Weekly Financial Update

This week’s top market highlights include:

1. Bitcoin is trending upwards, with daily values surpassing $111,743 in New York. This wasn’t anticipated.
2. The GBP/USD currency pair is at $1.3513, a bit below expectations; it was set for Monday, but by Friday, there was a decline of 0.13%.
3. The EUR/USD pair also shows strength, exceeding $1.3558 daily, which again, wasn’t expected.
4. The S&P 500 index has been above 6,142 for over 6,142 days, although this came as a surprise.

The overall decline of 0.13% reflects a minor decrease of 0.03% across each asset.

Last week saw a bit more excitement in the markets, especially in Germany where the DAX reached new heights before slipping slightly at the week’s end.

No updates have emerged regarding customs transactions, and Trump’s tariff negotiations have a deadline looming in less than nine months, specifically by July.

The European Central Bank (ECB) has cut interest rates by 0.25%, as most analysts expected. At the following press conference, it didn’t seem like there were any impactful changes, though the euro and pound briefly surged before dropping back. The price movements for GBP/USD and EUR/USD indicate a bullish trend, but caution is warranted since the US Dollar Index suggests a significant bullish reversal might be on the horizon.

The Bank of Canada maintained its interest rates, which didn’t surprise anyone; the market response was muted.

Key data releases from last week included:

1. The US Non-Farm Payrolls (NFP) slightly exceeded expectations with 139k new jobs, while average hourly wages rose 0.4% per month, a significant indicator for the Federal Reserve.
2. The European Central Bank Policy Conference
3. The US ISM Services PMI, which came in much worse than forecasted, missing by three points.
4. US Jolts Job Openings showed remarkably better results at 739 million.
5. Bank of Canada Policy Conference
6. Swiss CPI (Inflation) aligned with predictions at a 0.1% increase.
7. Australian GDP growth was disappointing, at only 0.2%, compared to an expected 0.4%.

Looking forward, next week is shaping up to provide some critical releases with potential high impact.

Notable economic indicators to watch for this week include:

1. US CPI (Inflation)
2. US PPI
3. Preliminary UOM Consumer Sentiment in the US
4. UK GDP
5. US unemployment claims
6. UK claims updates

The US inflation and PPI figures could significantly affect the stock market, tariff discussions, and the US dollar.

Notably, Monday will be a public holiday in Australia, Germany, Switzerland, and France.

We anticipated that the value of the EUR/USD currency pair would rise in June 2025. Thus far, the forecast is tracking accordingly.

Last week didn’t see any major price shifts in Forex. The Australian dollar was the strongest among major currencies, while the Japanese yen lagged. However, movements remained low overall. Volatility went up slightly, with 15% of key currency pairs experiencing a change of about 1%. Next week might bring even more fluctuations with the crucial US CPI and PPI data on the horizon.

These insights can be acted upon within your Forex Brokerage account or demo.

Last week, the US Dollar Index displayed bullish pinbars, as it bounced off a key support level around 97.67, establishing a bullish double-bottom pattern. These bullish signs conflict with the existing long-term bearish trend and the fact that prices were near multi-year lows recently.

I think the cautious route is to continue trading with the long-term trends favoring the dollar, but only if prices drop below the 97.67 support level or if they fail to overcome a significant resistance level, like 101.39.

The GBP/USD pair reached a new three-year peak above $1.3600 last Thursday, only to retreat during the week. This might signal a weakened breakout or just a lapse in bullish momentum. Additionally, the increase earlier in the week wasn’t too impressive. The bearish pinbar on Thursday, along with Friday’s bearish wrap-up, could mean trouble.

Conversely, the longer-term trend for this currency pair throughout 2025 remains bullish, which is a positive sign. A tight trailing stop, ideally around 1 ATR of long-term value daily, seems effective for this pair.

Bulls might feel a bit anxious, but if the daily value surpasses $1.3616 consistently without hitting a critical upper limit, it could trigger new long trades.

Silver, on the other hand, reached a 13-year high above $36 per ounce last week before slightly declining on Friday, losing only about $0.30 of its gains. The long-term trend, strong momentum, and profit retention remain significant factors to note. Prices closed fairly close to their weekly range, but gold is still showing signs of integration, albeit as a bullish pattern. Silver’s current bullish movement seems quite unique.

Products like Silver Long have historically performed well, particularly when reaching new highs within a six-month timeframe.

The Silver Institute reports a 15% supply shortage anticipated for 2024, which may worsen further in 2025, giving rise to fundamental support for bullish trends.

The S&P 500 Index continued its upward trajectory last week, hitting a new three-month high and surpassing significant psychological levels like 6,000. These indicators signal bullish momentum; however, there are several counterwarnings:

1. The price hasn’t yet reached the mapped resistance level at 6,007.
2. The 50-day moving average is still below the 100-day moving average, indicating that long-term bullish momentum hasn’t been firmly established.

Historically, the US stock market tends to perform well in the long term, especially when prices are above levels from six months prior, making it a potential area for investment. Still, I think it’s wise to remain cautious and wait another week or so before committing.

The forthcoming US CPI and PPI data could be pivotal in determining whether there’s another bullish surge or a potential downturn in the market.

To summarize the best trades this week:

1. A long GBP/USD position if the daily value exceeds $1.3616.
2. A long position in silver against the dollar.
3. A long S&P 500 index stance if the daily measure surpasses 6,142.

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