Weekly Forecast: Tariff Talk

Hey everyone! Walid here, ready to break down the week ahead in the markets. Whether you’re trading forex, gold, or the S&P, there’s a lot to unpack, so let’s dive right in!

What’s on the Economic Calendar?

This week is packed with events that could shake things up. In the U.S., all eyes will be on speeches from Federal Reserve officials, along with some key data releases:

Globally, we’ve got inflation data from Germany and Australia, GDP updates from Switzerland and Canada, and the German elections, which could stir up some volatility. It’s going to be a busy week, so keep your charts close and your coffee closer!

Is the Dollar Still a Buy?

The dollar has been a bit shaky lately, especially with all the tariff talk. The temporary extension for Canada and Mexico caused some jitters, but I still think the dollar has some strength left in it. Why? Two words: monetary policy.

The tariff narrative is definitely influencing the markets, and traders might be underestimating the risk of new tariffs from the Trump administration. Goldman Sachs even suggested that betting against the Euro and Canadian dollar could be a smart hedge against tariff risks. But here’s the thing—not all tariffs are created equal. The real risk lies in reciprocal tariffs, which could actually give the dollar a boost.

Sure, speculative dollar bulls have taken a step back, but when you look at the fundamentals, the dollar still looks like a buy to me. If the data supports it, we might even get some cheaper entry points for dollar-long positions.

Key Currency Pairs to Keep an Eye On

USD/JPY (Dollar/Yen):

The Yen has been flexing its muscles lately, thanks to risk-off sentiment and higher-than-expected inflation data from Japan. This has sparked some chatter about the Bank of Japan potentially raising rates sooner than expected. While that’s interesting, the divergence between the dollar and yen isn’t quite enough to get me excited just yet.

USD/CHF (Dollar/Swiss Franc):

Now, this is where things get interesting! I’m currently long on this pair, and here’s why: the Swiss National Bank (SNB) is still in full-on dovish mode. They might even intervene to weaken the Franc, which could push this pair higher. I’m eyeing a revisit of the recent highs, but if you’re feeling contrarian, a pullback to a supply zone could offer a short opportunity.

USD/CAD (Dollar/Canadian Dollar):

The tariff story is front and center here. If the U.S. and Canada can’t reach a deal and negotiations get tense, we could see the dollar gain some ground against the loonie.

GBP/USD (Pound/Dollar):

The pound has had some decent news lately, but let’s not forget about those pesky stagflation fears. It’s a bit of a mixed bag, so tread carefully.

GBP/JPY (Pound/Yen):

The Yen has been on a roll, and this pair is feeling the pressure. Keep an eye on risk sentiment, as it could drive further moves.

Euro Index:

The Euro has been struggling lately, and the index reflects that. If you’re trading EUR pairs, watch for any signs of a reversal.

Final Thoughts

As always, the key to navigating this week is staying flexible. Markets can shift in a heartbeat, especially with all the data and geopolitical events on the calendar. Keep an eye on the economic releases, manage your risk, and don’t be afraid to adapt your strategy as conditions change.

Pairs to Watch This Week:

That’s it for now, folks! Wishing you a week of smart trades and green pips. Catch you in the next update!