Equity futures are broadly lower, thanks to Trump's latest tariff threat on Mexican goods. Which could make for a lively US open unless we see a reversal of negative sentiment.
A 5% levy on Mexican goods is due to take effect on the 10th June and could make their way up to 25% by October. Unless of course, Mexico can prevent illegal immigrants crossing over the US boarder. The Mexican Peso plunged 2% within the hour and has continued to weaken though to the European session. Currently amid its worst session since the 29th October, the peso has just broken to new lows and now at its weakest level since early January.
Automakers across Asia were under heavy selling pressure, although the broader markets were dragged down with sentiment with most futures pointing lower throughout the session. As you'd expect, demand for safe havens made JPY and CHF the strongest majors of the session and gold popped to a 2-week high.
The S&P500 E-Mini futures were quick to respond with a near 1% drop early Asia, which doesn't bode with for the S&P500 at market open.
We can see on the daily chart the S&P500's decline has found support around the 200-day eMA and printed a small bullish hammer. Whilst this leaves potential for a rebound from its long-term average, we note a spinning top Doji beneath 2,800 resistance. This means the 2766-2800 zone is a key range as a breakout either direction could mark it next directional move.
-
Near-term bias remains bearish below 2,800
-
A break below 2,766 opens up a run towards the 2,722 low
-
A rebound above 2,800 could enforce a song counter-trend rally from the 200-day eMA
-
The daily structure remains bearish below 2,892
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.
Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.