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The German DAX 40 index (Germany 40 mini on FXOpen) is showing significantly stronger performance than other major global stock indices as of the end of May. For comparison, since the beginning of 2025:

→ The tech-heavy Nasdaq 100 has remained largely flat;

→ The S&P 500 is down by 1%;

→ Japan’s Nikkei 225 has fallen by approximately 4.5%.

Why Is Germany’s Stock Index Climbing?

The rally may be driven by a combination of factors, including:

→ An ambitious fiscal stimulus programme launched by the German government, featuring substantial public investment in defence and infrastructure development.

→ A dovish monetary policy stance from the European Central Bank (ECB) amid slowing inflation. Expectations of further interest rate cuts in 2025 have made equities more attractive than bonds, drawing capital into the stock market.

Technical Analysis of the DAX 40 Chart (Germany 40 mini on FXOpen)

These fundamental drivers have supported the formation of an upward trend channel (marked in blue), with the median line acting as a key area of support.

The DAX stock index experienced a sharp drop on Friday (highlighted by the arrow) after the US President unexpectedly announced 50% tariffs on EU imports, citing slow progress in trade negotiations. By Sunday, however, Trump postponed the tariffs until 9 June following a “constructive conversation” with European Commission President Ursula von der Leyen.

Since then, the price has:

→ Rebounded from the lower boundary of the channel, which is reinforced by support at the 23,350.0 level;

→ Approached the 24,100 level — a strong resistance zone this month.

Given the uncertainty sparked by Trump’s impulsive policy shifts, investors may be shifting capital from US to European markets, further supporting the DAX 40’s position as a leader among global stock indices.

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• EUR/USD moves higher as Trump delays 50% tariffs on EU goods.
• Short-Term bias is positive, but key resistance is nearby at 1.1420.

EUR/USD started the week on a positive note after investors woke up to news that President Trump would delay the implementation of 50% tariffs on EU goods to July 9, from the previously scheduled June 1, to allow more time for negotiations after a call with Commission President Ursula von der Leyen.

This move aligns with the U.S. president's usual negotiation tactics, following the announcement of aggressive reciprocal tariffs a month ago. Nevertheless, EURUSD managed to capitalize on the headlines, advancing toward the lower boundary of the broken bullish channel at 1.1415 ahead of a speech by ECB President Christine Lagarde.

Technically, the short-term bias remains tilted to the bullish side, as the RSI continues to rise above its neutral 50 mark and the MACD is gaining ground above both its red signal line and the zero level. However, with the stochastic oscillator hovering near its overbought mark of 70, some caution may be warranted.

A decisive close higher could allow the pair to re-test April’s barrier around 1.1512. If this level is breached convincingly, the rally could extend towards the constraining trendline zone of 1.1670–1.1720. Further up, bulls may target the 161.8% Fibonacci extension of the previous downleg at 1.1885, ahead of the key psychological level of 1.2000.

In the event of a bearish reversal near 1.1420, the pair could find support between the 20-day simple moving average (SMA) at 1.1270 and the 1.1230 area. The 50-day SMA remains a critical pivot point near 1.1160; a break below this level could trigger a deeper decline toward the 1.1000 round level.

In summary, EUR/USD has more upside potential, pending a sustainable move above 1.1415 to trigger the next bullish wave.

Although financial markets in both the US and the UK are closed for a public holiday today, Donald Trump is keeping traders on their toes. According to a fresh Reuters report, the US President has backed down from his threat to impose 50% tariffs on EU goods from 1 June, following a phone call from European Commission President Ursula von der Leyen, who urged him to allow time to “reach a mutually beneficial deal”.

This development has boosted the euro while weighing on the US dollar.

As today's EUR/USD chart shows, the euro has risen to its highest level against the dollar since early May. But can the upward trend continue?

EUR/USD Technical Analysis

The ascending trend channel (highlighted in blue) confirms that bullish sentiment currently dominates. However, the EUR/USD chart also presents two bearish arguments worth noting:

→ The price has reached the upper boundary of the channel, which may act as resistance.

→ The 1.1400 level could also serve as resistance. Note how aggressively bears resisted upward movement in April: even when it appeared that the level had been clearly broken from below, the price failed to hold above it for long.

Given this, it is reasonable to suggest that EUR/USD bears may once again become active — particularly if the fundamental backdrop supports them.

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Daily Pivots: (S1) 192.19; (P) 192.88; (R1) 193.68; More...

Intraday bias in GBP/JPY remains neutral at this point. While pullback from 196.38 might extend lower, further rally will remain in favor as long as 190.22 support holds. On the upside, above 194.18 resistance will suggest that the pull back has completed and bring stronger rise back to 196.38. However, sustained break of 190.22 will indicate near term reversal.

