The S&P
500 broad market index continues its steady but slow climb towards its target
at 4600-4650 points. Investors are hastily using their chances to increase
positions before the Federal Reserve (Fed) could bombard markets with all its anti-inflation
artillery, including raising interest rates by 50 basis points at once and
unloading its massive $9 trillion balance sheet.
In this
context investors could be mentally crippled by the thought of the risk of high inflation risks forcing ++
the Fed to maximize monetary tightening in May making long positions quite
favorable to open before such decisions could be made. This disposition could
be true unless a force majeure of Chinese military invasion of Taiwan or
cyberattacks of the United States would become realities.
A crude
prices rally may look positive for stocks in this regard together with rising
interest rates and Fed members’ hawkish statements. All this could trigger investors’
greed until a thunderstorm could strike in May. This maybe twisted logic, but
without force majeure it may drive the market up slowly toward previous records.
This is obviously not the reason for new long positions. All those who wanted
to attend this spring rally had this opportunity last week when the S&P 500
index dropped briefly to 4375 points.
However, the
current disposition may move downside expectations for May, and may be also create
a chance to relax for a moment with a glance on a possible geopolitical
tensions.
The oil
market has been witnessing efforts to raise Brent crude prices towards $160-180
per barrel this March. Prices have already tested the important resistance
level at $120 per barrel. However, to continue to the upside prices need to
close above this level this week making a freeway towards the major resistance
level at $132 and further up within coming few weeks.
Gold prices
surged above the important level at $1920-1930 per troy ounce. However, any
rise to $1950-1960 may look like rather a better position to sell towards $1840
with a possible downside to $1750-1760 per ounce in the second half of April.
EURUSD
continues to ascend within the upside pattern towards 1.13000-1.14000. But many
technical indicators signal a high possibility of the downside correction below
1.08000. So, there is no clear direction to open trades. Short positions, which
were not closed, opened at 1.10450 and they could be maintained at this level.
The closes support is at 1.09700 and it has been tested twice without any
success so far. Good chances for a downside may appear next week when support could
move down to 1.08500.
GBPUSD is
also in an upside pattern with a target at 1.34000-1.35000. However, some
indicators signal a possible downside. However, there is some good news as an aggressive
upside pattern is seen to be formed in the case that the Cable closes next
Monday above 1.32500. With such contradictory indications, neither positions
should be opened before the picture becomes less puzzling.