What Happened
A Reuters poll reveals growing conviction that the European Central Bank will raise its deposit rate by 25 basis points (bps) to 2.25% at its June meeting. That’s a significant shift in confidence — 59 of 70 economists now back the hike, up from just 44 of 85 in April’s survey. Higher rates in Europe tend to strengthen the euro, pressure global equities, and lift gold as a hedge against policy uncertainty.
Key Levels to Watch
ASX 200
Support: 7,720 (recent swing low) and 7,650 (200-day moving average zone)
Resistance: 7,900 (April high) and 8,050 (year-to-date high)
Gold (XAU/USD)
Support: $2,300 (psychological level) and $2,265 (prior breakout zone)
Resistance: $2,380 (recent peak) and $2,430 (all-time high area)
Technical Picture
The ASX 200 is holding above its 50-day moving average but momentum is fading, with RSI sitting near 52 — neutral territory. Gold remains in a strong uptrend above all major moving averages; a rate hike cycle confirmation in Europe historically supports gold as investors hedge currency and inflation risk.
What Traders Are Watching
A confirmed ECB hike in June would likely pressure global bank stocks, including CBA, ANZ, WBC, and NAB, if markets reprice tighter global liquidity. Watch whether the S&P 500 holds above 5,200 — a break below that level could trigger a broader sell-off that drags the ASX lower. Gold bulls are watching for a sustained break above $2,380 to confirm the next leg higher.
Bias
Neutral to Bearish — ASX & Equities / Bullish — Gold
Rising global rates are a headwind for equities but a tailwind for gold. Traders should watch financial sector stocks closely as rate hike expectations build heading into June.