The last trading week of June started with muted optimism as European stock indexes went down, crude prices were falling, a lot of pressure are in the U.S. stock market too.
Nevertheless, on step back might be a good idea ahead of important events in the second half of this week, to give a room for the further growth just before these events would start.
We are expecting an OPEC+ meeting on Thursday, where additional 250,000-500,000 barrels per day crude production increase starting August would be discussed. June NonFarm Payrolls data is expected to be released on Friday, to provide guidelines of a possible tapering of monthly $120 billion stimulus program.
Each of these vents may come as a trigger for increased volatility in the markets while we can see crude prices and S&P 500 broad market index are moving synchronously in one direction. So, if one starts to fall the other would likely to follow. So, investors may consider seat and wait tactics before Friday, following some intraday trading occasion only.
It might be wise to follow such tactics as technical picture suggests mostly sidewind movements in the first half of the week. The S&P 500 index is sitting on the important resistance level at 4280 points, and in most cases, this could mean a decline to the support levels currently located at 4190 points. But we should not discount the “magic hand” of the market that help the major stock index to walk fearless on a tight rope. So, we should not exclude such tightrope walking this week before Friday.
Oil market failed to perform such defile above the important resistance level at $75.20 per barrel of Brent crude, slipping to $74.40 per barrel. However, thus might be such step back before an upside movement to new highs at $77.80 per barrel. We should also consider a major step back in global economic recovery last week, which was the strongest since January 2021 that may usually indicate a possible fall of crude prices. Baker Hughes oil rigs count last week also pointed to a slight decline of crude production last week.
Gold prices stuck below $1800 per troy ounce. They need additional trigger to dive further, and that could be a strong Non-Farm Payrolls report this Friday. Otherwise, gold prices would likely remain at present levels of $1750-1800 per ounce.
Currency market may be slightly more volatile before Friday following incoming economic data. The EURUSD is at the lowest weekly support level at 1.19300, and may bounce from it to 1.21500 or 1.22000, where sell positions would look very attractive. In case of a downward movement to 1.18400-1.18600 the pair would look attractive to buy with a target at 1.19300.
GBPUSD stuck in the trading range 1.38100-1.38800, and would hardly leave it before Friday. If the pair would jump to the resistance level of 1.40600 on Friday, sell positions would be extremely attractive.
The USDJPY is in the right balance around 110.60 just in between the important support at 109.50 and the resistance at 111.95, where the pair would be interesting to consider opening sell positions.