The S&P 500 futures are down 0.3% to 5720
points this week but remain close to the all-time high of 5773 points. The
index may set a new record soon, potentially activating a bullish scenario
toward extreme targets of 6100-6200 points. Technically, the index needs to
break through the 5790-5810 point range to gain further momentum.
Large inflows into the SPDR S&P 500 ETF
Trust (SPY), totaling $17.4 billion last week, are a positive sign.
Historically, such inflows have pushed the index up by as much as 3.6%, which
could take the index above 5900 points. However, caution is advised, as
previous rallies have sometimes been followed by corrections of 5-10%. Given
the uncertainty ahead of the U.S. presidential elections, long positions on the
S&P 500 index itself may be more prudent than investing in individual
stocks.
This week’s key event is the U.S. Nonfarm
Payrolls report on Friday, which could be pivotal for market direction.
Economic data, such as PMI releases and ADP Payrolls, are expected to be
neutral to positive, potentially reinforcing the current upward trend.
Technically, the
S&P 500 index outlook is unchanged. The benchmark hit its primary target at
5700-5800 points within an upside formation. Extreme targets are located at
6100-6200 points. Currently, the index is holding above the resistance at
5690-5710 points. If it could surpass the 5800 level the index may continue to
climb towards the extreme targets at 6100-6200 points.
Brent crude oil prices
fell to the support at $70.00-72.00 per barrel. The Organization of the
Petroleum Exporting countries and its allies (OPEC+) has decided to postpone
production increases by December. Hurricane season has started in the Gulf of
Mexico. Geopolitical tensions in the Middle East are rising. This has provided
some support for prices that was offset by allegedly reported plans of Saudi Arabia
to raise its oil production. Nevertheless, another upside attempt is seen
evolving. The nearest resistance level is at $79.00-81.00 per barrel. But the
reach of this level is unlikely.
Gold has achieved its
mid-term targets of $2,000-2,100 per ounce and extreme target $2,400-2,500.
Investors have pushed through the resistance at $2,590-2,610 per ounce and are
targeting the next resistance at $2750-2770. If no reversal will occur prices
could continue to rise towards $2,850 per ounce, and possibly further up to
$3,200-3,300 per ounce.
The EURUSD is rising
to above 1.11900. The pair is shy to signal a possible upside towards
1.14000-1.15000, and may return to 1.10000-1.11000 trading range. Then the pair
would have higher chances to break through the support at 1.10000 and fall
towards 1.05000-1.07000. Alternatively, the pair may rise to the extreme
targets at 1.14000-1.15000.