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It’s both nothing and everything at the same time that sent the markets to a dark hole on Monday. The stock markets across the globe were heavily hit by the fears that Trump trade and international policies would have a terrible economic and geopolitical fallout in the US and beyond its borders. The recession bets are rising by the day, the companies are giving murkier forecasts due to tariffs, the US’ biggest trading partners respond. Ontario in Canada for example asked its grid operator to increase its prices on US exports by 25%. China imposed 10-15% tariffs on US agricultural imports, Delta headlines yesterday joined its peers in slashing its Q1 revenue forecast pointing at weak consumer and corporate travel, and all major US indices from small to big caps are making big moves to the downside. The Trump optimism is far gone. The S&P500 has now wiped out all the post-election gains. The index made a second and sharp dip below the 200-DMA and closed the session . Nasdaq 100 dropped 3.80% yesterday, extended losses below its own 200-DMA, below the 20’000 psychological mark, having tested the minor 23.6% Fibonacci retracement on the AI rally that started in 2023 and having lost more than 10% since its February ATH peak. It means that Nasdaq is officially in the correction zone. Tesla has lost more than 15% just yesterday, wiped out all the post-election gains and is down by more than 50% since the December peak on expectation that Musk’s involvement in world’s politics will have an ugly impact on its sales. Then, the most popular ‘America First’ indices, the mid and small caps are also hammered. The US mid cap index has now fallen below the major 38.2% Fibonacci retracement on last October-to-now rally and stepped into the bearish consolidation zone. And the small cap index, the Russell 2000, has already stepped below its own major 38.2% Fibonacci retracement at the start of the month and has now given back more than half of the Trump-led gains. All indices are now close or in the oversold condition territory, but the fact that we are coming from a very high optimism peak for the US equities and strong global long positioning, the pullback has room to deepen. The diving US yields on recession bets and the rising safe haven demand is no consolation. It tells a lot about how investors feel about what’s cascading from the White House: it’s the worst market sentiment since Covid. A softer-than-expected CPI update from the US tomorrow could eventually slow down the selloff on the thinking that the Federal Reserve (Fed) could - maybe - help soothing investors’ nerves. But a stronger-than-expected figure would be very bad news.

Now, the White House disaster has been a boon for the European stocks. The US’ decision to pull back its military support from under the feet of the Europeans unleased the European beast. The European countries led by Germany threw their budget discipline out of the window and pledged to spend hundreds of billions of euros to strengthen their defense budgets and the latter sent the DAX some 18% higher since the beginning of January, while the S&P500 lost more than 5% during the same period and almost 10% since its February peak. But even the DAX index looked sorry yesterday as the Greens in Germany rejected a debt-financed package because their green demands weren’t well responded in Merz’ plans. And Merz needs the Greens - as it needs a two-thirds majority - to pass a constitutional amendment to ease borrowing restrictions. But hey, German Greens’ co-leader said on Bloomberg TV this morning that there could be a deal on budget as early as this week and the EU is making the same moves to let the member states borrow more to throw at defense. As such, the European stocks will likely continue to outperform their US peers, although gains could become vulnerable if the global market sentiment gets worse from here.

The goodnews is that the selloff seems to have moderated in Asia and the futures are in the positive in Europe at the time of writing. The risks remain skewed to the downside for the US equities, cautiously to the upside for the European peers. Conversely, appetite for US sovereign bonds is rising on the expectation that the Fed can’t let the US economy collapse, while the European sovereign bonds are offered on the sudden end of the budget discipline on the old continent. Gold remains a popular hedge for investors seeking refuge from the agitated international waters, while Bitcoin has so far failed to give that sort of ‘safe haven’ comfort to investors.

In the traditional currency space, the USD selloff has somewhat slowed yesterday, but the dovish shift in Fed expectations and hawkish shift in other central bank expectations - like the European Central Bank (ECB) expectations for example on the thinking that the ECB must slow down rate cuts to temper the impact of massive government spending - continue to keep the outlook for the US dollar negative compared to major peers.

In energy, US crude is testing the $65pb level to the downside on waning growth expectations. The outlook remains skewed to the downside.

Daily Pivots: (S1) 1.0802; (P) 1.0839; (R1) 1.0872; More...

Intraday bias in EUR/USD is turned neutral first with current retreat. Some consolidations would be seen below 1.0887 temporary top. Downside should be contained by 55 4H EMA (now at 1.0682) to bring another rally. Above 1.0887 will resume the rise from 1.0176 to 161.8% projection of 1.0176 to 1.0531 from 1.0358 at 1.0932. Firm break there will pave the way back to 1.1274 key resistance next.

