New trading week has started mixed as stock markets are climbing with
European stock indices gaining around 2% and U.S. stock indices advancing even
higher by more than 2% to 3,900 points.
On the other hand crude prices are going down forming potentially
reverse pattern. The U.S. Dollar is strengthening against other major
currencies.
This controversial picture may point to a false rise of stock indices.
However, this week may bring a stabilization in the stock market as
investors would likely to wait for NonFarm payrolls data this Friday before
opening any investment positions. So, we may expect sideways trading before
this set of data would be released.
This Thursday Federal Reserve Chairman Jerome Powell will attend the
discussion at The Wall Street Journal Jobs Summit. Powell would make another
try to convince markets the Fed would adhere loose monetary policy for a long
time. Albeit he failed this mission last week as Treasuries’ yields soared
after his speech.
Apparently, with existing technical picture Mr. Powell is unlikely to
succeed this time too. Corporate earnings reports would not be of great help
the market as it is almost over. Zoom Video Communication Inc. financial
results would be interesting to follow with the reaction of the market on
Tuesday. Worse than expected results may reverse S&P 500 index down to 3840
and 3765 support levels.
The reverse pattern is forming in the oil market ahead of the OPEC+
meeting this Thursday where crude production may be increased. However, so far
it is hard to say whether this pattern would be completed before the meeting.
But if so, we may get a decline in Brent crude prices to the support levels at
$63.4; $62.2 and further down at $61.20 per barrel. If the pattern would be
broken we may see a brief spike of the price up to $67 per barrel that would be
a good opportunity to seek for a short entry point.
Gold prices
have tumbled to mid-term target of $1650-1700 per troy ounce. It is likely
prices would continue to slide further in the coming days.
FX market this week would become more and more complex nearing the
Non-Farm Payrolls data this Friday. So, intraday trading with close targets
could be a wise strategy to follow. It is better to avoid leaving any open
trades when the data would be released.
The EURUSD may be interesting for a short-term selling from the
resistance at 1.21600 and 1.22700. But traders should monitor the support level
at 1.20250. Once broken the Euro may plunge towards 1.16200 mark.
The British Pound may be interesting to sell at 1.40400 and 1.41600. But
traders should closely monitor the support level at 1.39200. Once it would be
broken the GDPUSD may drop to the 1.35000 level.
The Japanese Yen is trading close to the important resistance level at
106.50. A breakthrough may cause an upward movement to 110.50. However, it
USDJPY fails to break it any sell positions opened close to 106.50 level with a
target at 104.10 would be interesting to consider.