It is remarkable how the stock markets have managed to hold their own rather well considering everything that’s happened, from the escalation of US-China trade war to renewed fears over global growth and not to mention ongoing concerns over Brexit, Italy and valuations. When the market is able to absorb so much negativity, it is usually a sign of strength. So I wouldn’t bet against the S&P hitting another record high in the coming days, even if we think the markets are overvalued at current levels.

In fact, US index futures are pointing to a higher open on Wall Street today, tracking a stronger European session so far. The recovery started yesterday after Bloomberg reported that the US President Donald Trump is planning to delay imposing tariffs on EU auto imports by 6 months. The news lifted German stocks most notably, and the DAX index was again leading the pack this morning, with technical momentum adding to the buying pressure after it formed a bullish outside day within its bullish channel.

Earlier, index futures had slipped in reaction to news the US government wanted to crack down on China’s Huawei operating in the country on national security concerns, further escalating the trade war between the US and China. Beijing has not responded but is clearly against this and denies the company or its products would be used to gather sensitive intelligence – the reason why the US has banned the company. However, the losses were only limited as sentiment was already boosted the day before from news of Trump delaying auto tariffs.

With the S&P 500 trying to breakout from its bull flag pattern after key support in the 2814/15 region held, the path of least resistance continues to be to the upside for US markets. The next bullish targets are as follows:

  • 2878 – an old high hit in January 2018

  • 2941 – the 2018 high

  • 2959 – the all-time high, hit earlier this month

As things stand therefore, more upside appears likely than downside. However, the technical outlook would flip back to bearish in the event of a false breakout from the bull flag pattern. A potential break below the aforementioned support around 2814/15, if seen, would be another bearish development.

Figure 1:


Source: TradingView and

Risk Warning Notice Foreign Exchange and CFD trading are high risk and not suitable for everyone. You should carefully consider your investment objectives, level of experience and risk appetite before making a decision to trade with us. Most importantly, do not invest money you cannot afford to lose. There is considerable exposure to risk in any off-exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of the markets that you are trading. Margin and leverage To open a leveraged CFD or forex trade you will need to deposit money with us as margin. Margin is typically a relatively small proportion of the overall contract value. For example a contract trading on leverage of 100:1 will require margin of just 1% of the contract value. This means that a small price movement in the underlying will result in large movement in the value of your trade – this can work in your favour, or result in substantial losses. Your may lose your initial deposit and be required to deposit additional margin in order to maintain your position. If you fail to meet any margin requirement your position will be liquidated and you will be responsible for any resulting losses.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex Analysis

Editors’ Picks

EUR/USD is pressured under 1.09 amid upbeat German data

EUR/USD is trading below 1.09 as ongoing SIno-American tensions boost the safe-haven US dollar. The German IFO figures for May beat expectations with 79.5 points in May. Coronavirus figures in Europe are declining.


GBP/USD is trading below 1.22 amid negative rates speculation

GBP/USD is trading below 1.22, as investors continue speculating about the BOE setting negative rates. PM Johnson is under pressure after his senior adviser violated the lockdown. The UK is on a bank holiday today.


Forex Today: Dollar in demand amid high Sino-American tensions, thin liquidity expected

The new week has kicked off with dollar strength as the US and China have kept tensions high. Thin liquidity and potential erratic movements may occur as the United States and United Kingdom are on holiday.

Read more

Gold trades with modest losses, holds above $1722 support zone

Gold met with some fresh supply on Monday, albeit lacked any strong follow-through selling and was last seen trading with only modest losses, just below $1730 level.

Gold News

USD/JPY clings to gains near 50-day SMA, bulls await a move beyond 108.00 mark

USD/JPY regains some positive traction on Monday amid a positive mood around equity markets. Concerns about worsening US-China tensions seemed to be the only factor capping further gains. Sustained move beyond 50-day SMA, 108.00 mark needed to confirm any near-term bullish bias.


Forex Majors