- Bond bulls lose grip as U.S. 10-year Treasury futures publish a bearish engulfing candle, signaling a possible high
- EUR/USD rips increased, clearing 1.0600 as greenback weak spot, navy spending, and technical shopping for gas positive aspects
- USD/JPY rebounds sharply, with a bullish pin candle pointing to check of resistance at 151
- S&P 500 futures bounce, however an in depth beneath the 200DMA might open the door to deeper losses
- Tariff fears ease after U.S. Commerce Secretary Howard Lutnick hints at a possible take care of Canada and Mexico.
Abstract
Get set for a danger rebound in Asia—maybe even a danger rip—after U.S. Commerce Secretary Howard Lutnick’s post-market remarks on Tuesday sparked a partial unwind of current tariff considerations.
Simply hours after Washington slapped contemporary 25% tariffs on Canadian and Mexican imports, Lutnick dropped a bombshell on Fox Enterprise, suggesting Donald Trump could also be open to a compromise by assembly each nations midway on tariffs. He stated a deal would in all probability be introduced Wednesday.
Markets reacted sharply, with fairness index futures squeezing increased whereas bond futures slid. Currencies battered by tariff uncertainty prolonged earlier positive aspects, led by which surged 1.3%.
Name it the most recent iteration of the Trump “put” or proof that tariffs stay a negotiating tactic reasonably than a finished deal—both approach, Lutnick’s feedback (assuming Trump doesn’t contradict them) have eased a number of the danger forward of main U.S. knowledge on Wednesday, together with the providers PMI and jobs report, which land simply two days earlier than non-farm payrolls.
Weakening knowledge and fears that tariffs would choke financial exercise had weighed on danger property, however this momentary reprieve could also be sufficient to carry sentiment for now.
Benchmark Bond Futures Sign Turning Level
Supply: TradingView
The above chart tracks futures. Till Tuesday, it had been a wealthy looking floor for lengthy bond bulls. Nonetheless, value and momentum alerts over the previous 24 hours counsel we might have seen a near-term high for bond costs—implying the alternative for yields.
The failure to interrupt above the December 2024 swing highs was adopted by a pointy reversal, delivering a bearish engulfing candle on the each day timeframe. Whereas a cluster of recognized assist ranges sits slightly below, the shut beneath the 200DMA and RSI (14) breaking its uptrend level to a rising danger that the bullish pattern has run its course. Meaning trades premised on decrease U.S. Treasury yields might must be reassessed within the close to time period.
EUR/USD Delivers Highly effective Bullish Break
Supply: TreadingView
got here to fruition in model, with weak spot, elevated European navy spending, and technical shopping for overwhelming sellers parked from 1.05-1.0530. The widespread forex finally pushed by resistance at 1.0600.
That stage might now act as assist, providing a platform for bulls focusing on an extension in the direction of the subsequent layer of resistance at 1.0668, adopted by the 200-day shifting common. Momentum stays with the bulls, with RSI (14) and MACD alerts favouring shopping for dips over promoting rips within the close to time period.
USD/JPY Bulls Battle Again Onerous
Supply: TradingView
was all the time going to be one to look at on a day like yesterday, given the injury an unwind of yen carry trades induced in early August final yr when considerations over the U.S. financial system final spiked.
At one stage, the pair dipped beneath the December swing low of 148.65, sliding to only above 148.00 as danger property traded close to session lows. Nonetheless, the worth motion into the shut was undeniably optimistic for danger, with a bullish pin candle hinting at a possible extension of the rebound in the direction of recognized resistance at 151. The 148.65 stage stays a key draw back marker.
Momentum indicators proceed to skew reasonably bullish, reinforcing the inclination to purchase dips in the event that they happen.
S&P 500 Futures: 200DMA Saves the Day
Supply: TradingView
face a make-or-break session technically after breaching long-standing uptrend assist earlier than bouncing into the shut following a short dip beneath the important thing 200-day shifting common.
Excluding Lutnick’s feedback, the general value and momentum image stays bearish. The worth not solely closed by the uptrend but in addition beneath 5808, a key horizontal stage courting again to October final yr. RSI (14) and MACD are trending decrease—momentum alerts that usually favour a bearish bias.
Nonetheless, the bounce off the 200DMA might encourage bulls in search of a squeeze after current losses. Other than 5808 and trendline resistance round 5875, different topside ranges of observe embody 6000, the place bullish probes have repeatedly stalled over the previous week, and the 50-day shifting common.
A break and shut beneath the 200DMA can be an undeniably bearish sign, probably opening the door for a take a look at of 5724 and a value hole all the way down to 5670.
