S&P 500 rallies as EUR/GBP stabilises and silver price loses upside momentum 

Macro update

Global equity markets extended their risk-on advance: Optimism surrounding a provisional US-Iran peace framework eased concerns over disruption to shipping through the Strait of Hormuz, helping propel Wall Street to fresh highs while reducing demand for traditional safe-haven assets.

Oil prices fell sharply as geopolitical risk premium unwound: Expectations that Gulf shipping routes could reopen weighed heavily on crude prices, improving the inflation outlook despite ongoing uncertainty over the region's longer-term stability.

The Bank of Japan delivered another rate increase: The central bank raised its policy rate to 1.0%, the highest level since 1995, and reaffirmed plans to continue reducing government bond purchases as it presses ahead with monetary policy normalisation.

Weak Chinese economic data dampened market sentiment: Retail sales recorded their first contraction in more than three years, while subdued fixed-asset investment figures weighed on investor confidence across Hong Kong and wider Asian equity markets.

Focus shifts to this week's central bank meetings: Investors are closely watching the Federal Reserve and the Bank of England, both of which are widely expected to keep interest rates unchanged while offering fresh guidance on the inflation and policy outlook.

Key economic data remain in the spotlight: Germany's ZEW economic sentiment survey and US housing market releases are due today, with markets seeking further clues on the strength of global growth and the future path of monetary policy.

S&P 500 trades in one-week high

The S&P 500's swift recovery from last week's 7,238 low has so far taken it to a one-week high at 7,578, above which lies the early June record high at 7,620.

Above this level a 161.8% Fibonacci extension may be found at 7,722.

A slip through Monday's low at 7,517 would likely lead to the mid-May high at 7,517 being revisited. Another potential support level may be found around the 9 June high at 7,483 and at Friday's 7,456 high.

Short-term outlook: bullish while above the 5 June low at 7,369

Medium-term outlook: bullish while above the 9 June low at 7,238

S&P500 daily candlestick chart

EUR/GBP sideways trades

EUR/GBP remains above its £0.8620-to-£0.8612 support zone which has held since the beginning of the year. While it continues to do so, a rise towards the late May high at £0.8681 seems to be at hand. Further up potentially beckon the 200-day simple moving average (SMA) at £0.8700 and the May peak at £0.8730.

Short-term outlook: neutral while above the 19 March £0.8612 low

Medium-term outlook: neutral while trading between its March £0.8612-to-£0.8789 extremes

EUR/GBP daily candlestick chart

Silver price may close gap

The Silver price is expected to soften slightly towards its 200-day simple moving average (SMA) at $68.5784 and Friday's £0.6836 high. Reaching it would close this week's price gap.

As long as no further decline takes the price of silver to below its 26 March low at $66.7216, a rise above Monday's high at $71.3265 is expected to be seen. If overcome, the late May low at $71.7920 would be eyed.

Short-term outlook: neutral with a bullish bias while above the 11 June low at $61.5050

Medium-term outlook: neutral with a bearish undertone while above the March $61.0065 low

Sliver daily candlestick chart