Dow Jones at a Crossroads: Trade Talks and Earnings Could Spark Friday Rally—or Another ’Buy the Rumor, Sell the News’ Fiasco
Wall Street holds its breath as Q1 earnings collide with geopolitical jawboning. The Dow needs a hero—will Big Tech deliver or will traders get another masterclass in ’efficient market’ irony?
Key levels to watch: 38,000 acts as psychological support, but any trade-war headlines could turn algos into panic sellers faster than a Goldman quant can say ’liquidity crunch.’
Bonus cynicism: If past is prologue, whatever happens today will be spun as ’bullish for stocks’ by CNBC by 3:59 PM EST.
Today’s Market Outlook: Inflation Surprises & Durable Goods
In Asia, Japan’s April Tokyo CPI surprised to the upside: CORE CPI (ex fresh food) rose 3.4% y/y vs. 3.2% forecast — the first 3%+ print since July 2023. Broader headline CPI hit 3.5%, accelerating from 2.9% prior. while Inflation excluding food and energy surged 0.7% m/m, more than double the previous month’s pace.
We also have the Retail Sales data from the UK for March and Canada for April, both of which are expected to decline, unlike the surge we saw in the US retail sales data yesterday. Besides that, Swiss National Bank Chairman Schlegel will hold a speech, so look out for some CHF weakness.
Last week, markets were chaotic, with gold soaring $250 in the final three days, the EUR/USD surging 5 cents, and stock markets opening down before turning upward. The moves were big, and the volatility was enormous, so we opened 40 trading signals in total, finishing the week with 25 winning signals and 15 losing ones.
Gold Surges, Then Retreats as Rate Cut Hopes and Diplomacy Shift
Gold staged a dramatic rebound above $3,300 following Fed Chair Powell’s dovish tone and escalating global tensions. The metal hit an all-time high of $3,444/oz, capping off a $500+ rally in just two weeks. However, improved trade sentiment later in the session caused gold to retreat sharply . falling below $3,300, however yesterday buyers returned and sent the XAU price $100 higher.
Euro Reverses Gains After ECB Cut and Dollar Resurgence
EUR/USD initially rallied to 1.1572 after the ECB’s rate cut, seen as a preemptive move ahead of anticipated Fed easing. However, the move faded, and the euro slipped back below 1.13 amid a rebound in dollar demand. Traders are now questioning whether the pair can sustain levels above 1.10 in the NEAR term.
EUR/USD – H4 Chart
Cryptocurrency Update
Bitcoin Bounce Back on Renewed Risk Appetite
Bitcoin (BTC) dropped below $75,000, briefly touching its 50-week moving average, before rebounding to $93,000. The move followed broader tech optimism and Trump’s pro-growth remarks, which reinvigorated crypto market sentiment. BTC broke above the 100 daily SMA (green) and is now consolidating gain below $95K.
BTC/USD – Daily chart
XRP Stabilizes Above $2.20
Ripple (XRP) displayed notable strength early this week, holding firm at critical support levels between $1.80–$2.20. The token climbed back to $2.20 midweek, buoyed by new investor interest and potential for broader altcoin upside and it is trading right at the 50 daily SMA (green).
XRP/USD – Daily Chart
