This trading week will be short, as investors in America will leave the floor on Thursday to celebrate Thanksgiving Day. So, all market movements should be fitted within the following three days. This week has started very lively with Nikkei 225 hitting the three-decade highs. Chinese Yuan surged 0.6% to 7.17 against the U.S. Dollar after a rather neutral meeting of China’s central bank. European investors are lagging behind with a neutral start in the stock market and the Euro up by 0.1% against the Dollar.
However, American investors could add volatility today given a short trading week. Volatility may peak on Tuesday on the publication of Federal Reserve’s (Fed) Open Market Committee Minutes from its meeting on November 1. Minutes are expected to be rather neutral considering statement of Fed’s Chair Jerome Powell comments of the meeting. However, some hawkish notes could be added to the document since the yields in the U.S. debt market ae decreasing very rapidly in the last few weeks.
This idea is justified by a technical picture in the market. It doesn’t suggest that the S&P 500 broad market index could climb above 4550 point within the next two weeks unless something extremely unusual to boost stocks up towards 4700-4800 will happen. This signal could come from the Fed if it will declare an end of the interest rates hike cycle, but that is unlikely. Other scenarios suggest the major Wall Street benchmark would climb to 4750-4850 by the end of December.
Negative scenarios for the index could be discussed if the formation for the benchmark will change to a descending one. This could happen after December 1. Thus, it would be better to monitor the situation.
Core durable goods orders for October and Initial Jobless Claims numbers will be released on Wednesday. They could prompt elevated volatility ahead of the long weekend. Some spikes of volatility could be spotted on Friday when American investors will shortly return after their Thanksgiving dinner. PMI data in the United States will finalise the week.
Oil market prices fell dramatically to $77.10 per barrel of Brent crude and bounced back to test the support of $83.00-85.00 per barrel. The nearest support is located at $74.00-76.00 per barrel. Traders are trying not to push hard on prices ahead of the Organisation of Petroleum Exporting Countries and its allies (OPEC+) meeting this Sunday. Crude prices may have a chance to recover within the next 6 weeks.
Gold prices are moving inside the mid-term upside formation with targets at $2000-2100 per troy ounce that have already been met. Prices have not properly tested the support at $1910-1930 per ounce, and bounced towards the resistance at $1990-2010 per ounce. They hit the lower margin of this zone, but they will need more serious escalation in the Middle East for a breakthrough. So far, a war premium is seen deflating with prices slowly moving down towards the $1830 per ounce mark.
The Greenback reached its primary correction targets at 1.08500-1.09500 against the Euro. Any further correction is largely associated with a Christmas stock rally. Alternatively, the Greenback could resume is strengthening towards the parity with the single currency.