Risk appetite returned in the overnight US session yesterday, 22 April, sparked by US Treasury Secretary Bessent’s remarks that he sees a de-escalatory path forward regarding the U.S. trade standoff with China in a closed-door investor summit.
All the major US stock indices erased Monday’s losses with the S&P 500, Nasdaq 100, Dow Jones Industrial Average, and Russell 2000 gaining more than 2% yesterday, but remained below their respective 20-day moving averages.
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Yesterday’s revival in risk appetite has also been led by a recovery in the US dollar, especially against the haven currencies, where the USD/CHF and USD/JPY gained by 1.2% and 0.5% respectively.
In today’s Asian opening session, the S&P 500 and Nasdaq 100 E-mini futures extended their intraday gains to 1.6% and 1.8% respectively at this time of writing, reinforced by the news report stating that US President Trump backed down from his earlier threat to remove Fed Chair Powell from office, and mentioned the 145% tariffs on Chinese imports will eventually “come down substantially”
Major Asian benchmark stock indices were jolted up by such “US-China de-escalation” optimism. Japan’s Nikkei 225 staged a rally of 2%, and Hong Kong’s Hang Seng Index surged by 2.4% at this time of writing.
Lack of safe haven demand triggered a sharp bearish reversal in gold (XAU/USD), which fell 1.3% to close yesterday’s US session at $3,381, its worst single-day performance since 7 April. This decline came after gold hit a fresh intraday all-time high of $3,500. Despite the pullback, it remains above its 20-day moving average, which continues to provide support around the $3,170 level.
In its latest updated World Economic Outlook report, the IMF cut economic growth forecasts for most countries due to US trade tariffs and rising trade tensions. The global economic growth forecast for 2025 was slashed to 2.8% from 3.3% projected in January.
Economic data releases
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Fig 1: Key data for today’s Asian mid-session (Source: MarketPulse)
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Chart of the day – Japan 225 cleared above 20-day moving average
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Fig 2: Japan 225 CFD Index minor trend as of 23 Apr 2025 (Source: Trading View)
The price actions of the Japan 225 CFD Index (a proxy of the Nikkei 225 futures) have staged a bullish gap-up above its 20-day moving average with a positive momentum reading in its hourly RSI momentum indicator, which suggests that it may extend its mean reversion corrective rebound in place since its 7 April swing low of 30,343.
Watch the 34,315 key medium-term pivotal support for the next immediate resistances to come in at 35,730 and 36,450 (also the 50-day moving average).
On the flip side, a break below 34,315 invalidates the bullish tone to revive the bears to expose the next intermediate supports at 33,680 and 32,425 in the first step.
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