Following significant volatility in the financial markets during trading on the morning of Wednesday (February 26, 2025), the market trends appeared more stable at the beginning of the European trading session. However, there is potential for more considerable movement during the evening session in the United States (US). This potential rise in volatility is largely due to statements from US President Donald Trump regarding import tariff policies that could exacerbate market fluctuations.
Moreover, the US will release its new home sales data at 10:00 PM WIB. According to Trading Central’s forecast, new home sales are predicted to decrease by -2.6% month-on-month (MoM) for January, following a rise of 3.6% in the previous month.
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GOLD
Gold prices (XAUUSD) have been fluctuating between $2,905.79 and $2,930.11 per troy ounce during the early session in Europe, after plummeting sharply on Tuesday due to profit taking activities.
The overall sentiment for Gold remains positive, supported by concerns over escalating trade wars and signs of economic slowdown. The Conference Board reported a significant drop in consumer sentiment index to 98.3 this month, down from last month’s 104.1. A reading below 100 indicates American consumers are pessimistic about the economic landscape, which might signal a decline in spending. This scenario would undoubtedly affect the US economy’s growth rate.
Hence, if the new home sales data from the US tonight is worse than the forecast, we might see Gold experiencing a favorable reception once again.
OIL
Oil prices (CLS10) continue to feel pressure at the start of the European trading session, hitting a daily low of $68.83 per barrel. The indications of a weakening US economy are adding pressure since they threaten to lower oil demand.
This suggests that if the economic data from the US tonight comes in poorer than expected, there is a good chance that oil prices will continue to drop.
EURUSD
EURUSD is showing volatility within a range of 1.04871 – 1.05249 as the European session begins, even with the German consumer sentiment report released earlier today indicating a downturn.
Consumer sentiment for this month was reported at -24.7, which is worse than the Trading Central forecast of -21 and the previous month’s figure of -22.4. EURUSD is currently trading near a one-month high. Given the sideways movement despite disappointing German data, there is potential for a positive turn for EURUSD if the US new home sales data tonight is released lower than the -2.6% forecast.
GBPUSD
Similar to EURUSD, this currency pair is also trading sideways within the range of 1.26350 – 1.26776 as the European trading session commences.
GBPUSD remains close to a one-month peak. Should the US economic data tonight come in worse than the forecast, there is potential for GBPUSD to gain additional positive sentiment.
USDJPY
USDJPY has rebounded to 149.629 after previously dropping to 148.626. This increase in USDJPY is likely a result of short covering as the current position is near a four-month low reached last Tuesday.
The Yen is still drawing positive sentiment as the Bank of Japan (BoJ) is expected to raise interest rates shortly, considering Japan’s relatively strong economy. Therefore, if the US economic data tonight is again unfavorable, USDJPY could face renewed downward pressure.
Nasdaq
Nasdaq experienced an uptick at the beginning of the European trading session, reaching a daily high of 21,327. After experiencing a drop for five consecutive days, losing over 1,000 index points in total, today’s increase could be deemed a technical correction.
Concerns regarding a sluggish US economy and risks surrounding trade wars continue to cast a negative sentiment. Should the US new home sales data tonight be disappointing, the negative sentiment surrounding Nasdaq could further intensify.
