December 2024 highlighted, “The medium-term downtrend of EUR/USD remains intact, but a mean reversion corrective rebound may occur first below 1.0770 key medium-term resistance.”

The EUR/USD has rebounded by 6.2% as expected from its intraday low of 1.0178 printed on 13 January to Thursday, 5 March, with the current intraday level of 1.0811 at this time of the writing. The “Trump Trade” of a stronger US dollar ex-post US presidential election riding on the coattails of rising longer-term US Treasury yields due to deeper corporate tax cuts that tend to widen the US budget deficit as well as a potential myriad of trade tariffs against major US trading partners has been evaporated.

The EUR/USD is now trading at levels close to the day of the US presidential election on 5 November 2024. Geopolitics and a change of fiscal policy stance in Germany are the key catalysts driving the ongoing rally in the Euro.

New aggressive fiscal stimulus plan from Germany

Germany’s newly elected incoming Chancellor Friedrich Merz has campaigned on a more expansionary fiscal policy, a radical shift away from his predecessors that championed on fiscal austerity policies.

Merz has proposed the biggest government spending spree since reunification in 1990. Defense and infrastructure outlays could amount to approximately 1 trillion euros, around 20% of GDP. Also, the new coalition government is set to relax the Berlin “debt brake” fiscal rule in the constitution to exempt defense spending above 1% of the GDP output.

Geopolitics also play a significant role in the latest crafting of an aggressive defense expenditure plan for Germany. US President Trump has signaled that the US is not willing to provide a solid security guarantee to Ukraine in any US brokered peace deal to end the three-year Russia-Ukraine war.

Higher fiscal spending allows ECB to be less dovish

Fig 2: 10-year yield spread of German Bund/US Treasury Note with EUR/USD as of 6 Mar 2025 (Source: TradingView, click to enlarge chart)

The ECB may provide a less dovish guidance after today’s monetary policy decision meeting during President Lagarde’s press conference, as Germany’s aggressive expansionary fiscal policy can do the “heavy lifting” to reverse the Eurozone’s sluggish growth trajectory in the past two years.

Hence, the ECB is likely at the tail-end of its current interest rate cutting cycle where the German Bund market has responded strongly to a potential upcoming change in Eurozone’s monetary policy stance. The longer-end 30-year German Bund yield jumped by around 25 bps to 3.08% on Wednesday, 5 March, its biggest daily increase since October 1998.

The 10-year yield spread between the German Bund and the US Treasury Note has tracked closely with the movement of the EUR/USD in a direct correlation fashion (see Fig 1).

The current uptick in the 10-year German Bund/US Treasury Note yield spread may see further upside to test its key long-term secular resistance at -1.35%, which translates to a further potential upmove in the EUR/USD towards a parallel long-term secular resistance level of 1.1040 in the coming weeks (see Fig 1).

Overbought condition reached in EUR/USD, at risk of an imminent pull-back below 1.0885/0940

Fig 2: EUR/USD medium-term & major trends as of 6 Mar 2025 (Source: TradingView, click to enlarge chart)

In the lens of technical analysis, price actions of highly liquid traded instruments do not move vertically but oscillate within trends.

The recent three-month rally seen in the EUR/USD has reached an overbought condition as indicated by its daily RSI momentum indicator, and its price actions are coming close to a former major ascending trendline support from 3 October 2023 low now turns into a pull-back resistance at 1.0885/0940.

Thus, the next probable move in the EUR/USD is likely a minor corrective pull-back within a medium-term uptrend phase. The first support to watch in this potential minor corrective pull-back sequence will be at 1.0730 (also the 200-day moving average), followed by the 1.0600 key medium-term pivotal support (also the 20-day moving average) to maintain the current medium-term uptrend phase in place since the 13 January 2025 low (see Fig 2).

On the flip side, another swift rally above 1.0940 sees a squeeze up towards the 1.1010/1040 long-term secular resistance.

Daily Pivots: (S1) 191.13; (P) 191.73; (R1) 192.57; More...

Intraday bias in GBP/JPY remains neutral as range trading continues. On the upside, firm , fir break of 193.04 will resume the rebound from 187.04 to 194.73 resistance, and then 198.94. On the downside, firm break of 187.04 will extend the fall from 199.79 towards 180.00 support. Overall, corrective pattern from 180.00 might still be extending.

In the bigger picture, price actions from 208.09 are seen as a correction to rally from 123.94 (2020 low). Strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. However, sustained break of 152.11 will bring deeper fall even still as a correction.

