All major
events this week ended happily for the American stock market. U.S. President
Joe Biden and Chinese leader Xi Jinping had quite a “peaceful” negotiation,
retail sales in the United States turned positive with 1.7% rise in October
against 0.8% in September without causing any side fears to investors.
Inflation in the United Kingdom, Eurozone and Canada was above expectations,
reaching to several years highs, but the market has barely reacted to this.
The S&P
500 broad market index sustained above the important 4650 points level and was
even strongly above it with a minimum of 4670 points this week. So, it would be
logical to have a rebound to the resistance at 4730-4740 points as a primary scenario
by the middle of next week.
The
alternative scenario may also become a primary one if Lael Brainard is surprisingly
approved by Joe Biden as a new Federal Reserve (Fed) Watchdog. Mrs. Brainard is
widely known as a dovish monetary policy addict economist and now serves as an Administrative
Governor of the Fed. Joe Biden said he would announce the decision at the
beginning of next week. With Mrs. Bainard as a new Fed Chairwoman, the
Christmas rally is likely to be much stronger, opposed to how it is expected to
be with Mr. Powel who’s limit for dovish monetary decisions reached its
ceiling.
The oil
market is struggling as Brent crude prices almost fell below $80 per barrel
after U.S. Administration announced that it is forming a coalition of major oil
consuming countries with Japan and China on board to launch massive
interventions on the crude market. Interventions are likely to begin next week
and may press Brent crude prices below $80 per barrel to $70-75 per barrel.
Gold prices briefly retested
the support level close to $1840 per troy ounce but failed to continue the
climb. That confirms the need to return back to $1840 per ounce again in order
to resume a full-fledged climb to $1920 per ounce. So, such a test at $1840 per
ounce is likely in the coming days. If this level is sustained, gold prices may
resume climbing.
EURUSD has met its
targets at 1.12630. Investors are taking a breather to decide their next move.
If the pair fails to return above 1.13400 then it is likely to retest the
minimum of this week. Alternatively good buy opportunities would be created.
On the contrary,
GBPUSD is on the upside track this week is climbing above 1.34600-1.34700 with
the next target at 1.35500. In case of the retest of the support at
1.34600-1.34700 good buy opportunities would be created.