Dear Trader,

Market Overview & Key Events

The week of June 8-12 opens with all three instruments under significant directional pressure following one of the most impactful macro weeks of the year. Friday’s May NFP blew past expectations — 172,000 jobs added versus an 85,000 consensus, accompanied by a combined 93,000 upward revision to March and April. The unemployment rate held steady at 4.3%. The print was unambiguously USD-positive and effectively killed any remaining conversation about a 2026 rate cut in the near term, with new Fed Chair Kevin Warsh’s wait-and-see posture now firmly validated by the data.

The market reaction was swift and decisive. EUR/USD collapsed from the 1.1620 area all the way to a current print around 1.1522, shedding over 100 pips in a near-vertical sell-off. Gold cratered from above 4,460 to below 4,270 at the week’s lows, a drop of nearly $200, before staging a fractional recovery to the 4,302 area. The DE40 also crumbled below 24,400, with the index trading near 24,433 as we enter Monday — deep below key structural levels. In all three cases, the EMAs have flipped decisively bearish on both the 1-hour and 4-hour charts, and both EMAs are pointing sharply lower.

The macro calendar this week is headlined by US CPI for May on Wednesday, June 10 at 8:30 AM ET (15:30 Athens time). This is the single biggest event of the week and arguably of the month. After April’s scorching 3.8% y/y print — driven by energy prices surging in the wake of the US-Iran conflict — the market is bracing for a reading potentially approaching or exceeding 4.0% y/y in May as oil-driven pass-through effects compound. EY analysts have specifically flagged the risk of a headline print above 4% for May. A print at or above 4% would be a seismic moment for risk assets: EUR/USD would face violent further downside, gold would come under renewed selling pressure, and the DE40 could break down through critical structural support. A softer-than-feared print (below 3.8%) would be a meaningful relief valve — expect sharp short-covering bounces across the board, though the broader downtrend is unlikely to reverse on one data point alone.

Beyond CPI, the FOMC two-day meeting runs June 16–17, so this week functions as the blackout window for Federal Reserve communications — no Fed speakers to guide or disturb markets. That places the entire macro spotlight squarely on Wednesday’s inflation release and whatever geopolitical noise emanates from the ongoing Middle East situation. The US-Iran conflict and its effect on energy prices remains a chronic overhang: any ceasefire signal or diplomatic breakthrough would reduce the energy-inflation narrative meaningfully, pressuring gold and providing short-term relief to risk assets.

1. Germany 40 (DE40) — Structural Breakdown, Bearish

Technical Landscape

The 4-hour chart captures the full extent of the damage. After a sustained rally that took the DE40 from the April lows near 23,700 all the way to the 25,400 area in late May, the index has now undergone a savage corrective move. The current 4h price near 24,427 sits below a bearish EMA ribbon — the 9 EMA (yellow) has crossed decisively below the 18 EMA (black), and the black 18 EMA is now accelerating lower. What was previously the support base around 24,400–24,500 — the April consolidation shelf — has now been broken and is likely to act as resistance on any rebound attempt. The 4h chart shows a series of large-bodied bearish candles with minimal wicking, suggesting aggressive institutional selling rather than opportunistic retail panic.

The 1-hour chart reinforces the bearish narrative with equal force. Price has been in freefall since Friday’s US session, with both EMAs sloping lower at a steep angle and price trading below both. There has been no meaningful attempt to reclaim either moving average. The only tentative support visible is the area around 24,280–24,320, which corresponds to the pre-rally congestion zone from late April. Below that, there is very limited structural reference until the 24,000–24,100 zone.

Most Likely Bias: Bearish

The bias for the week is firmly bearish. The combination of the NFP-driven EMA breakdown, the collapse through multiple support levels, and the looming threat of a hot CPI print leaves the path of least resistance pointing lower. The short-term corrective rallies — inevitable after such a sharp move — should be treated as selling opportunities rather than reversal signals until price recovers back above the EMA ribbon with conviction on the 4h. A recovery above 24,800–24,900 would be required to meaningfully challenge this view.

Key Levels to Watch

Resistance — 24,500–24,550 is the first significant overhead barrier, coinciding with where the broken April support level now sits. Any attempted rebound is likely to stall or fail here. Above that, 24,750–24,800 represents the 4h EMA ribbon area — a close above this zone would be the first credible signal that momentum is shifting. The 25,000 zone caps the week entirely and is unlikely to be reached given the current configuration.

