Market volatility persists as global uncertainty grows

Recent market developments highlight a growing shift in investor sentiment, with heightened volatility driving adjustments across asset classes. A broad-based selloff in equities has been met with renewed interest in safe-haven assets, signaling a recalibration of market expectations.

Stock market reversal and the search for stability

Global equity markets, which recently experienced steep declines, have begun showing signs of stabilization. After a significant downturn in major indices, including a sharp correction in US technology stocks, futures trading suggests a tentative recovery. Some of the hardest-hit sectors, particularly in the tech industry, have seen minor rebounds, but caution remains prevalent.

Concerns over economic resilience and policy uncertainty have played a crucial role in market sentiment. Investors are closely monitoring policy signals from key economies, particularly in light of shifting trade policies and fiscal strategies that could influence corporate earnings and broader market performance.

A changing investment landscape

The recent market turmoil has prompted a shift in investment strategies. As uncertainty surrounding the US economic outlook intensifies, investors have started diversifying their exposure, seeking alternatives in European and Asian markets. There has been notable interest in certain currencies, such as the euro and yen, as well as defensive assets, including government bonds.

The foreign exchange market has also seen increased activity, with the dollar retreating from recent highs as investors reassess the sustainability of its strength. A recalibration of expectations regarding interest rate trajectories and inflation trends has further complicated market positioning.

Geopolitical and trade factors add to uncertainty

Ongoing discussions between major economies over trade policy remain a significant source of concern. The prolonged lack of progress in resolving tariff disputes has added pressure to global supply chains, with potential implications for inflation and economic growth. Market participants are weighing the impact of these unresolved tensions, particularly as trade negotiations remain stuck at lower levels, delaying any meaningful resolution.

Additionally, shifting government spending priorities, particularly in defense and industrial sectors, are influencing investment strategies. Recent policy announcements in Europe suggest a renewed focus on infrastructure and military investment, which could reshape capital flows in the coming months.

What lies ahead?

Given the fluid nature of global financial markets, investors are closely watching key economic data releases, policy decisions, and corporate earnings for further direction. Volatility is expected to persist as markets digest new information and adjust to evolving macroeconomic conditions.

The current environment underscores the importance of strategic portfolio management and a diversified approach to navigating market uncertainty. As economic fundamentals continue to shift, staying informed and adaptable will be essential for making well-informed investment decisions.

EURUSD surpasses 1.09

The Euro has continued to rise over the past few hours, breaking above the 1.09 mark for the first time since November. While the technical indicators on the daily chart show that the market is heavily overbought, suggesting a potential pullback in the coming days, the recent rally supports a bullish outlook that could aim for a target of 1.10. However, it is important to establish stability above 1.09 to facilitate further gains. Conversely, any downside retracement is expected to remain limited above the 1.0660 level for the time being.

Gold rises above $2900

After dipping to a low of $2882 during yesterday’s trading, gold has since recovered nearly 90% of that decline, trading around $2912 at the time of this report. This rebound continues to be driven by recent selloffs in equities, but the key question now is how long this trend will last.

Currently, gold is showing a pattern of lower highs on the daily chart, and the technical indicators do not suggest a strong bullish trend change. This indicates a higher likelihood of another downward move in the coming days. The next support levels to watch are at $2880, followed by $2800.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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