A press conference yesterday morning led by US Treasury Secretary Bessant and Trade representative Greer outlined a positive conclusion to the first round of trade talks between the US and China. The news grabbing headline was a 90 day reduction in combined US levies on Chinese imports being reduced from 145% to 30% and Chinese duties on US goods dropping from 125% to 10%.
This announcement put a further squeeze on weak short equity positions, and gave fresh impetus to the bulls, helping to fuel a 4% rally in the US 100, taking it above some interesting technical levels (more on this below).
Now, with a framework in place for further talks between the world’s two biggest economies, representatives from the two countries have 90 days to work towards a broader agreement. However, US Treasury secretary Bessant did say that there may be a chance to extend the tariff reduction for a longer period if there is good faith, engagement and constructive dialog to keep moving forward. A slight caveat which outlines the huge amount of negotiation and focus that needs to be maintained from both sides to finalise a more long term agreement.
While traders may still be focused on trade negotiations and potential trade deal updates with allies across the rest of this week, there is also some economic data to focus on. The latest US inflation reading in the form of CPI is due out later today at 1330 BST, where any deviation from market expectations may either add further buying momentum to the recent move higher, or give traders a reason to take profits against some potentially important technical levels.
Technical Update: Breakout From the Late March Highs
With a positive reaction to the US/China trade talks seen in US equities, the US 100 index has posted its highest closing level since February 26th 2025, as price strength has continued to emerge from the capitulation to 16290 on April 7th.
Traders are possibly now viewing the ability of the index to close above 20871, the March 25th session high, as something that may lead to a more sustained period of price strength.
Of course, a break of a previous price high isn’t always a guaranteed signal of price strength, but with the constructive pattern of higher price highs and higher price lows in place since the April 7th low (16290), the question may now be asked, what are the next potential resistance levels to current strength?
Potential Resistance Levels:
Having seen a new recovery price high for the current phase of strength posted on Monday at 20914, traders may now be viewing this level as a possible first resistance, and how this level is defended on a closing basis could be important.
However, following the latest price strength, if closes above this 20914 high were to materialise, traders might then shift their focus to 22226, which is the February 18th all-time high, as the next possible resistance area.
Potential Support Levels:
Of course, much depends on future market sentiment and price trends, and we know price strength can quickly fail, even reverse back to the downside. So, we must be aware of possible support levels that if broken, may see risks to turn towards potential of declines.
A support focus might now be half of the latest price strength seen from last week’s low, which stands at 20252. If this level gives way, a deeper decline might then be on the cards back towards 19627, which is equal to the 38.2% Fibonacci retracement of April to May 2025 strength.
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
This announcement put a further squeeze on weak short equity positions, and gave fresh impetus to the bulls, helping to fuel a 4% rally in the US 100, taking it above some interesting technical levels (more on this below).
Now, with a framework in place for further talks between the world’s two biggest economies, representatives from the two countries have 90 days to work towards a broader agreement. However, US Treasury secretary Bessant did say that there may be a chance to extend the tariff reduction for a longer period if there is good faith, engagement and constructive dialog to keep moving forward. A slight caveat which outlines the huge amount of negotiation and focus that needs to be maintained from both sides to finalise a more long term agreement.
While traders may still be focused on trade negotiations and potential trade deal updates with allies across the rest of this week, there is also some economic data to focus on. The latest US inflation reading in the form of CPI is due out later today at 1330 BST, where any deviation from market expectations may either add further buying momentum to the recent move higher, or give traders a reason to take profits against some potentially important technical levels.
Technical Update: Breakout From the Late March Highs
With a positive reaction to the US/China trade talks seen in US equities, the US 100 index has posted its highest closing level since February 26th 2025, as price strength has continued to emerge from the capitulation to 16290 on April 7th.
Traders are possibly now viewing the ability of the index to close above 20871, the March 25th session high, as something that may lead to a more sustained period of price strength.
Of course, a break of a previous price high isn’t always a guaranteed signal of price strength, but with the constructive pattern of higher price highs and higher price lows in place since the April 7th low (16290), the question may now be asked, what are the next potential resistance levels to current strength?
Potential Resistance Levels:
Having seen a new recovery price high for the current phase of strength posted on Monday at 20914, traders may now be viewing this level as a possible first resistance, and how this level is defended on a closing basis could be important.
However, following the latest price strength, if closes above this 20914 high were to materialise, traders might then shift their focus to 22226, which is the February 18th all-time high, as the next possible resistance area.
Potential Support Levels:
Of course, much depends on future market sentiment and price trends, and we know price strength can quickly fail, even reverse back to the downside. So, we must be aware of possible support levels that if broken, may see risks to turn towards potential of declines.
A support focus might now be half of the latest price strength seen from last week’s low, which stands at 20252. If this level gives way, a deeper decline might then be on the cards back towards 19627, which is equal to the 38.2% Fibonacci retracement of April to May 2025 strength.
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.