Market Sector Scanner: Markets Rebound as Trump Eases Trade Tensions and Traders Watch Japanese Politics
Global markets steadied after a recent sell-off as Trump signaled a desire to avoid a trade war with China. The yen and Nikkei fluctuated amid uncertainty over Japan’s leadership, while gold held near record highs and traders closely followed political developments in Tokyo.
Markets steadied after last week’s sell-off as President Trump eased trade war fears with China, lifting U.S. equities. In Japan, the USD/JPY and Nikkei 225 slipped amid doubts over Sanae Takaichi’s prospects as prime minister after Komeito left the LDP coalition. Gold extended its rally on safe-haven demand, while weak U.K. unemployment data and talk of tax hikes added to economic concerns. Federal Reserve Chair Jerome Powell signaled another rate cut may come later this year, reinforcing expectations of continued monetary easing.
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Key Events Calendar for October 20 – 24
Market Sector Scanner
Forex Market
USD/JPY
Last Week Recap
Uncertainty surrounding whether new LDP leader Sanae Takaichi can become Japan’s next prime minister kept the USD/JPY under pressure for most of the week, reversing part of the recent rally. However, support returned toward the end of the week as the LDP appeared close to securing a new coalition partner, improving prospects for Takaichi’s appointment as prime minister.
Technical Picture
The lower Bollinger Band is providing strong support, and with the 10-day moving average still trending upward, the broader uptrend remains intact. The 150 level held firmly on Friday, signaling a bullish rebound and renewed buying interest.
Outlook This Week
With few major economic releases on the calendar, the focus will turn to Japanese politics to see whether Takaichi can formally become prime minister and whether the USD/JPY uptrend can resume.
GBP/JPY
Last Week Recap
GBP/JPY declined last week as profit-taking selling entered the market following its recent strong rally. Weak employment figures and sluggish growth data from the U.K. also raised concerns about the strength of the British economy, adding further pressure to the pair.
Technical Picture
After failing to break resistance at the upper Bollinger Band, GBP/JPY fell below the 10-day moving average, signaling a temporary break in the uptrend. However, the moving average remains upward-sloping, suggesting that the broader bullish trend could resume if buying returns this week.
Outlook This Week
With the yen likely to weaken again if Sanae Takaichi becomes prime minister, GBP/JPY may find strong support near the 200 level and attempt another move higher in the coming days.
EUR/USD
Last Week Recap
EUR/USD rose slightly last week as easing political tensions in France, where the government survived two no-confidence votes, encouraged some buying. Additional support came from expectations of future U.S. rate cuts following comments by the Federal Reserve Chair, which weighed on the dollar.
Technical Picture
Support held at both the lower Bollinger Band and the 1.1600 level, though the 10-day moving average remains bearish and continues to slope lower, keeping the pair under pressure.
Outlook This Week
With support still holding at 1.1600 but concerns about the European economy persisting, EUR/USD is likely to stay weak this week. Traders should look to sell if the market falls back below the 10-day moving average.
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Equities
U.S. Stock
Last Week Recap
Despite ongoing talk of an AI bubble and the sharp decline the previous week, the Nasdaq steadied last week as stronger-than-expected Q3 earnings data supported sentiment. Easing fears of a renewed U.S.–China trade war also helped improve investor confidence and encouraged selective buying in technology stocks.
Technical Picture
The market held firm at the lower Bollinger Band, and the 10-day moving average has now flattened, indicating a pause in upward momentum. The Nasdaq will likely need fresh positive news to resume its uptrend.
Outlook
With continued concerns about AI company valuations and technical indicators now turning sideways, range trading appears to be the most practical strategy this week, especially with few major economic announcements expected.
Commodities
Gold
Last Week Recap
Record-breaking gains in gold continued last week as investors increased safe-haven holdings amid ongoing global uncertainty. Persistent central bank buying added further momentum, keeping demand strong and surprising many analysts who had expected a pause after such an extended rally.
Technical Picture
Despite the impressive rise, the technical structure remains firmly bullish. The 10-day moving average continues to offer solid support, while the upper Bollinger Band serves as the main resistance level.
Outlook This Week
Gold’s uptrend should remain intact while prices trade above the 10-day moving average, though a quick profit-taking sell-off could happen if the market falls below that level.
While major economic data releases are limited this week, market sentiment will hinge on political developments in the U.S. and Japan, as well as expectations surrounding the Federal Reserve’s next policy move. Investors will also be watching third-quarter earnings from about 150 major U.S. companies, which could provide fresh momentum for equities if results exceed expectations. Meanwhile, gold’s upward trend remains in focus as traders gauge the broader risk environment.