Daily Pivots: (S1) 159.32; (P) 160.03; (R1) 161.32; More...

Intraday bias in EUR/JPY stays on the upside for the moment. Rise from 154.77 is seen as another rising leg in the corrective pattern from 154.40. Further rally should be seen towards 164.89 resistance. On the downside, below 159.52 minor support will turn intraday bias neutral first.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). Strong support should be seen from 38.2% retracement of 114.42 to 175.41 at 152.11 to contain downside. However, sustained break of 152.11 will bring deeper fall even still as a correction. Next target will be 100% projection of 175.41 to 154.40 from 166.67 at 145.66.

Daily Pivots: (S1) 0.8316; (P) 0.8349; (R1) 0.8398; More...

Intraday bias in EUR/GBP stays on the upside for the moment. Rise from 0.8239 is seen as the third leg of the pattern from 0.82210. Sustained break of 1.8% retracement of 0.8472 to 0.8239 at 0.8383 will target 0.8472 resistance next. On the downside, below 0.8345 minor support will turn intraday bias neutral first.

In the bigger picture, EUR/GBP is still bounded inside medium term falling channel. While rebound from 0.8221 might extend higher, it could still develop into a corrective pattern. Overall outlook will be neutral at best and down trend from 0.9267 (2022 high) could extend, at least until decisive break of channel resistance (now at 0.8511).

Daily Pivots: (S1) 1.6944; (P) 1.7019; (R1) 1.7106; More...

Intraday bias in EUR/AUD stays on the upside for the moment. Current rise from 1.5963 should target 100% projection of 1.5963 to 1.6800 from 1.6355 at 1.7192, which is close to 1.7180 high. On the downside, below 1.6955 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, with 1.5996 key support (2024 low) intact, larger up trend from 1.4281 (2022 low) is still in favor to resume through 1.7180 at a later stage. Nevertheless, sustained break of 1.5996 will indicate that such up trend has completed and deeper decline would be seen.

Daily Pivots: (S1) 0.9491; (P) 0.9557; (R1) 0.9677; More....

Intraday bias in EUR/CHF stays on the upside for the moment. Firm break of 100% projection of 0.8204 to 0.9516 from 0.9331 at 0.9643 will extend the rise from 0.9204 to retest 0.9928 key structural resistance. For now, further rally will remain in favor as long as 0.9516 resistance turned support holds, in case of retreat.

In the bigger picture, the strong break of 55 W EMA (now at 0.9484) is a medium term bullish sign. Sustained break trading above long-term falling channel resistance (at around 0.9620) would suggest that the downtrend from 1.2004 (2018 high) has finally bottomed at 0.9204. Further break of 0.9928 will solidify this bullish case, and bring stronger medium term rise even still as a corrective move.

The US currency continues to test new lows amid slowing economic growth in the United States and the introduction of new tariffs on China and Canada. Investor disappointment with Trump’s initial executive orders has led to broad-based dollar sell-offs.

USD/JPY

At the start of the week, USD/JPY sellers managed to break a key support level at 149.00–148.60. The price had not fallen below this range since November last year. The downward breakout was followed by a rebound and a retest of the psychological level at 150.00.

Technical analysis of USD/JPY suggests a potential continuation of the downtrend towards 147.00–146.80, as a bearish engulfing pattern is forming on the daily timeframe. To negate the bearish correction scenario, the pair must consolidate above 150.60–150.00.

In the coming trading sessions, the following events could influence USD/JPY pricing:

• Today at 16:30 (GMT+2): US initial jobless claims
• Today at 16:30 (GMT+2): US non-farm productivity
• Today at 21:00 (GMT+2): GDPNow indicator from the Federal Reserve Bank of Atlanta
• Today at 23:30 (GMT+2): Speech by FOMC member C. Waller

USD/CAD

New tariffs on Canadian goods, introduced two days ago, have driven USD/CAD back towards the 1.4550–1.4500 range. Dollar buyers failed to break above this level, and a subsequent pullback from 1.4550 led to the formation of a bearish engulfing pattern. Technical analysis of USD/CAD indicates a possible downward correction towards 1.4230–1.4170. A resumption of the uptrend is possible if the pair consolidates firmly above 1.4480.

Key events to watch until the end of the week:

• Today at 16:30 (GMT+2): Canada’s trade balance
• Today at 17:00 (GMT+2): Ivey Purchasing Managers’ Index for Canada
• Tomorrow at 16:30 (GMT+2): US average hourly earnings
• Tomorrow at 16:30 (GMT+2): Canada’s employment change

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.