Introduction
The world continues to suffer from conflicts across the globe, with the effects rippling through virtually every asset. Join us in this version of the Weekly Market Pulse as we come to grips with a new phase of the business cycle in financial markets.
Global Macro
With next week’s FOMC, this week’s focus was firmly on inflation data, as both CPI and PCE are released.
CPI came right in at the anticipated 2.4% level, only slightly above the Fed’s 2% target. Overall, this is a positive development as tariffs are still yet to create any noticeable increase in inflation.
Despite that, a rate cut at next week’s meeting is almost entirely ruled out. This is due to recent strong economic data, as well as the huge surge in Oil prices, which will almost certainly push up inflation in the future. Next week’s FOMC will thus not revolve around the rates themselves (which are largely predetermined), but rather the forward-looking guidance, as our hopes for a rate cut later this year have strongly diminished.
Equities
It was a rough week across the board, with all indices closing red. The Nasdaq is currently testing a major support area, but lacking any real, sustained bounce from this area.
Nasdaq on the Daily Timeframe
Typically, the more frequently a support level is tested (especially within a compressed window), the weaker it becomes. This marks the fifth time in just two weeks that the Nasdaq has knocked on this particular door, suggesting that the technical floor is thin. While this setup typically leans bearish, we have to take into consideration that we are currently operating in a news-driven regime. In this environment, fundamental headlines often override chart patterns, and traditional technical levels are more prone to being disrespected by sudden volatility.
Despite the cautious technical outlook, the index remains highly sensitive to the broader macro picture. Any cooling of geopolitical tensions that allows oil prices to come down would likely provide the Nasdaq with the relief it needs to bounce from these lows.
Forex
The Dollar saw another week of strength. This flight to safety is a much needed tailwind for the Greenback, which has had a particularly difficult 2025 and 2026.
USD/CHF on the Daily Timeframe
The Swiss Franc is primed for a break & retest of this exceptionally strong Resistance area. 0.786-0.788 consists of multiple key swing lows set during late 2025/early 2026. Price then violently and convincingly dropped to the current swing low at 0.76 before then moving back up to our old lows, as price rejected perfectly to this area.
Right now price is again trying to flip this level. Due to the strength of this area, a daily candle close above the level, would make this area a convincing support level, due to the sheer amount of times it has been respected from both sides.
Commodities
In the land of commodities, there’s just one asset which is catching all of the attention right now. On the weekly open, Oil prices spiked up to nearly $120 a barrel, well above the 2022 highs. Currently price is rotating around the key $88-93 support area (then resistance).
Crude Oil on the 1-hour Timeframe
In a world where the Strait of Hormuz continues to be closed, it’s hard to imagine oil prices accepting below this support area. Instead, it makes sense to look at further upside targets, something for which we have to go back over 10 years in time.
Oil on the Monthly Timeframe
Doing so reveals a key resistance area ranging from $128-133, encompassing yearly lows from 2010-2013.
The implications of this price spike are not to be understated. Because the move has been so vertical, equity markets haven’t fully digested the second-order effects. At $120+ per barrel, corporate margins are squeezed, often forcing businesses to pass costs to consumers. This creates a feedback loop that could well reignite inflation and force central banks back into a hawkish stance later this year.
Conclusion
One-sentence summary of the week:
Oil at 10-year Highs Pushes Stocks Down and the Dollar Up.