Forex Analysis & Reviews: 26.05.2025 - The Market Has Lost Its...

Live Chat

InstaForex Loprais Team - Official participant of the Dakar rally

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex - Official partner of Dragon Racing

26.05.2025 11:41 AM

The Market Has Lost Its Runway

False hope. Some people experience it just before death. The trade truce between the U.S. and China offered such a false hope. Investors briefly believed that everything would be fine. However, another outburst from Donald Trump proved that a recession is possible, and the slogan "Sell America" is more relevant than ever. The threat of 50% tariffs against the European Union became another blow to the S&P 500.

Over time, markets concluded that the imposition of large-scale tariffs and subsequent delays are merely part of the White House's negotiation tactics. But let's face it: tariffs have been imposed, the clock is ticking, and there are only two trade agreements—in place with the UK and China. And no matter how much the American administration promises more deals "tomorrow," nothing has changed. And now we have Trump's threats again.

U.S. Foreign Trade with the European Union

There will be no winners in a trade war with the EU. Export-reliant Germany and the eurozone will find themselves in a dire position. However, the threat of runaway inflation will force the Fed to keep rates elevated, which will eventually lead to a recession.

In such an environment, the overconcentration of assets in the U.S. works against them. If you believe the U.S. economy is heading for trouble, now is the time to diversify into European and Asian securities. Even if you're convinced the U.S. stock market will remain the best in the world, it still makes sense to hedge your risks—including those tied to a weakening dollar. Speculators are relentlessly selling it, citing White House policy uncertainty and growing fears of an economic downturn.

Dynamics of Speculative Positions on the U.S. Dollar

According to Allianz Global Investors, which manages $650 billion in assets, the U.S. can no longer offer the reliable "runway" it did just a few months ago.

The situation is worsened by fiscal policy issues, increasingly linked to the current administration's lack of competence. Bond yields are rising sharply, and the Treasury is powerless to stop it—even though Scott Bessent previously listed lower yields on U.S. debt as one of the top priorities of the White House's economic policy.

Tariff chaos and fiscal incompetence are a poor recipe for economic health. Recession risks haven't gone away, and once investors smell trouble, the broad-based equity sell-off will be unstoppable.

Technically, on the daily S&P 500 chart, the index continues to decline, testing dynamic support zones represented by combinations of moving averages. As long as prices stay below the fair value of 5895, short positions opened from 5910 should be maintained—and selectively increased.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.