S&P 500 holds above support while EUR/GBP range trades and silver price stabilises

Macro update

Nikkei recovers as chip stocks rebound: Japan's benchmark index gained 0.95%, led by a strong recovery in semiconductor heavyweights Tokyo Electron (+7.3%) and Advantest (+4.1%) after the previous session's sharp decline, although SoftBank slipped 2.9%.

Asian equities strengthen after recent sell-off: MSCI's Asia-Pacific index excluding Japan advanced 3.0%, while South Korea's Kospi jumped 7% as investors reversed some of Monday's losses. Chinese blue-chip stocks also rose 0.9% after stronger-than-expected May trade data.

Iran-Israel ceasefire boosts market sentiment: Risk appetite improved after Israel and Iran suspended attacks following an appeal from President Trump, although both sides cautioned that hostilities could resume and shipping through the Strait of Hormuz remains significantly restricted.

Oil prices retreat as geopolitical fears ease: Brent crude fell 1% to around $92 a barrel and WTI declined 1.5% to $90, giving back much of Monday's 5% rally as investors remained cautious over the durability of the ceasefire.

Wall Street futures edge higher on IPO optimism: S&P 500 futures gained 0.2% and Nasdaq futures rose 0.5%, supported by reports that OpenAI has confidentially filed for a US initial public offering targeting a valuation of up to $1 trillion, adding to optimism around the AI sector.

Markets increase expectations for further rate hikes: Fed funds futures imply a 70% probability of a Federal Reserve rate increase by December ahead of Wednesday's US CPI release, while investors have fully priced in a quarter-point European Central Bank rate hike this week as the US two-year Treasury yield remains near a 15-month high.

S&P 500 so far remains above key support

The S&P 500's slip from its early June record high at 7,620 has so far taken it to 7,369, below which lies key support at 7,339-to-7,334. It consists of the 12-to-19 May lows and, if fallen through, may trigger a deeper correction towards the 7,200-to-7,000 region.

Resistance may now be spotted at the May 7,517 peak.

Short-term outlook: bearish while below the 5 June high at 7,542

Medium-term outlook: bullish while above the 19 May low at 7,334

S&P 500 daily candlestick chart

EUR/GBP range trades

EUR/GBP is still hovering above Friday's £0.8631 low and, while this level holds, may revisit Thursday's £0.8656 high. A rise above this level may lead to the late May high at £0.8681 being reached.

If also exceeded, the 200-day simple moving average (SMA) at £0.8700 and the May peak at £0.8730 may eventually be reached.

Support remains to be found in the £0.8631-to-£0.8612 region.

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 tries to find support

The sharp drop in the Silver price has taken it to an over two-month low at $66.1635 per troy ounce, above which it is trying to hold by clinging to the 200-day simple moving average.

As long as this low underpins on a daily chart closing basis, a gradual recovery towards the late April low at $70.8656 may ensue. If exceeded, the late May low at $71.7920 would be expected to be next in line.

Failure at this week's $66.1635 low may push the mid-March low at $65.4892 to the fore.

Short-term outlook: neutral with a slight bullish bias while above the 8 June low at $66.1635

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

Sliver daily candlestick chart