S&P 500 holds above support as EUR/GBP, silver price drop
Technical analysis of the S&P 500 as it holds above support while EUR/GBP and the price of silver drop.
Macro update
Oil eases on Trump comments: Brent crude fell nearly 2% to around $107 a barrel after Donald Trump delayed a planned strike on Iran and said there was a “very good chance” of a nuclear deal, although prices remain more than 50% above pre-war levels.
Equities stay cautious: MSCI’s Asia-Pacific index ex-Japan dropped more than 1%, with South Korea’s Kospi down over 3%, while US futures slipped and European futures traded mixed as investors awaited firmer signs of de-escalation.
Nvidia test looms: Investors are focused on Nvidia’s results on Wednesday as a major test for the AI trade, with expectations elevated after technology stocks drove much of the rebound from March lows.
Japanese tech shares drag: The Nikkei reversed early gains to fall 0.6%, pressured by declines in Advantest, SoftBank, Tokyo Electron and Kioxia, even as stronger-than-expected GDP data supported banks and value stocks.
Bond selloff abates: Treasury and Japanese government bond yields eased after lower oil prices reduced immediate inflation concerns, though markets still see a risk of further central bank tightening if energy prices remain elevated.
Dollar steadies near 159 yen: The dollar regained ground on safe-haven demand, keeping traders alert to possible Japanese intervention, while sterling and the euro weakened, gold eased and bitcoin edged lower to around $76,000 before recovering.
S&P 500 holds above support
Even though the S&P 500 has come off last week's 7,517 record high, it has so far managed to remain above its 12 May low at 7,339. While this remains the case, the short-term uptrend will remain in play and a new record high may be reached.
Above the 7,500 region lies a 161.8% Fibonacci extension at 7,722.
Were the 12 May low at 7,339 to be slipped through, the 1 May high at 7,272 may be revisited.
Short-term outlook: bullish while above the 12 May low at 7,339
Medium-term outlook: bullish while above the 23 April low at 7,047
S&P 500 daily candlestick chart
EUR/GBP under pressure
EUR/GBP's failure at Monday's £0.8730 high and drop all the way to Monday's £0.8666 low probably means that further downside pressure may be seen over the coming days. A slip through £0.8666 may lead to the late April low at £0.8654 being revisited.
Resistance above the £0.8685-to-£0.8686 band comes in along the 200-day simple moving average (SMA) at £0.8700.
Short-term outlook: neutral while above the 1 May £0.8620 low
Medium-term outlook: neutral with a bullish bias while trading between its March £0.8612-to-£0.8789 extremes
EUR/GBP daily candlestick chart
Silver price remains under pressure
The silver price continues its recent descent, having last week topped out at $89.3797.
It is currently slipping towards its Monday low at $73.8634 low, a fall through which may engage the 4 May low at $72.2045 and also the late April trough at $70.8656.
Short-term outlook: bearish while below the 17 April high at $83.0555
Medium-term outlook: neutral with a bearish bias while above the 29 April low at $70.8656 but below the 2 March high at $96.4255
Silver daily candlestick chart
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