Support — 24,280–24,320 is the immediate near-term floor. A sustained break below here would open the door to 24,100–24,150, which corresponds to the structural demand zone from April. Below that, the 23,850–23,900 area was the swing low of the earlier correction and represents the most important medium-term structural support. A break of 23,900 would suggest the broader recovery from the April lows is over.

Trade Ideas

Idea 1 — Bearish (Primary Scenario)

Wait for price to retrace into the 24,450–24,550 resistance area. Look for a 1-hour bearish rejection candle — a shooting star or bearish engulfing — with both EMAs sloping lower and price clearly below the ribbon.

• Entry: Sell around 24,480–24,520 on 1h bearish confirmation
• Target 1: 24,280 · Target 2: 24,100 · Extended Target: 23,900 if CPI print is hot
• Stop-Loss: Above 24,700 (above the ribbon)
• Rationale: Selling into resistance within an established EMA downtrend is the highest-probability play in this environment. A CPI print at or above 4% would be the primary accelerant for the extended target. Risk sentiment is fragile; avoid chasing entries below the current price after a gap-down open.

Idea 2 — Bullish Reversal (Alternative Scenario)

A materially softer-than-expected CPI print on Wednesday (below 3.7% y/y) combined with a confirmed bounce from the 24,100–24,280 support area. Entry requires a 4h candle close back above 24,500 with the 9 EMA beginning to curl upward.

• Entry: Buy on the 4h close above 24,500, or a limit entry near 24,120 with a confirming bullish reversal candle
• Target 1: 24,750 · Target 2: 25,000
• Stop-Loss: Below 23,900
• Rationale: The longer-term structural uptrend from April is technically intact as long as the 23,900 area holds. A soft CPI surprise would trigger aggressive short-covering and could see a sharp recovery toward the pre-NFP levels. This is a lower-probability scenario given the current macro backdrop, but the reward justifies the defined risk.

2. EUR/USD — Sharp Breakdown, Bearish Momentum

Technical Landscape

The 4-hour chart tells a stark story of a pair that was in a recovery phase through early June before being completely dismantled by the NFP surprise. The 4h chart shows price had been recovering and consolidating in the 1.1580–1.1640 range through the week ending June 5, with the EMA ribbon in a relatively neutral posture. That changed violently on Friday. The pair has now plunged to the 1.1517 area, with the 9 EMA (yellow) having crossed well below the 18 EMA (black), and both EMAs pointing steeply lower. Price is now trading below both EMAs by a meaningful margin, and the 4h ribbon appears to be in the early stages of a sustained bearish phase.

Zooming into the 1-hour chart, the sell-off that began around midday Friday (Athens time) produced a virtually uninterrupted series of large red candles from 1.1630 all the way to a low near 1.1498. There has been a minor bounce from those lows to the current 1.1521 area, but the 1h EMA ribbon remains in full bear mode — both moving averages sloping lower, with price below them. The structure of lower highs on the 1h makes it difficult to construct a short-term bullish case without a meaningful catalyst.

Most Likely Bias: Bearish

The bias is bearish, though with important caveats around Wednesday’s CPI release. The monetary policy narrative now runs firmly in favour of the USD: a strong labour market, stubbornly elevated inflation (April CPI at 3.8%, May likely higher), and a Fed that is in no position to cut rates in the near term. The ECB, by contrast, has been incrementally dovish in tone relative to expectations. The divergence trade is working against EUR/USD. The pair is approaching a zone of meaningful historical support in the 1.1480–1.1520 area, so some consolidation or short-covering relief is plausible early in the week — but the medium-term picture is tilted lower.

Key Levels to Watch

Resistance — 1.1580–1.1600 is the first meaningful overhead zone, where the broken consolidation base now sits as resistance. A 4h close back above 1.1600 would be a tentative sign of recovery but insufficient to change the bearish bias. Above that, 1.1640–1.1660 marks the pre-NFP equilibrium area and the approximate location of the falling 4h EMA ribbon — this is the critical barrier for the week. The 1.1720–1.1740 area is significant structural resistance and would only come into view on a dramatic fundamental reversal.

Support — 1.1480–1.1500 is the near-term floor, with Friday’s low near 1.1498. A clean break and 4h close below 1.1480 opens the door to 1.1420–1.1440, which is a wider structural support level from earlier in May’s trading range. Below that, the 1.1350 area represents a much more significant zone of medium-term support.

Trade Ideas

Idea 1 — Bearish (Primary Scenario)

Wait for a retracement rally back into the 1.1580–1.1620 resistance zone — likely early in the week — and look for a 1-hour bearish rejection, ideally with price unable to close above the 18 EMA on the 1h chart.

