A temporary Ceasefire extension maintains a bullish action – North American Mid-Week Market Update

• Mid-Week review where we dive into the major developments for North American and global Markets
• Markets exploded to their all-time highs in recent action but are now facing major geopolitical hurdles in coming days
• While a temporary extension of the Ceasefire helped sentiment, traders are cautious about the next deadline

Log in to our mid-week North American Markets overview, where we examine current themes in North America and provide an overview of index and currency performance.

This week in trading has already been a rollercoaster.

While Stock Markets themselves did not react much, sentiment went back and forth, but traders now seem more and more unfazed by rumors and only react to larger-scale news.

The most important theme, as always since the end of February, is the Middle East conflict, which has now completed its second week of truce.

While the narrative got very passive-aggressive, particularly on a very divided Iranian side, Wall Street kept its optimism and remains completely hypnotized by President Trump's persistent attempt for a deal.

Stock Benchmarks have officially broken all-time highs in 3 consecutive sessions last week.

We are now past the 1-year anniversary of Liberation Day, and the stock markets are up about 50% since then.

This is close to 5 years of growth in a bit more than 365 days, but this has clearly not been an easy path towards that. But Equity Bulls are hungry and seemingly undefeated.

Dips are bought, negative news is followed up by even more positive news, and nothing really ever happens.

With Donald Trump in power, the stock markets are in good hands, and they know they can rely on a few TACO's to remain full.

The most recent one happened yesterday, as bombs and no Ceasefire extension were promised, but the President announced one about 4 hours before the deadline.

Iran just announced that it would send a delegation only if it serves Iran's best interests. From what it seems, internal political turmoil in the Islamic regime still points to contentious looks on peace talks. In any case, a clear answer will have to be seen.

This is a best case scenario for Markets and geopolitics, but both the Dollar and WTI Crude haven't shown as much progress – After falling below $85 last Friday, more realistic traders realized that Hormuz was still in a deadlock and pushed the commodity back higher, now established around $90.

Iran just attacked a third tanker crossing the Strait of Hormuz under US Blockade, and this only shows that both sides are still far from permissive.

While Oil is moving on its own geopolitical dynamics, the US Dollar might have caught its own bid after the upcoming Senate hearing for Fed Chairman Kevin Warsh.

The hearing triggered a notable market pullback as he signaled structural shifts for the Federal Reserve.

Rejecting recent policy complacency, Warsh advocated dropping forward guidance, heavily reducing the balance sheet, and establishing a new inflation framework. While aggressively asserting Fed independence, he notably dodged tough questions from Senator Warren regarding potential disagreements with the President and his biases.

In terms of pure economic data, the only two interesting reports this week have been the Canadian CPI, which came in at a measly 2.4% (but a +0.9% m/m increase), and the Bank of Canada's rate decision, which left rates unchanged.

On the other hand, the US just delivered a banger Retail sales Report (up 1.7% m/m), which only continues the series of rebounding American data.

Let's dive right into our Mid-Week North American Markets recap.

Read More:

• A new era for the Fed? Looking back on Kevin Warsh's US Senate hearing & Market reactions
• Breaking News: UK inflation hits 3-month high as energy & food pressures mount
• Tesla (TSLA) Technical: Bearish reaction from 200-day MA with weak relative strength
• Metals in focus with Ceasefire uncertainty – Silver (XAG/USD) & Gold (XAU/USD) intraday outlook

While Global Stock Indexes have all rebounded, the US clearly dominates the picture and particularly Nasdaq, up a staggering 6.50% to some remarkable all-time highs.

The S&P 500, also heavy influenced by a rebound in tech is doing its own piece of work, up 4.55% since last Monday.

The Dollar continues to consolidate above the 98.00 key level, a zone that points to further uncertainty in the FX Market (compared to quite innocent Stock Markets).

As explored in our previous in-depth Analysis (which I would advise you to check out to learn more), the fact that the USD has stopped correcting is not an optimistic sign for what's to come.

Levels to place on your DXY charts:

Resistance Levels

• 98.50 to 98.70 War Pivot
• 99.40 to 99.50 Resistance
• 100.00 to 100.50 Main resistance and Range highs
• War Highs 100.544 (Double Top)

Support Levels

• 98.30 4H 50-period MA
• 98.00 Major Support
• Support 97.40 to 97.60
• 2025 Lows Major support 96.50 to 97.00

The US Dollar hasn't properly bounced against FX majors and remains close to the bottom of the performance board.

From what it looks, the path to more downside is not guaranteed, but at the same time, a proper war resolution could help sellers to retake control.

In terms of pure technicals though, upside seems more probable – The risk is binary and war headlines will decide the fate of the US Dollar.

The CAD is officially bouncing back, up against most of its FX peers as the dust settles on Crude Oil corrections.

In any case, Canadian data has now been stabilizing and commodity orders are piling up with Middle East turmoil.

USD/CAD is still holding its bear channel but the action is now stalling at the 1.3630 - 1.3660 support as traders await for further FX developments.

• Breaking above 1.36750 hints at a retest of the 4H 50-period MA (1.37260)
• If not, expect the bear channel to hold.

Levels of interest for USD/CAD Trading

Resistance Levels

• 1.3750 Momentum Pivot
• 1.38 mini-Resistance +/- 150 pip
• 1.3850 Resistance
• 1.39 to 1.3925 Support turned resistance

Support Levels

• 1.3630 to 1.3660 Key Support (testing)
• 1.3550 Main 2025 Support
• 1.35 Key Psychological Support

The North American calendar is actually quite full, with many key releases including University of Michigan data, Canadian Retail Sales, and the preparation for next week's Bank of Canada and Fed Rate Decisions.

Safe Trades!

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