Nick Goold
Last week, markets bounced back strongly. The NASDAQ jumped over 6%, the S&P 500 rose more than 4%, and the Dow went up over 2%. The U.S. dollar also started to recover, especially against the yen, while Bitcoin rose and gold prices fell. The main reason for the rally was President Trump pulling back from his earlier attacks on Federal Reserve Chair Jerome Powell, which made investors feel more confident about the Fed staying independent.
There was also some relief as trade tensions between the U.S. and China seemed to ease. The U.S. government showed a softer approach on tariffs, which helped calm markets. On top of that, company earnings reports were better than expected—over 70% of U.S. companies beat forecasts, with tech companies doing especially well.
Economic news was mixed. Orders for durable goods went up, mostly because of strong transportation sales. But business activity slowed to its weakest level in 16 months, and inflation remained a concern, partly due to tariffs. Even so, markets focused on President Trump’s actions and comments. His softer tone on the Fed and trade talks helped lift investor mood and pushed stocks and other risk assets higher.
Markets This Week
U.S. Stocks
Market sentiment turned positive last week as concerns over Federal Reserve independence eased. Optimism is now growing over potential progress in U.S.-China tariff talks. Technical indicators are pointing higher, with prices recovering from the March lows. This week, expect a period of consolidation. Range trading looks like the best strategy, with a chance of further gains. Support sits at $39,000 and $38,000, while resistance is at $40,000, then $40,750 and $42,000.
Japanese Stocks
The Nikkei 225 gained alongside U.S. stocks and support from a stronger USD/JPY. Resistance from the March lows is still holding, so range trading or buying dips remains a solid approach this week. Key levels to watch are resistance at 36,000円 and 37,000円, and support at 35,000円 and 34,000円.
USD/JPY
USD/JPY held strong at the key 140 support level and rebounded sharply, breaking the April downtrend after closing above the 10-day moving average on Friday. Given the sharp drop over the past month, more upside is possible. Traders should look for buy setups this week. Resistance is at 144, 145, then 146.50. Support levels are at 142.50, 142.00, and 141.00.
Gold
Gold reversed sharply after hitting $3,500 last week, forming a bearish daily reversal as the U.S. dollar started to recover. The uptrend is still intact if prices stay above the 10-day moving average. Continued uncertainty in financial markets could support prices. Look for buying opportunities if pullbacks hold above key support. Watch support at $3,300, $3,265, and $3,245. Resistance sits at $3,375, $3,400, $3,430, and $3,500.
Crude Oil
Crude oil was rejected at $65 but found strong buying support at the 10-day moving average. As market confidence returns, downside risk appears limited. This week, traders should look for buying opportunities near support, with key levels at $62 and $60, and resistance at $65 and $67.
Bitcoin
Bitcoin had a strong breakout above $90,000, supported by renewed buying interest after Trump’s comments on the Federal Reserve encouraged risk appetite. The market is now eyeing the $100,000 level. Staying bullish and buying on dips looks best. Resistance is at $100,000. Support levels to watch are $90,000, $85,000, and $80,000.
This Week’s Focus
Wednesday: U.S. GDP, U.S. Inflation Data (PCE)
Thursday: Bank of Japan Rate Decision, U.S. Manufacturing PMI
Friday: U.S. Employment Report
Markets will be watching U.S.–China trade negotiations closely this week. Hopes for de-escalation have supported recent rallies, but uncertainty remains high, and new headlines could trigger sharp market moves. The U.S. employment report on Friday is the most important data release of the week. Traders will be looking for signs of strength—or weakness—in the labor market as pressure from tariffs continues to weigh on global sentiment. The Bank of Japan is expected to keep rates unchanged on Thursday, but any shift in tone or forward guidance could move markets, especially as Japan monitors U.S. trade policy developments.
The U.S. Dollar Is Under Pressure — and It Matters to Every Trader
Last week, the U.S. dollar index dropped below 100 for the first time in over three years. That’s a big warning sign. Whether you trade forex, stocks, commodities, or crypto, the U.S. dollar plays a major role in the markets. When it moves, everything else reacts.
There are two main reasons for the dollar’s weakness:
- Trump’s tariff policies are making global trade unpredictable..
- The Federal Reserve’s independence is in doubt, as Trump keeps pushing for lower interest rates.
When investors believe politics are influencing central bank decisions, they lose trust in U.S. policy—and in the dollar.
The dollar began to recover slightly at the end of last week after Trump made comments that reassured markets about not interfering with the Fed. This may have paused the selling—for now. But Trump remains unpredictable, and market confidence in his decisions has already taken a hit. Any sudden change or new tariff threat could send the dollar back down quickly.
Bond Market Signals Trouble
Investors are also selling U.S. government debt, pushing long-term interest rates higher. This puts pressure on the economy and increases borrowing costs. To ease market fears, Trump delayed new tariffs by 90 days. But traders see this as a short-term move, not a long-term solution. Right now, the markets are reacting more to headlines than data.
Why the Dollar Matters So Much
The U.S. dollar is the foundation of global finance. It impacts almost every major market:
- Commodities are priced in dollars – When the dollar weakens, prices for things like gold and oil usually go up.
- Most international trade uses the dollar – It’s the world’s main transaction currency.
- Many countries borrow in dollars – A strong or unstable dollar can cause debt problems in emerging markets.
- Other currencies like the yen and euro often move in the opposite direction – Creating high volatility in forex.
- U.S. stocks and bonds are affected – A weak dollar can cause foreign investors to pull out, putting pressure on U.S. markets.
What This Means for Traders
If you’re trading in this environment, here’s what you need to focus on:
1. ⚡ Expect strong trends—but fast reversals
Markets may follow clear directions for hours or days—but one tweet or headline can flip everything. Stay flexible. Don’t hold onto trades just because they were working yesterday.
2. 💵 Watch the dollar—even if you’re not trading it
The dollar affects everything: commodities, oil, stocks, crypto, and other currencies. If the dollar drops, safe havens rise. If it recovers, risk assets may sell off. Watching the USD index chart can help you understand when market sentiment is shifting. A falling dollar with rising fear often leads to larger, more volatile market moves.
3. 🏅 Focus on safe havens like gold
Gold is sensitive to dollar weakness and uncertainty. If traders lose trust in U.S. policy, gold becomes the go-to asset. Buying dips and using simple trend-following strategies can work well in this environment.
4. 🌍 Monitor risk sentiment and stay alert to headlines
When the dollar is weak and uncertainty is high, traders shift to risk-off mode. This can lead to capital flowing into the yen or gold, and selling of equities in the U.S. and globally as investors reduce exposure to risk. This is a headline-driven market—press releases, tariff announcements, or policy comments can trigger sudden moves. Follow the mood of the market, not just the technical charts, and stay updated with alerts or news feeds—especially during U.S. hours.
5. 🛑 Use stop losses and clear profit targets
Volatility is high. A winning trade can turn quickly. Protect your account with smaller position sizes and stop losses that reflect current market conditions. Be ready to take profits faster when the market turns. Also consider using trailing stops to lock in gains while staying in strong trends. Markets can move more than expected in this environment, so look for opportunities to be patient and let your profits run when momentum is on your side.
The U.S. dollar is under pressure—and it’s dragging the whole market with it. Political risk, trade tensions, and doubts about Fed independence are making the dollar unstable. For traders, this means:
- Bigger price swings
- Stronger trends with sudden reversals
- More news-driven trading
- Opportunities—but also more risk
Trade smart, and keep your eye on the dollar. It’s the most important chart in the world right now.
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