• Entry: Sell around 1.1590–1.1610 on 1h bearish confirmation
• Target 1: 1.1500 · Target 2: 1.1440
• Stop-Loss: Above 1.1660 (above the 4h ribbon)
• Rationale: Selling into resistance within a confirmed EMA downtrend on both timeframes, in a macro environment where USD strength is fundamentally supported by strong jobs data and elevated inflation. This is the cleanest directional trade for the week. CPI above 4% on Wednesday would accelerate the move to Target 2 and beyond.

Idea 2 — Bullish Reversal (Alternative Scenario)

A confirmed hold above 1.1480–1.1500 followed by a 4h close back above 1.1580, triggered by a CPI reading materially below 3.7% y/y — signalling that the energy-driven inflation spike may be peaking. Entry requires a 1h candle close above 1.1580 with both EMAs beginning to turn up.

• Entry: Buy on confirmed 1h close above 1.1580, or limit entry near 1.1490 with bullish reversal candle
• Target 1: 1.1640 · Target 2: 1.1720
• Stop-Loss: Below 1.1440
• Rationale: If the inflation narrative softens, the market will aggressively unwind Friday’s USD positioning. The speed and magnitude of the sell-off means a short-covering rally could be sharp and swift. This remains a lower-probability scenario but is the key counter-trade to monitor on Wednesday afternoon (Athens time).

3. XAU/USD (Gold) — Violent Flush, Complex Outlook

Technical Landscape

Gold’s 4-hour chart is a picture of a pair that has been caught in a brutal macro crossfire. The weekly high near 4,480 has been entirely erased, with the metal selling off aggressively to a low near 4,268 before recovering to the current 4,302 area. The 9 EMA (yellow) has now crossed well below the 18 EMA (black) on the 4h chart, and the ribbon is pointing steeply lower. Looking further left on the 4h chart, this move has now brought price all the way back to levels last seen in late May, effectively undoing three weeks of recovery effort. The 4h ribbon has shifted from a period of bullish potential to full bearish control in the span of two sessions.

The 1-hour chart reveals a near-vertical collapse from the 4,460 area beginning Friday morning (Athens time), with large consecutive red candles. The lows near 4,268–4,280 produced a modest bounce — consistent with some profit-taking and physical demand buyers — but the 1h EMA ribbon remains in full bear configuration. Price is currently attempting to stabilise around 4,302, hovering in no-man’s-land between the recent lows and the first meaningful resistance above.

Most Likely Bias: Bearish with Elevated Uncertainty

The bias is bearish for the near term, but gold’s situation is more complex than the other two instruments. On one hand, the USD-positive macro backdrop — strong jobs, elevated inflation, no Fed cuts in sight — is textbook negative for gold. Risk appetite returning as geopolitical fears recede would also remove safe-haven premium. On the other hand, a CPI print above 4% on Wednesday would create a conflicted dynamic for gold: higher real rates pressure the metal lower, but simultaneously, inflationary fears have historically provided a floor for gold as a store of value. The Iran conflict overhang is also a persistent wildcard — any escalation would be sharply gold-positive regardless of USD strength.

For the week, the path of least resistance is lower unless a fundamental catalyst intervenes. However, the 4,260–4,280 area — which coincides with the late-May structural demand zone — deserves respect as a level where buying interest is likely to materialise.

Key Levels to Watch

Resistance — 4,330–4,360 is the immediate overhead zone. This area contains the 1h EMA ribbon and represents the first barrier for any recovery attempt. A 1h close above 4,360 would signal a short-term relief bounce is underway. Above that, 4,420–4,440 is more significant resistance — the pre-NFP congestion zone — and a close above this level on the 4h would begin to challenge the bearish bias. The 4,480–4,500 zone is the week’s ceiling and would require a dramatic macro reversal to reach.

Support — 4,268–4,280 is the immediate floor, coinciding with Friday’s low and the late-May demand cluster. A clean 4h close below 4,260 opens the door to 4,200–4,220, which is the next visible structural support level. Below that, the 4,150–4,170 area represents the major medium-term support shelf from earlier in May’s base-building phase.

Trade Ideas

Idea 1 — Bearish Continuation (Primary Scenario)

A failed recovery attempt into the 4,330–4,360 resistance zone — look for price to retrace up from the lows into this area and form a 1h bearish rejection (shooting star, bearish engulfing) with both EMAs still sloping lower.

