COMMODITIES: Crude Plunges, Precious Metals Fall As US Tariffs Roil Markets

• Tariff considerations have been a primary driver of FX sentiment on Tuesday, with Mexican peso & Canadian dollar weakness persisting across the session. Their depreciation may have been somewhat offset by broader dollar weakness, as the ongoing stagflationary concerns regarding the US economy also gain traction. This has placed the Ice Dollar index at its lowest level since December 09, printing a low of 105.88.
• The DXY break to new yearly lows coincided with several key technical levels giving way across the majors. For EURUSD, spot has broken a cluster of resistance between 1.0525/33 which has been the key focus in recent sessions. The pair was given an additional late boost from Germany’s conservative leader, who provided details on changing the debt brake, prompting EURUSD to extend to ~1.0575. A close at current levels would highlight an important technical break, providing the foundation for a stronger bullish short-term theme, initially opening 1.0630, the Dec 6 high.
• USDJPY also broke below 148.60 support, a level that had been building in significance. Spot traded as low as 148.10 but has bounced back closer to 149.00 ahead of the APAC crossover. Today’s breach does strengthen the current bearish condition and signal scope for a more protracted move lower to 146.95, a Fibonacci retracement.
• USDCHF is down 0.86% on the session, standing out in G10. In recent sessions, both 20- and 50-day exponential moving averages have moved into a bear-mode, signalling scope for further downside. Support levels remain scant, with a 50% Fibonacci retracement point (drawn from 2024 low – 2025 high) at 0.8788, the immediate technical level of note.
• Lower US yields and equities prompted further pressure on AUDJPY, which briefly extended its 3-week slide to 5.6%, reaching a low of 91.86 and narrowing the gap to key support ~90.20. Australian GDP data is due on Wednesday, before Swiss CPI. US ADP and ISM Services PMI are also scheduled.

• US Data/Speaker Calendar (prior, estimate)
• 5-Mar 0700 MBA Mortgage Applications (-1.2%, --)
• 5-Mar 0815 ADP Employment Change (183k, 140k)
• 5-Mar 0945 S&P Global US Services PMI (49.7, 49.7)
• 5-Mar 1000 Factory Orders (-0.9%, 1.7%) Durables (3.1%, 3.1%)
• 5-Mar 1000 ISM Services Index (52.8, 52.5)
• 5-Mar 1000 ISM Services Prices Paid (60.4, 60.0)
• 5-Mar 1400 Federal Reserve Releases Beige Book
• 5-Mar 1130 US Tsy $60B 17W bill auction

• RES 4: 1.2887 2.0% 10-dma envelope
• RES 3: 1.2811 High Dec 6 ‘24
• RES 2: 1.2767 50.0% retracement of the Sep 26 ‘24 - Jan 13 bear leg 
• RES 1: 1.2754 High Mar 4
• PRICE: 1.2714 @ 16:24 GMT Mar 4 
• SUP 1: 1.2545 50-day EMA     
• SUP 2: 1.2440 Low Feb 13
• SUP 3: 1.2333 Low Feb 11 and a key support  
• SUP 4: 1.2249 Low Feb 3    

The trend outlook in GBPUSD remains bullish and Tuesday’s initial strong gains reinforce this theme. Note that moving average studies have recently crossed into a bull-mode position, highlighting a potentially stronger bull cycle. Initial firm support to watch is 1.2545, the 50-day EMA. A continuation higher would open 1.2767, the 50.0% retracement of the Sep 26 ‘24 - Jan 13 bear leg.