Asian stocks struggled on Tuesday as investors moved away from U.S. assets, weakening Wall Street and the dollar. Worries about the Federal Reserve's independence also added more stress to Treasuries.
The Dollar index was on track for a fourth day of losses as little progress in tariff negotiations continued to weigh on sentiment.
President Donald Trump’s sharp criticism of Fed Chair Jerome Powell for not lowering interest rates led to Wall Street dropping about 2.4% on Monday, with the dollar falling to its lowest level in three years.
Gold prices hit new highs due to worries about the Federal Reserve's independence. A sign of risk sentiment is reflected in oil and other risk assets which are struggling.
Currency Strength Chart, Strongest - Weakest: JPY, CAD, GBP, AUD, NZD, USD, EUR, CHF
Source: FinancialJuice
Trade tensions between the US and China remain in limbo for now. Developments are slow as China's Xi Jinping warned other countries against making deals that would harm China.
A high-level Japanese team will deliver a letter from Prime Minister Ishiba to Chinese President Xi this week, showing efforts to ease tensions between the US and China.
A poll shows that Trump’s tariff campaign is already affecting Japanese companies, with about 10% saying it has impacted their business and more worried about future disruptions.
Looking at sentiment heading into the European Open and markets remain cautious. European Futures are indicating a weak open but the DAX is up 0.40% at the time of writing.
Economic data releases
From a data perspective, the major event for the European session will be the Eurozone Consumer Confidence Flash.
For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)
Chart of the day - DAX
From a technical standpoint, the DAX is back at the 200-day MA with another rejection yesterday.
The index is up in early trade but given the sentiment in play, a break of the 200-day MA may be a challenge.
However, the more times the DAX tests the 200-day MA the greater the chance of a breakthrough and a push higher.
Looking at the MAs it does appear that a death cross is developing as the 20-day MA eyes a cross below the 200-day MA.
The RSI remains below the 50 neutral level meaning that the bearish momentum remains in play.
US Dollar Index (DXY) Chart, April 22, 2025
Source: TradingView.com (click to enlarge)
Support
- 21000
- 20190
- 19491
Resistance
- 21404
- 21635
- 22000
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