Wall Street Bulls on Positive U.S.- China Trade Talk

*Wall Street continues to gain as the U.S.-China trade tension is seemingly easing.

*Feds Waller said to support rate cuts and ease tension between the Fed and the White House, which buoyed the dollar.

*Safe haven assets, including gold, Yen and Swiss France, remain solid as the market is filled with uncertainties.

Market Summary

U.S. equities extended their rally overnight, with the Dow Jones reclaiming the 40,000 mark and the Nasdaq jumping on tech sector strength, as Netflix surged 4.5% and Nvidia gained 3.6%. The rebound erased the previous sessions losses, buoyed by signs of progress in U.S.-China trade talks after President Trump reported constructive government meetings on tariff de-escalation.

Adding to the bullish tone, Federal Reserve officials hinted at potential rate cuts, citing concerns that Trump‘s aggressive tariff measures could weigh on job creation and economic growth. The dovish Fed stance—seemingly in alignment with the administration’s pressure—further improved risk sentiment in the equity space.

Despite the markets upbeat mood, uncertainties continue to linger, keeping safe-haven assets resilient. Gold held firm near elevated levels, while safe-haven currencies like the Japanese Yen and Swiss Franc remained supported as investors sought refuge amid geopolitical and policy unpredictability.

Meanwhile, in the crypto space, bullish momentum appears to be stalling following a strong run-up. Bitcoin and other major tokens showed signs of cooling, suggesting a potential technical correction may be on the horizon as enthusiasm fades in tandem with broader market caution.

Current rate hike bets on 7th May Fed interest rate decision:

0 bps (95.2%) VS -25 bps (4.8%)

Source: CME Fedwatch Tool

Market Movements

DOLLAR_INDX, H4

The Dollar Index extended its losses, as markets now broadly expect the Fed to cut rates from 4.5% to 4.25%. Waller downplayed the inflationary impact of tariffs, stating they would likely lead to a one-off price adjustment, not sustained inflation. He noted that weaker demand, falling employment, and reduced household wealth could offset any price pressures. Combined with ongoing geopolitical trade risks, dollar demand remained weak.

The Dollar Index is trading lower following the prior retracement from the resistance level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 36, suggesting the dollar might experience technical correction since RSI rebounded from oversold territory.

Resistance level: 100.15, 102.95

Support level: 97.15, 95.85

XAU/USD, H4

Gold prices continued to rise, buoyed by a weaker dollar and a dovish tone from the Fed. While inflation concerns eased, Fed officials signaled potential rate cuts if trade tensions deepen. However, optimism over renewed US-China trade dialogue capped golds upside, as investors stayed cautious in the absence of concrete progress.

Gold prices are trading higher while currently testing the resistance level. MACD has illustrated diminishing bearish momentum, while RSI is at 53, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline.

Resistance level: 3375.00, 3495.00

Support level: 3275.00, 3200.00

USD/JPY, H4:

The Japanese yen weakened slightly after the Bank of Japan raised concerns about global economic uncertainties. The BoJs cautious stance cast doubt on any near-term rate hikes, though officials stressed that future decisions would depend on more data. While yen demand rose briefly on risk aversion, a softening dollar capped gains in USD/JPY, keeping the pair in a narrow range.

USD/JPY is trading higher while currently near the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 59, suggesting the pair might experience technical correction since the RSI retreated from the resistance level.

Resistance level: 143.95, 147.15

Support level: 140.45, 137.45