The current market sentiment remains positive, with the dollar slightly down. S&P 500 futures have risen by approximately 1%, as technology shares recover from four consecutive weeks of declines.
European indices initially started strong but are now losing momentum, with the DAX up 0.3% and the CAC 40 gaining only 0.2%. Tariffs continue to pose challenges for these markets.
Foreign Exchange Trends
In foreign exchange, the dollar shows a slight decline, with EUR/USD rising 0.2% to 1.0830. GBP/USD has increased by 0.2% to 1.2950, while AUD/USD is up 0.4% to 0.6293.
The upcoming month-end and quarter-end may complicate market dynamics. Despite the uncertainties, technical indicators suggest US stocks may be poised to overcome recent negative trends, aiming to test levels above the 100-hour moving average for the first time this month.
That US equities are climbing again suggests sentiment may be improving after weeks of selling. Markets tend to move in cycles—periods of weakness are often followed by relief buying, especially in major indices. With technology shares regaining ground, the broader market can sustain gains if the trend persists. However, month-end rebalancing could introduce fluctuations in the days ahead, making it necessary to watch how institutions adjust their portfolios.
In Europe, early optimism appears to be fading. While the DAX and CAC 40 opened higher, their struggles to maintain upside suggest underlying hesitations. The persistence of tariff issues has likely weighed on risk appetite, limiting the ability of equities to rally in unison with their US counterparts. If those concerns grow, European bourses may continue to lag.
Currency markets reflect this cautious tone. The dollar’s latest move lower has allowed the euro and pound to recover further, while higher-yielding currencies like the Australian dollar are seeing greater gains. Still, these shifts remain moderate, lacking forceful momentum. If investors reassess risk exposure toward the end of the quarter, further retracements across FX pairs may come into play.
Technical Market Signals
Technical signals point to a possible test of higher resistance levels in US stock markets. Moving above the 100-hour moving average would mark a break from recent weakness, providing an early indication of recovery. Patterns in momentum readings suggest traders should monitor whether follow-through buying sustains past short-term barriers, as hesitation at key price points could invite renewed selling pressure.
Short-term moves aside, adjusting for quarter-end positioning can often lead to unpredictable trading activity. Investors will likely keep a close eye on key levels, particularly those aligning with technical resistance, to gauge whether this rebound holds after initial enthusiasm fades.
