Trump’s Conciliatory Tone Bolsters Wall Street

Market Summary

U.S. equities rallied in the previous session as optimism grew over potential progress in U.S.-China trade relations, following remarks from Treasury Secretary Scott Bessent and reports that the White House is considering reducing tariffs on Chinese goods. Bessent’s comments at the Institute of International Finance highlighted an “opportunity for a big deal” with China, suggesting a possible de-escalation in the trade war. However, he also emphasized the need for structural reforms in global financial institutions, criticizing the World Bank for lending to advanced economies like China. 

The S&P 500 and Nasdaq extended gains, recovering from last week’s losses, while the Dollar Index (DXY) held steady near 99.50 as investors assessed the mixed signals on trade policy.

Easing risk aversion triggered a broad pullback in safe-haven assets, with gold prices slipping toward the $3,300 mark. Safe haven currencies such as the Japanese Yen and Swiss Franc also weakened modestly, though they continue to hover near elevated levels amid persistent geopolitical and macroeconomic uncertainties.

Crude oil prices remained volatile as traders awaited the latest U.S. inventory data—expectations point to a modest drawdown, which could provide further support to oil markets.

Looking ahead, today’s initial jobless claims data will be closely monitored for further clues on the resilience of the U.S. labor market. A lower-than-expected reading could reinforce expectations of sustained economic strength, potentially bolstering the dollar and risk assets. Conversely, an uptick in claims may fuel concerns over softening demand, weighing on equities and supporting safe havens like Treasuries and gold. Market volatility is likely to remain elevated as traders assess the data alongside ongoing trade policy developments and geopolitical risks.

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Current rate hike bets on 7th May Fed interest rate decision: 

0 bps (95.2%) VS -25 bps (4.8%)

Source: CME Fedwatch Tool

Market Overview

Economic Calendar

(MT4 System Time)

Source: MQL5 

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Market Movements

DOLLAR_INDX, H4

The Dollar Index rebounded slightly as investors regained confidence following a more positive tone from the US on both trade talks and Fed independence. Trump clarified he has “no intention of firing” Fed Chair Powell, easing concerns over political interference. Meanwhile, hopes for a partial tariff rollback in US-China negotiations and comments from Treasury Secretary Bessent pointing to a near-term de-escalation helped lift market sentiment and risk appetite.

The Dollar Index is trading higher while currently testing the resistance level. MACD has illustrated diminishing bearish momentum, while RSI is at 36, suggesting the index might extend its gains after breakout since the RSI rebounded sharply from oversold territory. 

Resistance level: 100.15, 102.95

Support level: 97.15, 95.85

XAU/USD, H4

Gold prices retreated slightly and hovered near support, as markets remained in wait-and-see mode over US-China trade talks. While both sides expressed interest in continued negotiations, no deal has been scheduled yet. China’s Foreign Ministry accused the US of “extreme pressure,” warning it’s “not the right way to deal with China.” Trump, in contrast, adopted a softer tone, saying he’s “not going to play hardball.” With no firm progress, market uncertainty persists, keeping gold in a consolidation phase.

Gold prices are trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 55, suggesting the commodity might extend its gains since the RSI stays above the midline. 

Resistance level:  3375.00, 3495.00

Support level: 3275.00, 3200.00

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GBP/USD，H4

The GBP/USD pair slipped below the fair-value-gap (FVG) in the previous session, signaling a potential break of structure and suggesting that the pair may be drifting away from its prior bullish trajectory. This technical move is often viewed as a bearish indicator, pointing to growing downside risk ahead. The pair was primarily pressured by the strengthening of the U.S. dollar, which gained traction following President Trump’s renewed pledge to pursue a revamped unilateral tariff policy to ease current trade tensions with China. Adding to the pressure, the UK PMI readings released yesterday fell short of expectations, offering little support to the pound. 

The pair failed to defend itself above its fair-value gap, suggesting a bearish bias. The RSI continues to dip, while the MACD edging lower toward the zero line suggests that the bullish momentum is diminishing. 

Resistance level:  1.3340, 1.3420

Support level: 1.3185, 1.3124

EUR/USD, H4

The EUR/USD pair slipped below its previous low, signaling a bearish bias as the euro continues to face mounting headwinds. The decline was largely driven by disappointing PMI figures from both Germany and the broader eurozone, which fell short of market expectations, highlighting persistent concerns over the region’s economic outlook. Meanwhile, the U.S. dollar extended its strength, buoyed by a more conciliatory tone from President Trump regarding trade tensions with China. The improved rhetoric has helped to stabilize market sentiment and fueled a risk-on rebound that favored the greenback. However, market participants remain cautious, as any reversal or shift in tone from the Trump administration regarding its tariff stance could swiftly alter the dollar’s momentum. Should trade tensions reignite, the EUR/USD pair may find temporary relief. 

The pair has broken below its previous low level, suggesting a bearish bias. The RSI has dipped below the 50 level, while the MACD is on the brink of breaking below the zero line, suggesting that the bullish momentum is vanishing. 

Resistance level: 1.1468, 1.1623

Support level: 1.1200, 1.1075

Dow Jones, H4: 

US stock indexes edged higher, helped by strong earnings from Tesla, which jumped 6% on better-than-feared results. However, gains remained limited amid lingering US-China trade concerns. Eyes now turn to upcoming tech earnings from Alphabet and Meta, which could spark further market moves depending on their performance and guidance.

The Dow is trading higher while currently testing the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 58, suggesting the index might experience technical correction since the RSI retreated from overbought territory. 

Resistance level: 18845.00, 19490.00 

Support level: 18045.00, 17440.00

USD/JPY, H4: 

The USD/JPY pair extended gains as upbeat U.S.-China trade signals and tariff rollback speculation boosted the dollar and dampened demand for the yen’s safe-haven appeal. Treasury Secretary Bessent’s comments on a potential deal and the White House’s reported plan to lower tariffs supported risk sentiment. However, upside remains limited amid uncertainty over the trade timeline, with Bessent warning a full agreement could take years. All eyes now turn to U.S. jobless claims data that strong figures may lift the pair further, while a weak print could revive yen demand if risk appetite fades.

The USD/JPY pair is extending its rebound and currently testing a key resistance zone near 143.95. While the pair remains within a short-term bullish structure, technical indicators suggest that upside momentum may be easing. The RSI is hovering around 61, having recently retreated from higher levels, indicating a slowdown in buying pressure. Meanwhile, the MACD remains in bullish territory, but the histogram shows signs of flattening, hinting at a potential momentum shift. 

Resistance level: 143.95, 147.15

Support level: 140.45, 137.45

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Crude Oil, H4

Oil prices fell 2% as reports surfaced that OPEC+ may accelerate output hikes in June. While that pressured prices, losses were limited by rumors that Trump might cut tariffs on Chinese imports, which would support demand. Tensions within OPEC+ over quota compliance also continue to influence sentiment.

Oil prices are trading lower while currently testing the support level. MACD has illustrated increasing bearish momentum, while RSI is at 46, suggesting the commodity might extend its losses after breakout since the RSI stays below the midline. 

Resistance level: 64.45, 66.65

Support level: 62.00, 59.65