Weekly Summary: Powell or Brainard, That Is the Question

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.