The blue skies above financial markets are again covered with clouds, not a thunderstorm yet as it was lust week. But if the barometer points to the thunderstorm again no market would avoid a wild ride.
U.S. 10-year Treasuries yields went up to 1.7% on Monday, which is not far from last week highs at 1.75%, when crude prices plunged by 9% in a single day and stock market were on the edge of falling into a spin, while the Greenback performed swift strengthening.
The debt market may possibly regain investor attention. To confirm that we should monitor actual macroeconomic developments after strong PMI data in G7 countries fueled positive expectations of earlier economic recovery and stock markets continuous rally. However, misbalances in financial markets in case of further interest rates elevation in the debt market may lead to a correction.
The main macroeconomic story this week would be NonFarm Payrolls data with positive expectations due to be published this Friday. A significant decrease of initial jobless claims reported last week are in favor of a strong NonFarm Payrolls report. Nevertheless, Good Friday holiday in European countries and in the U.S. would likely to mute market response to this data.
The broad market S&P 500 index is looking strong this week, but the lack of the liquidity in the end of the week may curb its further upside move. The closes support level for the index is located at 3940 points while the nearest resistance is at 4040 points. The last one is logical to be achieved this week, but low liquidity may drag the index within 3940-4000 point area.
It is vital to consider an alternative scenario too in case interest rates would soar or any political force majeure in the United States. If the S&P 500 index slides below 3800 points technical picture would immediately change from bullish to bearish with a potential to dive to 3600 points.
Oil market is waiting for the OPEC+ meeting scheduled for April 1. Last time OPEC+ has surprised markets by leaving crude production unchanged. So, we should assume another surprise is possible this time. Technically, Brent crude process may fluctuate around the resistance level at $64.30 per barrel to make a decisive move after OPEC+ decision either to $68.30 per barrel or to the support levels at $62.90 or $61.90.
However, the financial logic may be less predictive as the new of freeing the Ever Given vessel in the Suez channel may resume this dilemma even faster. So, an intraday buy deals might be interesting if Brent crude prices break through $65.70 level, while sell positions should be opened only at $68.30 per barrel.
Gold prices are not expected to change much ahead of the NonFarm Payrolls report and is likely to be traded within the range of $1700-1750 per ounce. However, if 10-year Treasuries yields would climb above 1.75% that may pressure prices below $1700 per ounce by the end of this week.
Foreign exchange market is attracting more investors by offering promising positions ahead of NonFarm Payrolls. We may expect elevated volatility already on Thursday, before the Good Friday.
The technical picture for the EURUSD hasn’t changed significantly since the last week. The pair has a support at 1.15300 and a nearest resistance at 1.19400.
Technical levels for the GBPUSD moved higher with the main sell target at 1.36100 and a resistance level at 1.39700.
The USDJPY is testing the path to a possible upside move to 110.50. If the pair reaches this level, sell positions with a target to 106.50 would be appropriate.