In the bigger picture, the strong break of 55 W EMA (now at 1.0675) suggests that fall from 1.1274 (2024 high) has completed as a three wave correction to 1.0176. Rise from 0.9534 is still intact, and might be ready to resume. Decisive break of 1.1274 will target 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. Also, that will send EUR/USD through a multi-decade channel resistance will carries larger bullish implication. This will now be the favored case as long as 1.0531 resistance turned support holds.

Daily Pivots: (S1) 146.59; (P) 147.30; (R1) 147.97; More...

Intraday bias in USD/JPY remains mildly on the downside for the moment. . Sustained trading below 61.8% retracement of 139.57 to 158.86 at 146.32 will pave the way to 139.57 support. On the upside, 148.38 minor resistance will turn intraday bias neutral and bring consolidations again, before staging another fall.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 1.2843; (P) 1.2895; (R1) 1.2928; More...

Intraday bias in GBP/USD stays neutral for consolidation below 1.2945 temporary top. Downside of retreat should be contained by 1.2715 resistance turned support to bring another rally. On the upside, sustained break of 61.8% retracement of 1.3433 to 1.2099 at 1.2923 will pave the way back to 1.3433 high.

In the bigger picture, fall from 1.3433 (2024 high) should have completed at 1.2099 as a corrective move. Up trend from 1.3051 (2022 low) is still in progress but it's too early to say that it's resuming. Corrective pattern from 1.3433 could extend with one more down leg. But after all, eventual upside breakout is expected at a later stage.

Daily Pivots: (S1) 0.8770; (P) 0.8796; (R1) 0.8834; More…

Intraday bias in USD/CHF is turned neutral with current recovery, and some consolidations would be seen above 0.8757 temporary low. Upside should be limited by 0.8911 support turned resistance to bring another fall. On the downside, below 0.8757 will target 61.8% retracement of 0.8374 to 0.9200 at 0.8690. Sustained break there will pave the way back to 0.8374 support.

In the bigger picture, rejection by 0.9223 key resistance keep medium term outlook bearish. That is, larger fall from 1.0342 (2017 high) is not completed yet. Firm break of 0.8332 (2023 low) will confirm down trend resumption.

Daily Pivots: (S1) 0.6252; (P) 0.6292; (R1) 0.6318; More...

Intraday bias in AUD/USD stays neutral for now. On the downside, break of 0.6186 will target 0.6087 support first. Firm break there will resume whole decline from 0.6941. However, sustained trading above 38.2% retracement of 0.6941 to 0.6087 at 0.6413 will raise the chance of near term bullish reversal, and target 61.8% retracement at 0.6615 next.

In the bigger picture, fall from 0.6941 (2024 high) is seen as part of the down trend from 0.8006 (2021 high). Next medium term target is 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.6487) holds.

Daily Pivots: (S1) 1.4370; (P) 1.4422; (R1) 1.4490; More...

Intraday bias in USD/CAD remains neutral and outlook is unchanged. Overall, corrective pattern from 1.4791 should still be extending. Break of 1.3248 will target 1.4150 support and possibly below. Meanwhile, break of 1.4541 will bring stronger rise back to retest 1.4791.

In the bigger picture, long term up trend is tentatively seen as resuming with prior breach of 1.4667/89 key resistance zone (2020/2015 highs). Next target is 100% projection of 1.2401 to 1.3976 from 1.3418 at 1.4993. This will remain the favored case as long as 1.3976 resistance turned support holds (2022 high), even in case of deep pullback.

Daily Pivots: (S1) 0.9505; (P) 0.9531; (R1) 0.9571; More....

EUR/CHF is staying in consolidations below 0.9634 and intraday bias remains neutral. Further rally will be expected as long as 55 4H EMA (now at 0.9485) holds. On the upside, above 0.9634, and sustained trading above 61.8% retracement of 0.9928 to 0.9204 at 0.9651 will pave the way back to 0.9928 key resistance next.

In the bigger picture, the strong break of 55 W EMA (now at 0.9482) 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 bottomed at 0.9204. Stronger rally should then be see to 0.9928 key resistance at least.

Daily Pivots: (S1) 188.82; (P) 190.02; (R1) 190.84; More...

GBP/JPY is still bounded in range trading and intraday bias stays neutral. On the upside, firm 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) 158.86; (P) 159.62; (R1) 160.35; More...

Intraday bias in EUR/JPY remains neutral at this point. Overall development suggests that consolidation pattern from 154.40 is extending with another rising leg. On the upside, break of 161.25 will target 164.89 resistance.

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.