CURRENCIES
EUR/USD analysis:
- EUR/USD stabilizes above 1.0700 despite political uncertainty.
- Trades below 200 SMA; lower bound at 1.0643, April low at 1.0600.
- Key events: US GDP data and PCE on Friday.
Bond spreads:
- European bond yields in focus ahead of French elections.
- French-German 10-year spread rose to ~80 basis points.
- Potential euro pressure if EU bond spreads widen significantly.
French election polls:
- Marine Le Pen’s National Rally (RN) leads with 33% in the first round, unchanged from the previous survey (Toluna Harris Interactive).
- Left-wing coalition NFP rises to 27%, Macron’s party drops to 20%.
- Projections:
- National Rally: 215-245 seats, allies (Eric Ciotti): 15-30 seats
- NFP: 150-180 seats
- Macron’s party: 85-130 seats
- Republicans: 30-50 seats
- Ifop-Fiducial poll: RN has 36% share, potentially 220-260 seats.
STOCK MARKET
Nvidia’s 13% stock rout: traders look for support levels
- Selloff Details: Nvidia’s three-day, $430 billion selloff has traders turning to technical analysis for support levels.
- Stock Correction: Nvidia has fallen 13% since briefly surpassing Microsoft as the world’s most valuable company, entering a technical correction.
- Premarket Drop: Nvidia shares dropped another 2.4% in premarket trading on Tuesday.
Technical analysis insights:
- Capitulation Signs: Abrupt reversal with signs of capitulation, per Buff Dormeier, chief technical analyst at Kingsview Partners.
- Support Levels:
- Short-term support around $115.
- Next significant level at $100.
- $115 level near key Fibonacci retracement.
- 38.2% retracement from April’s intraday low to recent high is about 2% below Monday’s close.
- Long-term Trend:
- Ari Wald (Oppenheimer): Long-term trend strong, above 50-day moving average ($101) and 100-day moving average ($92).
- Bruce Zaro (Granite Wealth Management): Breaching $100 could signal a need for patience amid market volatility.
Recent performance:
- Stock Surge: Nvidia soared this year due to high demand for AI chips.
- Recent High: Stock rose 43% from May 22 earnings report and stock split announcement to June 18 peak, reaching a market value of $3.34 trillion.
- Current Status: Despite the recent drop, Nvidia is up 139% this year.
Market sentiment and predictions:
- Ari Wald’s View: Major tops involve several rounds of buying and selling; Nvidia’s long-term uptrend remains intact.
- Bruce Zaro’s Caution: A drop below $100 would signal caution, especially with expected market volatility and upcoming elections.
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