This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
Risk-on sentiment eased on June 4
The market takes a breath after the rally up. What is next?
Stocks have a pause
S&P 500 passed the 3100 mark, unseen level since March. The reopening of economies and stimulus packages across the world improved the market sentiment. Investors believe that the worst is over. And, according to Bloomberg, we’ll see more support for the stock market.
Moreover, the US ADP private payrolls were much less than analysts expected. The data showed that only 2.76 million lost jobs, when 9 million were anticipated. That’s still a poor data, but it’s a sign that the economy is moving in the right direction. Today traders will wait for the US unemployment claims at 15:30 MT time.
Let’s look at the S&P 500 chart. Yesterday it showed the best 50-day trading stretch. If the price advances further, it may ramp up to the March 3 high at 3250. Support levels are 3000 and 2935.
OPEC+ meeting in doubt
Oil closed at the highest level since March: WTI - $37 and Brent - $40. However, today prices slightly contracted. Most investors are in a wait-and-see mode ahead of the OPEC+ meeting. The question is for how long the oil alliance will cut supply. If they agree to extend cuts till the end of the year, it will definitely push prices up. Look at the Brent oil chart below. The price is exactly under the 100-day moving average. If it breaks through it, it will surge up to $45. Support levels are $36 and $34.
To trade Brent with FBS you need to choose BRN-20N.
Gold dropped under risk-on
XAU/USD couldn’t find any demand in such a risk-on atmosphere. The price fell down to the support level at 1700. The next support is at 1680. Resistance levels are 1730 and 1750. Gold set a really bullish trend. And, it’s unlikely that it will reverse soon. It looks more like a short term contraction. Tomorrow NFP at 15:30 MT time should add some volatility to the market. Be ready!
ECB statement today
The European Central Bank will have a meeting today at 14:45 MT time and then later hold a press conference at 15:30 MT time. Click here to know how to trade EUR after the ECB statement.
Happy Wednesday, traders! We went through the Internet and found the best news for you, take a look!
Yesterday, the release of the US Inflation rate came out lower than the forecasts (0.1% vs. 0.3%). The soft figures pulled the US dollar index down by almost 1%. At the same time, S&P500, EURUSD, and gold strengthened. Today, the Fed will hold a meeting at 21:00 GMT+3. The Federal Reserve is widely expected to raise the interest rate by 50 basis points.
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The RBA and the Bank of Canada will add volatility to the AUD and the CAD, while USD is expected to be boosted by the Non-farm payrolls.