It seems like the
S&P 500 broad market index futures had a somewhat positive start to the
week, rising by 0.5% to 2155 points. However, this gain
follows a previous week of retracement where the benchmark lost 1.5%. The
current situation remains tense, and corrections are still possible.
The support level for the S&P 500 index has
moved higher to 5130-5150 points, and the price has followed suit. This upward
move has made the current disposition even more fragile. If the index drops
below 5130 points, which was its level last week, it could pave the way for a
decline to the 5030-5050 targets. A drop to these levels would disrupt the
previous upside formation and reverse the index downwards, potentially
targeting 4800-4900 points by mid-May. A further drop to extreme targets at
4400-4500 points could be very painful for investors.
Recent geopolitical tensions between Iran and
Israel have added another layer of uncertainty to the market. However, it seems
that both parties are refraining from further military strikes to avoid a
full-scale war in the Middle East for now.
Investor attention will now turn to
macroeconomic data and the Q1 2024 corporate reporting season in the United
States. There are not many sensitive macroeconomic data releases scheduled for
this week. However, U.S. March retail sales and China's Q1 2024 GDP data are expected
to have some impact on the market sentiment. Additionally, the financial
results of major U.S. banks like Goldman Sachs, Bank of America, and Morgan
Stanley, as well as tech giant Netflix, will be closely watched.
Technically, the S&P 500 index has entered
a potential correction phase, with monitoring of reversal patterns advisable.
The market is showing a craving for correction, although the exact timing
remains uncertain. If the index drops below 5050 points, it could signal a
primary scenario for correction.
Oil prices are retreating slightly to $89.50
per barrel of Brent crude, with geopolitical tensions in the Middle East having
limited impact on trades. The path to $100 per barrel is currently blocked, and
downward pressure is expected to continue in the near term.
Gold prices, having
reached mid-term upside targets at $2000-2100 per troy ounce and extreme
targets at $2400-2500, established a new all-time high close to the resistance
level at $2431 per ounce. A technical period favorable for upside scenarios will
start next week and will last by mid-June. But prices are too high already, and
consolidation could be expected. The nearest support is at $2290-2310.
The EURUSD dropped by
2.0% to 1.06220, and bounced back. The EURUSD is heading to 1.05000. The
nearest downside target is at 1.05500-1.05800. There is a risk of Bank of Japan
interventions to support the Yen that may cancel this scenario.