President Trump gave with one hand and is now taking away with the other. 

At the beginning of the year, US stock markets reached fresh record highs on the back of Trump’s tax initiative, but now his trade war and attacks on Amazon are sending investors running scared.

Yesterday China’s tariffs on some US products came into effect, and this rattled investor confidence. Beijing decided to impose levies on approximately $3 billion worth of goods from the US. In the grand scheme of things, China’s response hasn’t been too aggressive, but dealers fear we could be starting a long trade war. The ball is now in Trump’s court, and traders are waiting for the US president to make the next move.

Amazon came under serious pressure last night after Mr Trump kept the spotlight on the stock, and stated the tech giant isn’t paying its fair share of taxes. The online retailer has been one of the best performers in its industry in recent years, and its recent sell-off has weighed on the sector as a whole.

Jeff Bezos, the CEO of Amazon, is also the owner of the Washington Post, which has been critical of the Trump administration. It is possible the pressure Amazon is coming under is due to the politics of its CEO, but while it remains on Mr Trump's radar, it is likely investors will steer clear of the stock.

This morning traders will be keeping an eye out for the manufacturing PMI reports from the eurozone and the UK. The common theme is that economists are expecting a slowdown in the growth rate of the manufacturing sectors of Spain, Italy France and the UK. The German report is tipped to remain unchanged from the initial reading.

The most recent economic updates from the eurozone point to a cooling of growth in the region. The relative strength of the single currency could be hampering growth in the currency area. The European Central Bank will be running its monetary easing policy until at least September, but if the region continues to come off the boil in terms of economic growth, it's possible the loose monetary policy may remain in place.

EUR/USD – has been broadly pushing higher over the past month and resistance may come into play at 1.2476, and a move beyond that might put 1.25000 on the radar. Support might be found at 1.2239 or 1.2154. 

GBP/USD – continues to be in the same upward trend that it has been in over the past year, and should the rally continue, it could target 1.4244. While a pullback may find support in the 1.3900 region.

EUR/GBP – has been losing ground for nearly one month, and while it remains below the 0.8800 mark, the bearish move is likely to continue. Support might come into play at 0.8667. A break above 0.8800 might put 0.8891 (the 200-day moving average) on the radar. 

USD/JPY – has been in a downward trend since November, and if the bearish moves continue it could target 104.63. Rallies may encounter resistance at 108.00 or 109.78.

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