The US index hit a new low this year, with Europe and the United States soaring nearly 400 basis points. Can the rise continue?

Yesterday's market review

On Wednesday, the US dollar index recorded three consecutive negatives, setting a new low in the past four months. As of now, the US dollar is quoted at 104.23.

White House: Trump will give cars imported through the US-Mexico-Canada agreement one month tariff exemption, and Trump said the call with Trudeau ended "to some extent" in a friendly way. Canada does not buy it, and senior officials said they will not end Canadian retaliatory tariffs unless the United States avatradescn.completely cancels tariffs on Canadians. According to sources, the United States hopes that India will cancel tariffs on imports of cars, which are considering further tax cuts but are unwilling to reduce them to zero immediately.

Trump said in Congress that reciprocal tariffs will avatradescn.come into effect on April 2; Ukraine is preparing to sign a mineral agreement, and Zelensky is preparing to return to the Russian-Ukrainian negotiating table; the chip bill should be abolished, the shipbuilding office will be established, and the production of key minerals and rare earths in the United States will be greatly expanded; and avatradescn.comprehensive permanent income tax relief will be sought.

The PMI of the ISM service industry in the United States rose to 53.5 instead of falling; the number of small non-farm employment increased by only 77,000 in February, the smallest increase since July 2024, significantly lower than the expected 140,000 and the previous value of 186,000.

Federal Beige Book: Overall economic activity has risen slightly since mid-January. Overall expectations for economic activity in the avatradescn.coming months are slightly optimistic.

French President Macron: Will go to EuropePartners provide French nuclear protection for discussions; Germany urges the EU to relax fiscal rules to increase defense spending; the Czech Republic will increase defense spending.

Germany ushered in a "historic moment" and planned to significantly increase military spending and infrastructure investment "at all costs"; the yield on the 10-year German bond soared by 30 basis points, the largest single-day increase since 1990.

Summary of institutional views

Analyst David Scutt: The "big day" of the United States and Japan is approaching, and the most powerful downward situation will fall...

As the non-agricultural data approaches, it is interesting that the United States and Japan lack upward action. I think the unemployment rate is the most important information. If the number of new people sends a contradictory signal to the unemployment rate, the unemployment rate can surpass the number of people employed. If the two are in the same direction, a strong trend may occur. However, considering recent data and news, market sentiment seems to be on the slant of data. GODEhttps://avatradescn.comSome layoffs and pessimistic signals sent by the Atlanta Fed GDP model have been fully absorbed by the market. This may offset the downside risks arising from the US and Japan due to seasonal factors in March.

At present, the United States and Japan are still in a set downward trend, fluctuating in the range of 148.65-151. If the unemployment rate unexpectedly rises, and the number of new jobs and average hourly wages data unexpectedly fall, this will be the most powerful scenario for the decline of the United States and Japan, which may overwhelm the US and Japan buying below 148.65 and retest the 147.2 level. But if the number of new jobs and average hourly wages data, coupled with the unemployment rate remaining stable or low, it may trigger a counter-trend rebound between the United States and Japan, and the bulls push prices back to 151 and challenge downward trend line resistance.

However, if the signals from non-farm data are mixed, it is expected that there will be a risk of two-way fluctuations in the US-Japan 148.65-151 range before the unemployment rate begins to put pressure on the outlook for the US interest rate. It is worth noting that Powell will make a speech shortly after the non-farm data. This means that if there is any change in the interest rate outlook, it may be avatradescn.communicated through this opportunity.

Analyst James Stanley: The euro is difficult to catch up with high levels. Will Lagarde drive a super-swell correction tonight?

The bleak U.S. data has sparked concerns about the recession, a major change this week. Now economic data is starting to fall and the market is starting to react. There is a growing expectation of a further rate cut by the Federal Reserve this year, which has negatively impacted the dollar. So while the ECB is expected to cut interest rates tonight, this is not surprising.

In the short term, the frequency of the 1.05 mark test continues to increase, highlighting the bullish potential of the euro, until the bulls finally achieved a break on Tuesday. The bulls began to buy frantically, and the 4-hour RSI was seriously overbought. Considering that the US dollar index is testing important long-term support levels, EuropeThe current level of the Yuan will be a difficult position to chase high. For potential support below the euro against the US dollar, you can first focus on the 1.0611 Fibonacci level. Below this, pay attention to the support level of 1.05 conversion.

In the upward trend, the euro against the US dollar may test 1.0683 before reaching 1.0750, and 1.0727 where the 200-day moving average is. These three levels are relatively radical, but the euro is also a strong upward trend at present. The biggest question is how dovish the ECB President Lagarde generally expects tonight’s interest rate cuts.

TSLombard analyst Davide Oneglia: If the ECB deletes the policy "keep restrictive" it may give two signals

The new economic forecasts made by the ECB based on data collected a few weeks ago are likely to show a trajectory of weaker growth and a slight increase in inflation. But policymakers will be more pragmatic, acknowledging that the world has changed since the forecast deadline and now they face unusual uncertainty. Although the cooling of wage and employment trends, the lag effect of fiscal policy, and the escalation of U.S. tariff threats to the EU have left the basic assumption that deposit rates will be below 2%, the ECB will face pressure to slow down the pace of interest rate cuts due to revaluation of economic growth. It is necessary to pay attention to whether the ECB maintains the wording of “staying restrictive” of its policies or to cancel it, if so, it will indicate that policymakers believe they are close to achieving their goals. But even deleting this wording does not necessarily mean a pause, but may herald greater uncertainty and noisy debate ahead of the next policy meeting.

Bank: Thursday is the last "easy" rate cut by the European Central Bank

The ECB is expected to cut interest rates again on Thursday, which is likely to be the last easy decision by the European Central Bank in some time, as the trade war and reorganization of arms will cause the biggest economic policy changes in the continent in decades. Bank of America analysts said in a report: "With the increase in differences, this is the last 'easy' rate cut. We believe that the guidance will not change...but the differences between avatradescn.committee members will become increasingly greater."

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