S&P 500 rally loses steam while USD/JPY resumes its ascent and silver hits new record
Technical analysis of the S&P 500 as it loses steam while USD/JPY resumes its ascent and the price of silver hits a new all-time high.
Macro update
S&P 500 softens ahead of Fed decision:
US equities were mixed as investors positioned for a potentially hawkish tone from the Federal Reserve (Fed), even with a 25bp cut largely expected.
Labour data complicates the policy picture:
Job Openings and Labor Turnover Survey (JOLTS) openings ticked higher but hiring remained subdued, reinforcing expectations for an imminent cut while fuelling speculation that the Fed may pause thereafter
Banks weigh on the market after JPMorgan warning:
JPMorgan dropped nearly 5% after projecting 2026 expenses of about $105bn, dragging the S&P 500 bank index down 2%.
Chip and media news adds volatility:
Nvidia slipped after reports it will be allowed to ship H200 chips to China with a 25% export fee, amid signs Beijing may restrict access. Warner Bros gained on news of a hostile bid from Paramount.
Treasury yields continue to rise:
The 10-year yield climbed to 4.18% for a fourth straight session, contributing to a more cautious tone in equities.
Central banks take centre stage globally:
Japanese yen weakness dominated Asian trading ahead of next week’s Bank of Japan (BoJ) meeting, while the Topix reached a record high. Markets are bracing for what could be a fractious Fed decision later today.
S&P 500 range trades
Last week's swift rally in the S&P 500 is losing steam with further consolidation likely to be seen.
A slip through Monday's 6,827 low may lead to the 1 December high at 6,800 being revisited.
Resistance sits at last week's 6,895 high.
Short-term outlook: bullish while above the 1 December 6,800 low
Medium-term outlook: bullish while above 6,800, targeting the 7,000 mark
S&P 500 daily candlestick chart
USD/JPY resumes its ascent
USD/JPY's retracement from its November nine-month high at ¥157.89 seems to have ended at last week's ¥154.35 low.
Since then the uptrend has resumed with the ¥157.00 region being back in sight ahead of the ¥157.89 November peak. A rise above this level will likely engage the ¥158.20-to-¥158.55 January highs.
Short-term outlook: bullish while above the 5 December low at ¥154.35
Medium-term outlook: bullish while above the 5 December low at ¥154.35
USD/JPY daily candlestick chart
Silver trades in record highs
The price of spot silver hit yet another record high, this time at $61.62 per troy ounce.
It is thus heading towards a 261.8% Fibonacci extension target at $65.98. It can be measured by taking the distance from the March 2020 low to the February 2021 high, multiplying it by 2.618 and then projecting that number from the September 2022 low.
Minor support may be found between the 1 to 5 December highs at $59.34-to-$58.85.
Short-term outlook: bullish while above the 4 December low at $56.4590
Medium-term outlook: bullish while above the 4 December low at $56.4590
Silver daily candlestick chart
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