• Entry: Sell around 4,340–4,360 on 1h bearish confirmation
• Target 1: 4,270 · Target 2: 4,200 · Extended: 4,150 if CPI accelerates the move
• Stop-Loss: Above 4,420 (above the 1h ribbon)
• Rationale: Selling into the EMA ribbon on a near-term relief bounce within a freshly established 4h downtrend is the primary play. The gold market is adjusting to a structurally stronger USD environment, and the energy-inflation dynamic that had previously supported gold (stagflation narrative) is being challenged by the labour market resilience.

Idea 2 — Bullish Reversal / Buy the Dip (Alternative Scenario)

A confirmed hold of the 4,260–4,280 support zone on the 4h chart, combined with either a soft CPI print or a geopolitical escalation event in the Middle East. Entry requires a clear 1h bullish reversal candle (hammer, morning star, bullish engulfing) at or near the support zone, followed by a 4h close back above 4,330.

• Entry: Buy near 4,275–4,290 on a confirmed 1h reversal candle, or on the 4h close above 4,330
• Target 1: 4,360 · Target 2: 4,440
• Stop-Loss: Below 4,220
• Rationale: The 4,260–4,280 area is the last meaningful demand zone before deeper structural support. Physical gold demand and central bank buying historically activate near these washout lows. A soft CPI or a geopolitical spike would provide the fundamental fuel for a sharp bounce. The speed of the sell-off also creates conditions for a technical snap-back even without a specific catalyst. However, do not enter long without a confirming candle structure — the trend is bearish and catching a falling knife has a cost.

Risk Considerations & Key Events (Athens Time)

Wednesday, June 10 — US CPI May 2026 (15:30 Athens): The week’s dominant event. April came in at 3.8% y/y and EY analysts flag a potential reading above 4.0% for May as oil and shelter costs continue to feed through. A print at or above 4.0% would be profoundly bearish for EUR/USD and DE40, and mixed-to-bearish for gold. A print below 3.7% y/y would trigger aggressive short-covering and a potential reversal across all three instruments. Reduce position size ahead of the release and wait for the initial volatility to settle before adding on confirmation.

FOMC Blackout Period (all week): The Fed enters its pre-meeting blackout this week ahead of the June 16–17 meeting. No Fed speakers will be providing guidance. This removes a volatility input but also removes any potential dovish reprieve from a committee member walking back hawkish expectations.

Middle East / Iran Conflict (ongoing): Oil prices and safe-haven sentiment remain sensitive to any development involving the US-Iran situation. A ceasefire breakthrough or credible diplomatic signal would compress energy inflation expectations, weigh on gold’s safe-haven premium, and provide a relief rally for risk assets. Conversely, any escalation — particularly involving oil infrastructure — would spike oil, amplify gold’s bid, and add stagflation anxiety to equities.

Oracle Earnings — Tuesday, June 10 (after US close): Oracle is reporting Q4 FY2026 results on Tuesday after-hours. Given Oracle’s outsized position in the AI infrastructure space and the attention it commands as a proxy for enterprise AI spending, a miss could add incremental pressure to European equities including the DE40 when Wednesday opens in Frankfurt.

Summary Outlook

The overarching theme entering this week is USD dominance and risk caution ahead of a high-stakes inflation print. The NFP report has reset the macro narrative decisively in favour of a stronger dollar and prolonged Fed inaction — a combination that is fundamentally hostile to EUR/USD, mildly negative for gold in the near term, and creating persistent headwinds for rate-sensitive equity indices like the DE40.

The cleanest trade this week is selling rallies in EUR/USD below 1.1620. The DE40 short below the 24,500 ribbon offers good structure but requires patience for the retracement entry. Gold is the most complex of the three: technically broken in the short term, but sitting near structural support with a geopolitical wildcard in play.

Wednesday’s CPI number at 15:30 Athens time is the single most important event of the week. Position sizing should reflect that binary risk: trade smaller going into Wednesday, and let the confirmed post-CPI direction determine the second half of the week’s exposure.

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Risk Disclaimer

This Weekly Market Outlook is for educational and informational purposes only. It does not constitute financial advice, investment recommendation, or trading signal. All scenarios and probabilities are estimates based on technical analysis and are subject to change. Trading leveraged instruments carries substantial risk of loss. Always use appropriate position sizing, stop losses, and risk management. Consult a licensed financial advisor before making investment decisions. Past performance is not indicative of future results.

Stay disciplined. Trade the chart, not the headline.– The FX Hermes Team