In the bigger picture, price actions from 208.09 are seen as a correction to rally from 123.94 (2020 low). Strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. However, sustained break of 175.94 will bring deeper fall even still as a correction.

Daily Pivots: (S1) 161.16; (P) 161.96; (R1) 162.82; More...

Intraday bias in EUR/JPY is turned neutral first with current recovery. On the downside, break of 161.06 will resume the fall from 165.19 to 158.27 support next. Nevertheless, on the upside, break of 163.35 resistance will revive near term bullishness, and bring retest of 165.19 instead.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). Strong support should be seen from 38.2% retracement of 114.42 to 175.41 at 152.11 to contain downside. However, sustained break of 152.11 will bring deeper fall even still as a correction.

Daily Pivots: (S1) 0.8378; (P) 0.8398; (R1) 0.8416; More...

Intraday bias in EUR/GBP remains on the downside for the moment. Current fall from 0.8737 should target 0.8314 support first, and then 0.8239 low. On the upside, above 0.8458 resistance should indicate short term bottoming, likely with bullish convergence condition in 4H MACD, and turn bias back to the upside for stronger rebound.

In the bigger picture, current development suggests that price actions from 0.8221 medium term bottom are merely forming a corrective pattern. However, there is no clear momentum to break through 0.8201 key support (2022 low) yet. Hence, range trading is expected between 0.8221/8737 for now.

Daily Pivots: (S1) 1.7447; (P) 1.7530; (R1) 1.7577; More...

Intraday bias in EUR/AUD stays neutral at this point, and more range trading could be seen. On the upside, firm break of 1.7628 resistance will suggest that fall from 1.8554 as completed as a correction, and retain larger bullishness. Intraday bias will be back on the upside for stronger rebound. However, below 1.7245 will resume the fall to 61.8% retracement of 1.5963 to 1.8554 at 1.6953.

In the bigger picture, as long as 1.7062 resistance turned support (2023 high) holds, up trend from 1.4281 (2022 low) should still be in progress. Break of 1.8554 will target 100% projection of 1.4281 to 1.7062 from 1.5963 at 1.8744. However, sustained break of 1.7062 will confirm medium term topping and bring deeper fall back to 1.5963 support.

Daily Pivots: (S1) 0.9290; (P) 0.9335; (R1) 0.9378; More....

Intraday bias in EUR/CHF remains neutral for the moment, and outlook is unchanged. Price actions from 0.9218 are seen as either a corrective move or the third leg of the pattern from 0.9204. On the upside, break of 0.9419 will resume the rise from 0.9218 through 0.9445 resistance. However, firm break of 0.9296 support will bring retest of 0.9218 low.

In the bigger picture, prior rejection by long-term falling channel resistance (now at 0.9548) retains medium term bearishness. That is, down trend from 1.2004 (2018 high) is still in progress. Firm break of 0.9204 (2024 low) will confirm resumption. This will remain the favored case as long as 0.9660 resistance holds.

GBP/USD started a fresh increase above the 1.3520 zone. USD/CAD declined and now is consolidating below the 1.3800 level.

Important Takeaways for GBP/USD and USD/CAD Analysis Today

• The British Pound is eyeing more gains above the 1.3600 resistance.
• There is a key bullish trend line forming with support at 1.3540 on the hourly chart of GBP/USD at FXOpen.
• USD/CAD started a fresh decline after it failed to clear the 1.4000 resistance.
• There is a connecting bearish trend line with resistance at 1.3740 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair formed a base above the 1.3350 level. The British Pound started a steady increase above the 1.3450 resistance zone against the US Dollar, as discussed in the previous analysis.

The pair gained strength above the 1.3500 level. The bulls even pushed the pair above the 1.3550 level and the 50-hour simple moving average. The pair tested the 1.3585 zone and is currently consolidating gains.

GBP/USD is stable above the 23.6% Fib retracement level of the upward move from the 1.3390 swing low to the 1.3586 high. There is also a key bullish trend line forming with support at 1.3540.

It seems like the bulls might aim for more gains. The RSI moved above the 60 level on the GBP/USD chart and the pair is now approaching a major hurdle at 1.3600.

An upside break above the 1.3600 zone could send the pair toward 1.3650. Any more gains might open the doors for a test of 1.3720. If there is a downside correction, immediate support is near the 1.3540 level and the trend line.

The first major support sits near the 50% Fib retracement level of the upward move from the 1.3390 swing low to the 1.3586 high at 1.3485. The next major support is 1.3450. If there is a break below 1.3450, the pair could extend the decline. The next key support is near the 1.3390 level. Any more losses might call for a test of the 1.3345 support.

