CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
empty
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

01.04.202511:03 Forex Analysis & Reviews: Why tariffs may trigger rally instead of crash?

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Exchange Rates 01.04.2025 analysis

The current panic in the markets may be overblown. If tomorrow's tariffs prove to be less damaging than expected, we could witness a short but sharp rebound, particularly in the S&P 500. However, any long position at this stage would be countertrend and require strict risk management.

As the first quarter draws to a close, the stock market remains under intense pressure. Investors are holding their breath ahead of tomorrow's announcement on reciprocal tariffs, a decision that could set the tone for the start of the second quarter. In such a climate of fear, opportunities for a rebound often emerge. The question is where to find support and when to act.

Current situation: no safe haven for indices

The S&P 500 is currently trading near 5,590 points, while the Nasdaq 100 is hovering around 19,260. Both indices have come under pressure in recent weeks not only due to geopolitical and tariff-related concerns but also because of structural weakening in demand for US equities.

The S&P 500 entered technical correction territory and declined 10% from its mid-February peak. The Nasdaq is showing similar signs of weakness.

CFTC data confirms the trend: net long positions in both indices have been shrinking for several weeks. The market is under pressure not only from tariff concerns but also from fears of a longer-term capital shift toward European assets.

For the S&P 500, the nearest support lies at 5,535, the local low from last week and the lower boundary of the current channel. Below that is 5,480, which corresponds to the 38.2% Fibonacci retracement of the rally since October.

Resistance levels are located at 5,650 and 5,705.

Exchange Rates 01.04.2025 analysis

Bullish scenario: if the S&P 500 manages to hold above 5,535 after the tariff announcement and forms a bullish daily candle, this could be the first signal of a rebound toward the 5,650–5,705 range.

Bearish scenario: a drop below 5,480 would pave the way for a move down to the 5,400–5,350 zone, where medium-term support levels from late last year are located.

For the Nasdaq 100, the nearest support stands at 19,120, a trendline extending from early October. The next key level is 18,800, which combines Fibonacci support with an area of interest for institutional investors.

Resistance could be found at 19,500 and 19,800.

Entry points: for short-term traders looking to play a bounce, the market's reaction to 19,120 will be critical. If the level holds and a reversal pattern forms, this could present an opportunity for a short-term long position targeting 19,500.

A break below 18,800 would open the door to a full-fledged bearish trend, with targets in the 18,000–18,200 range.

Fundamental perspective: risk or opportunity?

The central question of the week is tomorrow's tariff announcement. It is known that the United States will introduce aggressive measures, but the scope and scale of the tariffs remain unclear. If it turns out that the new tariffs are less severe than feared and if some companies, such as TSMC, receive exemptions, this could become the catalyst for a market reversal as early as Wednesday or Thursday.

This is especially relevant given the current state of capitulation. Defensive sectors are also under pressure, gold is retreating after recent gains, and investor positioning remains heavily reduced.

That said, the long-term trend continues to pose challenges for the market. The potential for sustained capital outflows to Europe, growing protectionist rhetoric, and a lack of international allies could continue to weigh on US indices into the second quarter.

Natalya Andreeva
Analytical expert of InstaForex
© 2007-2025

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.
Widget callback

Turn "Do Not Track" off

 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of Instant Trading EU Ltd including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.