The American stock market continues to climb steadily. The S&P 500 broad market index almost reached the target of 4600-2650 points, and this target could be met on Tuesday. What could be the next move is hard to say as there are no further drivers coming up for the market to follow.
The Federal Reserve (Fed) has cut off liquidity injections and may start to pump liquidity out of the market. The economy is slowing down, inflation is speeding up and squeezing corporate profits. Ukrainian warfare may ease, but this would never be e reason for the U.S. stock market to steady growth since U.S. President Joe Biden is trying to push the new tax bill through that will slash corporate profits even further. So, we have an ideal picture of the inevitable stock market decline. The question is how long could U.S. monetary policymakers delay this drop.
This week U.S. Q4 2021 GDP figures will be released on Wednesday. It is likely to be the last positive figure for a while, and we may have a positive reaction from the stock market. Nevertheless, the S&P 500 index may hit all upside targets soon. Without any significant drivers, it may slow down to the upside. All aggressive trades that were opened at 4370-4370 points should be closed while traders switch to the wait and see mode.
The oil market has not executed any bullish scenarios for around 10 days and Brent crude prices may hit $160-180 per barrel without any pause until the second half of May. Brent prices are struggling to breakthrough $120 per barrel. This may underpin crude’s weakness. This may hardly change after OPEC+ meeting this Thursday considering high crude prices and the commitment of cartel members and its allies to previously agreed deals.
Gold prices are no longer king of the hill at $1950-1960 per troy ounce. Possible de-escalation in Ukraine and rising 10-year Treasuries yields to 2.5% could be the reason. Gold prices are expected to tumble by the second half of April, so it may be wise to hold sell positions open with the target at $1840 per ounce. Prices slid below the important resistance at $1920-1930. Since bullion prices could tumble below $1910 per ounce, the path to $1840 is open.
EURUSD is within the upside pattern with the target at $1.13000-1.14000. But many technical indicators signal a possible reversal to 1.08000. So, there are no univocal positions now. High-risk sell positons opened at 1.10450 could be kept. The nearest support is at 1.08500. The pair tested this support and may get a chance to do it again after U.S. Q4 2021 GDP publication on Wednesday or the release of the Nonfarm Payrolls data on Friday.
GBPUSD has changed its patter to the aggressive downside with the target at 1.28000-1.28500. The nearest resistance level and a possible spot to open sell positions is located at 1.31200-1.31400.