English
S&P 500, USD/JPY and silver price try to recover from minor sell-off
Technical analysis of the S&P 500, USD/JPY and silver price as they try to recover from Wednesday’s minor sell-off.
Macro update
Wall Street closes lower:
US equity markets finished in the red, led by a 1% drop in the Nasdaq 100 as investors rotated out of technology stocks, while the S&P 500 fell 0.5% and the Dow Jones slipped 0.1%.
Banks weigh on sentiment:
Financial stocks underperformed, with Wells Fargo tumbling 4.6% after missing fourth quarter (Q4) expectations, and Citi and Bank of America also declining despite earnings beats, amid profit-taking and concerns over a proposed US credit card rate cap.
Rotation across sectors:
Technology and financials lagged, while consumer staples and energy outperformed, reinforcing signs of a shift towards more defensive and cyclical sectors despite generally resilient market internals.
Asia reflects tech weakness:
The sell-off in US technology stocks spilled into Asian markets, pushing Japan’s Nikkei 225 down 0.9% and weighing on Taiwan and Hong Kong, while broader benchmarks such as Japan’s Topix and South Korea’s KOSPI remained close to record highs.
Oil and gold ease:
Crude prices retreated around 3.4% after President Trump played down the likelihood of US military action against Iran, while gold slipped 0.5% from record levels as geopolitical risk premiums receded.
Rates and FX in focus:
Markets continue to price at least two Federal Reserve (Fed) rate cuts before year-end, with policy seen on hold through the first half, while the Japanese yen rebounded from an 18-month low amid renewed intervention warnings from Japanese officials.
S&P 500 found interim support
The S&P 500's slip from this week's 6986 high has taken it to Wednesday's 6886 low from which it has bounced back. While this level underpins on a daily chart closing basis, the psychological 7000 mark will remain in sight.
If support at 6886 were to give way, though, the early January low at 6824 would be back in view.
Short-term outlook:
Bullish while above the 14 January 6886 low
Medium-term outlook:
Bullish while above the 6721 mid-December low
S&P 500 daily candlestick chart
USD/JPY remains below ¥160.00 barrier
USD/JPY retraced from Wednesday's ¥159.45 high but tries to stabilise in the ¥158.50 region. While Wednesday's ¥158.10 low holds, another attempt at reaching the ¥160 region may be made.
Were a slip through ¥158.10 to be witnessed, the November to December highs at ¥157.89 - ¥157.76 should offer at least interim support.
Further down lies the October to January uptrend line at ¥157.17. Between it and the 5 January low at ¥156.45 lies further support.
Short-term outlook:
Neutral while below ¥159.45 but above ¥158.10.
Medium-term outlook:
Bullish while above the 5 December low at ¥154.35.
USD/JPY daily candlestick chart
Silver trades close to record high
The silver price has so far made a record high this week at $93.5141, a rise above which would put the psychological $100 region on the map.
Were a short-term slip to take the precious metal below the 12 January high at $86.2665, the 29 December to 7 January peaks at $84.0301 - $82.7707 may be revisited but would be expected to act as at least interim support.
Short-term outlook:
Bullish while above the 12 January high at $86.2665.
Medium-term outlook:
Bullish while above the 31 December low at $70.0750.
Silver daily candlestick chart
Important to know
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Follow us online
