Stock market today: S&P 500 in weekly loss as trade war fears intensifyy
The Euro is rallying despite the 25bps cut from the European Central Bank from this morning. The ECB Deposit Rate is now at 2% from 2.25%.
The fact that the markets had the cut priced in (well-expected) led to prices being broadly unchanged - markets sawsawed but came right back to their level from the beginning of the session.
As I am writing this, markets are rallying on the "We are well-positioned" comments from Christine Lagarde, speaking right now.
Christine Lagarde is speaking on the ongoing press conference mentioned that Inflation (core inflation) is targeted to be on target towards 2027, therefore, there is still need for some change.
She also mentioned how a strong Euro will hurt exports, as things have already been slowing down going into the meeting.
These two lines are contradicting - my base case is a pause for the next meeting, while waiting for the September ECB Projections.
2% is also the longer-run targeted interest rate for the ECB, but they still mention that they are in a good position and will take things meeting-by-meeting.
Lagarde also expressed. Like every speaker of every central bank, one of the biggest upcoming challenges is the uncertainty of Global Tariffs - one of the reasons why any trade deal news is welcomed by markets.
By the way, we are waiting for more news on these headlines, but Trump and Xi Jinping are currently discussing.
Let’s break down the charts from the Daily to the Hourly timeframe to identify the key levels worth monitoring.
EUR/USD Technical Analysis
EUR/USD Daily
Source: TradingView
The Euro is maintaining its upwards direction from the mid-May bounce. The Daily Exponential MA 20 and EMA 50 are both acting as support.
Momentum is strong, and the RSI is not overbought on the daily yet, giving space for movement.
Expect volatility on the currency though as the day is not over!
The current Daily Candle is strong and overlapping the June 3 Daily bear candle.
Let’s dive further.
EUR/USD 4H Chart
Source: TradingView
Prices have yesterday bounced on the Immediate Pivot at 1.1335 enjoying from a weak USD overall, but today confirms the bullish momentum especially with the current strong candle.
Markets are really appreciating the "well-positioned" comments and we are currently heading to the 1.15 key level and we are breaking through the downward trendline formed from the June 3 highs.
Next up is the EUR/USD yearly highs at 1.15730, though keep in mind that there are a few levels to break before - especially with a 4H overbought RSI (which doesn’t mean reversal but stretched momentum - which may keep going).
Let’s look at potential hurdles before the yearly highs on the 1H chart.
EUR/USD 1H Chart
Source: TradingView
The ECB conference is coming to its end on a very strong 1H Candle - we are approaching the 1.15 Key level fast.
The Prices have used the MA 50 as support on the 1H, and the RSI is currently well-into overbought. This momentum is very tough to fade.
There are only a few hurdles going towards the April 2025 highs:
-Last support before end-April downtrend 1.1520
-Main Resistance Zone 1.1550 to 1.1573
The Euro is currently up over 0.60% on the day.
Safe Trades!