Pre-Market: Two-Faced ECB Triggers Euro Roller-Coaster as Market Awaits Trump

US stocks are slightly higher today, with the Nasdaq spearheading the advance again, before today’s tariff announcement by Donald Trump (scheduled for 15:30 EST) and after today’s European Central Bank rate decision.

The ECB and Mario Draghi, the king of ambivalent announcements did it again, as the central bank published a hawkish statement, which was muted by a cautious press conference shortly after.

EUR/USD, 4-Hour Chart Analysis

The Euro that has been drifting lower prior to the decision rocketed higher than fell back near the intraday lows post-Draghi, leaving equity markets mostly unscathed, with the cautious rally that started last week still ongoing.

S&P 500 Futures, 4-Hour Chart Analysis

The divergence between the main US indices is still apparent before tomorrow’s employment report, as the Dow and the S&P 500 are still trading around the key 25,000 and 2735 levels respectively that we have been monitoring for weeks now, while the Nasdaq is near its post-crash highs. The Nasdaq got an additional boost today pre-market, from the $67 billion Cigna-Express Scripts deal, that lifted the healthcare segment.

DAX Futures, 4-Hour Chart Analysis

European and Asian stocks are still lagging the leading segment as well, despite the current short-term relative strength, and we are still in the re-test camp regarding the correction lows. That said, those holdings longs based on the easing of the negative divergences could still be glad to see the DAX holding up above 12,000 and the Russell 2000 performing well too.

Forex Markets not Buying the Rally, Commodities Lower

US Treasury yields barely budged after the ECB event, despite the initial rally in European rates, and the Dollar strength is seemingly back, not just against the Euro, with the previously leading AUD/USD and USD/CAD pairs still showing a risk-off bias.

Crude oil is under pressure too, with the WTI contract barely holding up above $60 per barrel, while gold is also being sold today, as the Dollar strength-equity stability combination weighs on the precious metal for now.

Things might turn volatile in late trading as we approach Trump’s announcement, but the real action will likely be tomorrow, when a lot of questions could be answered regarding the real strength h behind the current rally in risk assets.

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Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.