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S&P 500, silver rallies take a breather while USD/JPY range trades
Technical analysis of the S&P 500, silver rallies as they take a breather while USD/JPY continues to range trade.
Macro update
Global equities take a breather:
After a strong start to 2026, markets paused with United States (US) stocks mixed, as the S&P 500 fell 0.34% while the Nasdaq 100 edged up 0.16%, and Asian equities retreated, led by a 1.2% drop in Japan’s Nikkei 225 and a 0.6% decline in Asia-Pacific shares ex-Japan.
AI theme remains supportive:
Large-cap technology stocks continued to underpin US indices, with gains in NVIDIA, Microsoft and Alphabet, while Samsung’s constructive profit outlook helped sustain artifical intelligence (AI)-related sentiment in Asia despite valuation concerns.
Financials and defence drag sentiment:
US banks and private equity names came under pressure following policy and regulatory developments, while defence stocks slipped amid renewed political scrutiny over production levels and capital returns.
Oil steadies with geopolitics in view:
Crude prices stabilised, with Brent crude oil up 0.55% and West Texas Intermediate (WTI) rising 0.54%, as markets reassessed US actions aimed at controlling Venezuelan oil flows, with the impact largely confined to commodities.
Bitcoin pulls back:
The cryptocurrency retreated after an early-year rally, reflecting profit-taking as broader risk assets paused and investors looked ahead to key macro releases.
Focus shifts to US jobs data:
Mixed labour market signals left expectations for two Federal Reserve (Fed) rate cuts this year broadly unchanged, keeping attention firmly on Friday’s non-farm payrolls (NFPs) report.
S&P 500 comes off record high
The S&P 500 advance to record highs made close to the psychological 7000 mark has been accompanied by negative divergence on the daily Relative Strength Index (RSI).
This may point to at least a short-term retracement lower unfolding over the coming days.
Support can be found in the 6903 - 6870 region.
A rise above Wednesday's 6965 record high would put the psychological 7000 marker on the map.
Short-term outlook:
Bullish while above the 2 January 6824 low.
Medium-term outlook:
Bullish while above the 6721 mid-December low.
S&P 500 daily candlestick chart
USD/JPY range trades
USD/JPY's retracement from Monday's ¥157.30 high is taking the cross towards its October to January uptrend line at ¥156.45. Between it and the 5 January low at ¥156.45 it may find interim support.
If not, the 24 December low at ¥155.56 may be reached.
Immediate resistance can be seen between the 9 December high at ¥156.95 and the 31 December peak at ¥156.99. Further resistance sits at the current January peak at ¥157.30.
Short-term outlook:
Range bound between ¥157.30 and ¥155.56.
Medium-term outlook:
Bullish while above the 5 December low at ¥154.35.
USD/JPY daily candlestick chart
Silver comes off its record high
On Wednesday the silver price came close to its December $84.0301 record high by rising to $82.7706 before coming off again.
A slip towards the November-to-January uptrend line at $72.6580 seems to be on the cards. While the next lower $70.5227 - $70.0750 support area holds, the medium-term uptrend remains intact.
Short-term outlook:
Toppish while below the current January peak at $82.7706.
Medium-term outlook:
Bullish while above the 31 December low at $70.0750.
Silver daily candlestick chart
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