USD/CAD Technical Analysis

On the hourly chart of USD/CAD at FXOpen, the pair climbed toward the 1.3900 resistance zone before the bears appeared. The US Dollar formed a swing high near 1.3890 and recently declined below the 1.3800 support against the Canadian Dollar.

There was also a close below the 50-hour simple moving average and 1.3750. The bulls are now active near the 1.3700 level, but they might fail to protect more losses. If there is an upside correction, the pair could face resistance near the 1.3740 level.

There is also a connecting bearish trend line with resistance at 1.3740. The trend line is near the 23.6% Fib retracement level of the downward move from the 1.3888 swing high to the 1.3694 low.

If there is a fresh increase, the pair could face resistance near the 1.3790 level. It is close to the 50% Fib retracement level of the downward move from the 1.3888 swing high to the 1.3694 low. The next key resistance on the USD/CAD chart is near the 1.3815 level.

If there is an upside break above 1.3815, the pair could rise toward the 1.3890 resistance. The next major resistance is near the 1.3935 level, above which it could rise steadily toward the 1.4000 resistance zone.

Immediate support is near the 1.3695 level. The first major support is near 1.3660. A close below the 1.3660 level might trigger a strong decline. In the stated case, USD/CAD might test 1.3600. Any more losses may possibly open the doors for a drop toward the 1.3550 support.

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Markets

US President Trump unexpectedly dropped a bomb on Friday by recommending a 50% tariff on EU goods effective immediate June 1st as he believed that the bloc wasn’t negotiating in good faith. Treasury Secretary Bessent added that he hoped it would light a fire under the EU. Apparently it did. A phone call between Commission President von der Leyen and US President Trump resulted in the latter pushing the negotiation deadline back to July 9 (in line with the previous end date of the 90-day pause), but the consequence of a “no-deal” remains the 50% tariff rather than the 20% reciprocal tariff charted in Washington’s Rose Garden on Liberation Day. Von der Leyen said that Europe is ready to advance talks swiftly and decisively with Trump cherishing the very nice call.

Trump’s rant on social media covered an otherwise quite trading session by risk aversion on Friday. European stock markets lost 2% by the closing bell while US benchmarks suffered a setback of up to 1%. German Bunds rallied with yields sliding 6 to 7 bps across the curve as investors reverted to upping ECB rate cut bets. If any, the episode highlights what Lagarde labelled “unpredictable uncertainty”, making it very hard to assess economic and inflationary consequences. US Treasuries initially spiked higher, but failed to stick with gains. Daily US yield changes varied between -1.8 bps and +0.2 bps with the belly of the curve outperforming the wings. The US dollar sold off with the trade-weighted greenback closing at 99.11 from a start at 99.89. A test of the April low (97.92) is in the making. Friday’s reaction function shows that Trump’s bullying tactics trigger “sell America” vibes with investors. EUR/USD’s rise on Friday is testament to that: 1.1362 from 1.1281.

Risk sentiment improves this morning with the July 9 deadline back in place. Stakes are now higher though. German Bund and European equity futures undo most of Friday’s moves. EUR/USD extends its march beyond 1.14. It’s probably too early to draw firm conclusions as the absence of UK (Spring Bank Holiday) and US (Memorial Day) investors squeezes market volumes today. We warn to get over-enthused and stick with a negative bias against the dollar. The EMU eco calendar is empty. ECB president Lagarde speaks on Europe’s role in a Fragmented World and it’s unclear whether she’ll touch on monetary policy during sideline interviews.

News & Views

Moody's raised the outlook on Italy’s Baa3 rating to positive from stable, reflecting the improved fiscal outlook against the backdrop of a better-than-expected fiscal performance in 2024 and the stable domestic political environment. Last year’s budget deficit came in at 3.4% compared to the 3.8% projected. Moody’s expects a further decline to 3% by 2026 as widening primary surpluses offset rising interest payments. The debt ratio should rise through 2027 (138.4% from 135.3% in 2024) before moving to a gradual declining trend from 2028. The positive outlook is also supported by a robust labour market, sound household and corporate balance sheets and a healthy banking sector. Together with further expected improvements in Italy’s external position they support economic resilience and reduce Italy's susceptibility to event risk. Its Baa3-rating takes into account Italy's large, wealthy economy and effective institutions and governance relative to rating peers. Moody’s adds, however, that the high debt burden remains a constraint on its credit profile.

European officials familiar with the matter said they’re increasingly confidence that Bulgaria will soon meet all requirements for adopting the euro. With a history of narrow deficits, a low debt ratio and currency stability, above-target inflation was one of the final sticking points after the Russian invasion triggered a spike in prices. The European Commission together with the ECB is concluding the convergence report. Its release is due for early June. A positive assessment followed by EU leaders’ blessing at the end of June summit may pave the way for Bulgaria’s euro adoption from the beginning of 2026.