15.01.202611:31 Forex Analysis & Reviews: U.S. Supreme Court Delays Ruling on Tariffs

Meanwhile, as the U.S. dollar continues to strengthen its position against a number of risk assets, benefiting from rather mixed inflation data, the U.S. Supreme Court once again did not issue a decision yesterday on lawsuits challenging the tariffs imposed by President Donald Trump. As a result, the world will have to wait at least until next week to learn the fate of his signature economic policy.

This delay creates uncertainty in global trade and undermines business confidence, as the tariffs continue to put pressure on supply chains and raise prices for consumers. The cases being considered by the Supreme Court challenge the legality of the tariffs imposed by Trump on steel and aluminum imports, as well as on many other goods from several key U.S. trading partners. The plaintiffs argue that the president exceeded his authority under trade law and acted in violation of the Constitution. If the Supreme Court upholds these tariffs, it would legitimize the use of tariffs as a foreign policy tool and could provoke further protectionist measures by other countries.

The delay in issuing a ruling is causing concern among many stakeholders, including manufacturers, retailers, and consumers. Importers and exporters are facing difficulties in planning their operations due to uncertainty over future trade costs. At the same time, consumers are being forced to pay higher prices for goods subject to tariffs.

The Court has not yet announced when it will issue its next decisions, but it may schedule the next hearings for Tuesday or Wednesday of next week, when the justices will reconvene.

As noted above, there have been casualties. Shares of consumer companies, including Lululemon Athletica Inc. and Mattel Inc., fell due to the absence of a court decision, while power tools maker Stanley Black & Decker Inc. erased its earlier gains.

Let me remind you that during the hearings on November 5, the Court expressed doubts that Trump had the right to impose tariffs under the 1977 law that grants the president special powers in emergency situations. A Supreme Court ruling against Trump on the tariff issue would be his largest legal defeat since returning to the White House.

As mentioned above, the absence of a court decision had no impact on the foreign exchange market.

As for the current technical picture of EUR/USD, buyers now need to focus on taking the 1.1650 level. Only this would allow them to target a test of 1.1680. From there, it would be possible to climb to 1.1710, but doing so without support from major players would be quite difficult. The most distant target would be the 1.1740 high. In the event of a decline in the trading instrument, I expect any serious action from major buyers only around the 1.1630 area. If there is no one there, it would be advisable to wait for an update of the 1.1610 low or to open long positions from 1.1591.

As for the current technical picture of GBP/USD, pound buyers need to take the nearest resistance at 1.3440. Only this would allow them to target 1.3460, above which a breakout would be quite difficult. The most distant target would be the 1.3490 level. In the event of a decline, bears will attempt to seize control of 1.3415. If they succeed, a break of this range would deal a serious blow to bullish positions and push GBP/USD toward the 1.3390 low, with the prospect of a move to 1.3370.