S&P 500 sees sixth straight week of gains as EUR/GBP, silver price look bid
Technical analysis of the S&P following its sixth straight week of gains while EUR/GBP and silver look short-term bullish.
Macro update
Oil surge: Brent crude climbed more than 4% to above $105 a barrel after Donald Trump described Iran’s response to a US peace proposal as “totally unacceptable”, reigniting fears of prolonged disruption in the Strait of Hormuz and tighter global supply.
Geopolitical tensions: Investors are closely watching Trump’s visit to China later this week, where talks with President Xi Jinping are expected to cover Iran, Taiwan, artificial intelligence and critical minerals, with markets hoping Beijing could help facilitate a ceasefire.
Dollar strengthens: The dollar advanced against major peers as stronger-than-expected US payrolls data and renewed Middle East tensions reinforced expectations of higher-for-longer Fed rates, while safe-haven demand also supported the currency.
China data mixed: China’s offshore yuan strengthened for an eighth consecutive session ahead of the Trump-Xi meeting, while producer prices hit a 45-month high in April amid rising energy costs and export growth accelerated on AI-related demand.
Japanese equities volatile: Japan’s Nikkei briefly reached a record high before reversing lower as renewed Iran concerns outweighed optimism around earnings and AI-linked investment, with chipmaker Kioxia extending gains after last week’s rally.
Energy market disruption: Saudi Aramco’s chief executive warned that around 1 billion barrels of oil supply had been lost over the past two months, while shipping data showed more tankers leaving the Strait of Hormuz with trackers switched off to avoid potential attacks.
S&P 500 trades in record highs
There seems no stopping the S&P 500 which continues to trade in record highs despite the situation in the Middle East. A rise above last week's 7,401 high, following on from six consecutive weeks of strong gains, would likely engage the 7,500 region which may offer psychological resistance ahead of a 161.8% Fibonacci extension at 7,722.
Minor support may be spotted around the 6 May high at 7,369 and along the March-to-May uptrend line at 7,319.
Short-term outlook: bullish while above the 4 May low at 7,174
Medium-term outlook: bullish while above the 23 April low at 7,047
S&P 500 daily candlestick chart
EUR/GBP looks capped
EUR/GBP's attempt to break higher has been thwarted by today's £0.8674 intraday high, near the 23 March high. Immediate upside pressure should be maintained, though, as long as the £0.8637 late March low underpins.
A rise above the 23 March high at £0.8679 is likely to encounter resistance in the £0.8685-to-£0.8686 band, though.
Good support below £0.8637 lies in the £0.8624-to-£0.8610 region.
Short-term outlook: neutral with a bullish bias 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 bid
The silver price continues its recent ascent, having last week reached a 3-week high at $82.1319, slightly above which sits the April peak at $83.0555. It represents this week's potential upside target. A rise above this level may lead to the 10 March high at $90.0207 being revisited.
Minor support may be found between the 9 March $79.6507 low and the 17 April trough at $77.7780.
Short-term outlook: bullish while above the 4 May $72.2045 low
Medium-term outlook: neutral with a bullish bias while above the 29 April low at $70.8656 but below the 2 March high at $96.4255
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