The blue skies above financial markets are again covered with clouds,
not a thunderstorm yet as it was lust week. But if the barometer points to the
thunderstorm again no market would avoid a wild ride.
U.S. 10-year Treasuries yields went up to 1.7% on Monday, which is not
far from last week highs at 1.75%, when crude prices plunged by 9% in a single
day and stock market were on the edge of falling into a spin, while the
Greenback performed swift strengthening.
The debt market may possibly regain investor attention. To confirm that
we should monitor actual macroeconomic developments after strong PMI data in G7
countries fueled positive expectations of earlier economic recovery and stock
markets continuous rally. However, misbalances in financial markets in case of
further interest rates elevation in the debt market may lead to a correction.
The main macroeconomic story this week would be NonFarm Payrolls data
with positive expectations due to be published this Friday. A significant
decrease of initial jobless claims reported last week are in favor of a strong
NonFarm Payrolls report. Nevertheless, Good Friday holiday in European
countries and in the U.S. would likely to mute market response to this data.
The broad market S&P 500 index is looking strong this week, but the
lack of the liquidity in the end of the week may curb its further upside move.
The closes support level for the index is located at 3940 points while the
nearest resistance is at 4040 points. The last one is logical to be achieved
this week, but low liquidity may drag the index within 3940-4000 point area.
It is vital to consider an alternative scenario too in case interest
rates would soar or any political force majeure in the United States. If the
S&P 500 index slides below 3800 points technical picture would immediately
change from bullish to bearish with a potential to dive to 3600 points.
Oil
market is waiting for the OPEC+ meeting scheduled for April 1. Last time OPEC+
has surprised markets by leaving crude production unchanged. So, we should
assume another surprise is possible this time. Technically, Brent crude process
may fluctuate around the resistance level at $64.30 per barrel to make a
decisive move after OPEC+ decision either to $68.30 per barrel or to the
support levels at $62.90 or $61.90.
However,
the financial logic may be less predictive as the new of freeing the Ever Given
vessel in the Suez channel may resume this dilemma even faster. So, an intraday
buy deals might be interesting if Brent crude prices break through $65.70
level, while sell positions should be opened only at $68.30 per barrel.
Gold
prices are not expected to change much ahead of the NonFarm Payrolls report and
is likely to be traded within the range of $1700-1750 per ounce. However, if
10-year Treasuries yields would climb above 1.75% that may pressure prices
below $1700 per ounce by the end of this week.
Foreign
exchange market is attracting more investors by offering promising positions
ahead of NonFarm Payrolls. We may expect elevated volatility already on
Thursday, before the Good Friday.
The technical
picture for the EURUSD hasn’t changed significantly since the last week. The
pair has a support at 1.15300 and a nearest resistance at 1.19400.
Technical
levels for the GBPUSD moved higher with the main sell target at 1.36100 and a
resistance level at 1.39700.
The
USDJPY is testing the path to a possible upside move to 110.50. If the pair
reaches this level, sell positions with a target to 106.50 would be appropriate.